SharesPost

Just about everyone in the private equity industry recognizes that some fundamental problems jeopardize the prospects for the industry’s participants. Many limited partners need to liquidate substantial portions of their private equity holdings but can’t find an efficient way to do so. Venture capital firms are unable to show attractive ROI’s in large part because there is no liquidity on public exchanges into which even their strongest portfolio companies can exit. Founders who have built successful companies for over a decade find their entire net worth still locked up in a single, illiquid asset. Companies have no way to divest shareholders clamoring for a quick sale despite the companies’ great long term prospects. Regulators, in an effort to create greater transparency, have required funds to mark their assets to “market” but, given there actually is no real market, have left everyone scratching their heads.

The central deficiency giving rise to these dilemmas is the absence of an efficient secondaries market for private equity. If buyers and sellers could find each other efficiently and in volume then LP’s and venture funds could find buyers for their equity, founders could gain some measure of diversification and liquidity, companies could create a shareholder base united around a long term vision for growing the enterprise and regulators (and the rest of us) would finally see what price a willing buyer and willing seller would put on a company’s shares. As Fred Wilson of Union Square Ventures said: “[t]he efforts of a few brave souls to create secondary markets for private company stock is going to lead to more data, more transparency, and more liquidity without having to register and do an IPO or sell your company.”

At SharesPost, we set out to solve these problems while complying with the letter and spirit of the securities laws and protecting the interests of companies, investors and entrepreneurs. It’s a big problem and it requires us to balance some competing interests, but we think we’ve done it. SharesPost is all about making private equity liquid.

Website:

http://www.sharespost.com

Address:

Main St
Santa Monica, California, United States