Q: What is a Bid?
The new “Bids” feature on EquityZen’s marketplace allows investors to submit their desired price and size in a specific deal listed on the platform. Bids are then shown directly to the seller of that deal who can then accept or reject the bid.
Submitting a bid constitutes a serious intention to complete a transaction at the terms of the bid. If matched, investors will be required to follow through with the investment at the stated terms.
Submitting a bid also adds the company to your Watchlist so you will be notified about any future deals in this company. If you simply want to follow the company, you can choose to add it to your Watchlist without submitting a bid.
Q: After my bid is accepted, how long will the process take?
The time to close a deal varies depending on the type of deal. Express Deals typically close within days or up to 1-2 weeks, whereas Direct Deals take 6-8 weeks. As a reminder, Express Deals do not need to go through the ROFR waiver process that Direct (and Standard) Deals do and so can close much faster.
Generally, after a bid is accepted, the buyer has three (3) days to complete their investment paperwork, and then another five (5) days to fund their investment.
Q: Where can I find a deal to place a bid on?
You are able to place a bid on all live Express Deals and Direct Deals. You can find a company with a live Express Deal and/or Direct Deal by going to the Company Search page and filtering Investment Solution for the type of deal you are interested in. Alternatively, you can visit the Investments page, or search for a specific company in the global search bar to see if they have deals that can be bid on.
Once on the Company page, if there are live Express Deals or Direct Deals, you will see the Place Bid widget on the right-hand side panel.
Image displayed is a representation of a fictional investor's view and are not live offerings.
Q: How is placing a bid on a company different from adding that company to my Watchlist?
Placing a bid constitutes a serious intention to complete a transaction at the terms of the bid shown directly to a seller. When the seller accepts the terms of the bid, EquityZen automatically creates a transaction and transaction documents based on the agreed-upon terms.
You should only place a bid if you are ready to move forward with the terms of your bid, as the transaction begins as soon as the seller accepts an offer.
Adding a company to your Watchlist is a softer indication that ensures you are notified about future deals, but will not notify any sellers about your targeted price and size.
Q: If my bid is accepted, will you pull my funds automatically?
No, we will never pull funds automatically upon a seller accepting your bid. When your bid is accepted, we will notify you to complete your investment paperwork, after which we will provide instructions for funding your investment. Though funds will not be automatically called upon, you will be expected to fund your investment within 5-7 days of completing your investment paperwork.
As a reminder, submitting a bid constitutes a serious intention to complete a transaction on the terms of the bid. If matched, investors will be required to follow through with the investment at the stated terms.
Q: What is the minimum amount I can bid?
The minimum bid amount varies depending on the deal itself. For Express Deals, the bid must be for a number of units that exceeds 2% of the underlying fund. For reference, the average Express Deal size is $40,000, but can go as low as $1,000. For more information about the 2% rule, please refer to this article.
Direct Share Acquisitions are subject to the proposed size and price set by the selling shareholder. The offering is typically available for equity blocks larger than $150,000. Learn more about Direct Deals here.
Q: Can I place more than one bid in the same company?
Yes, so long as there are multiple deals available to bid against. Bids are placed against specific deals, not the company itself. Therefore, the number of bids you can place is predicated on the number of deals available in a given company.
You can only place one active bid against a listed deal at a time. Therefore, you could not bid two different prices and sizes for the same listed deal, but you could bid two different prices and sizes against two separate deals.
The expectation is that each deal accepted by a seller will lead to a closed transaction. Please be aware that bids are a firm commitment if you are creating bids in multiple deals.
Q: Can I create a standing order?
No. Each bid must have an expiration date. If the bid is not accepted by this date, we will end the bid and remove it from the seller’s view.
By default, EquityZen sets a 45 day expiry for bids, but you can adjust this expiry date to your liking. After this date, your bid will be removed.
Q: Can I update the bank account associated with my bid?
Yes, should your bid be accepted, you will be able to choose the specific bank account you want to fund your investment from during the investment process. The bank account displayed while creating your bid is your default bank account on file. You can find this by visiting your Profile and clicking on “Bank Account Information.”
Q: As a seller, can I counter the bid I have received?
No, you cannot counter a bid. As a seller with a listed deal, you can review the bid on your Bids page and either accept or reject the offer.
Sellers in an Express Deal always have the option to Modify, which will allow you to choose new terms and re-list on the platform. This is not an explicit counter, but investors will be able to see the new deal at its new price and size. Please review this article for more info on modifying your sell order.
Q: If I accept a bid, how long will it take for me to receive the sale proceeds?
The time to close a deal varies depending on the type of deal. Express Deals typically close within 1-2 weeks or sometimes as quickly as days, whereas Direct Deals take 6-8 weeks. As a reminder, Express Deals do not need to go through the ROFR waiver process that Direct (and Standard) Deals do and so can close much faster.
Generally, after a bid is accepted, the investor has three (3) days to complete their investment paperwork, and then another five (5) days to fund their investment.