Exploring express deals on EquityZen

An Express Deal is a single company fund offering in which the seller in the deal acquired their position by investing in an EquityZen fund. In other words, someone who invested through our platform is now selling the fund interest they purchased.

Express Deals are called “express” because they can close in as little as 3 days! This is because these transactions do not require third-party approvals to close.

Here’s an example to help illustrate: In 2020, Jane invests in Company A at $10 per share via a Standard Deal on the EquityZen platform. In 2022, Jane needs liquidity. With Express Deals, Jane can create a sell order for her position in Company A, list the order on EquityZen for investors to see, and get the cash she needs all within a week!

Please note there is no guarantee that any fund investment will be eligible for an Express Deal in the future. Likewise, there can be no guarantee that a buyer can be found.

EquityZen charges sellers a 5% fee when the transaction closes. The Placement Fee is paid to EquityZen Securities LLC ("EquityZen Securities"), our SEC-registered affiliated broker-dealer and member of FINRA.

Yes, the suggested price range tool is simply meant to serve as a guideline when creating a sell order. Our team compiles the range using data from recent funding rounds, active sell orders on our platform, and additional company news. While the range is used to give sellers a rough estimate of the likelihood that their order will clear at a given price, the price that the seller ultimately chooses to list their order at is entirely at their own discretion.

The Market Demand graph serves as a data point for potential sellers to view the total amount of indications of interest by EquityZen investors in a given company. In other words, Market Demand shows investor sentiment rather than explicit open buy orders.

One way a potential seller might utilize this data point is that Jane wants to sell her position in Company A, which she invested in through an EquityZen fund. She wants to sell at $10.00 per share. The Market Demand metric shows that there is $200,000 worth of investor interest in Company A. Therefore, Jane might aim to sell up to 20,000 units rather than 40,000, given the known investor interest in this company.

In order to sell your holdings via an Express Deal, you need to hold more than 2% of the initial fund (in addition to holding the position for at least a year). Additionally, the size of your sale must also clear the greater than 2% threshold. As more than 2% of a given fund differs from fund to fund, the number of shares you will need to hold/sell to hit this requirement for sale will differ depending on the size of the given fund and your initial investment. Please note, in some instances, the fund size may change.

To be eligible to sell your EquityZen fund holdings in an Express Deal, among other things, you need to hold more than 2% of the initial fund (in addition to holding the position for at least a year for an initial fund purchase, or at least 6 months if purchased in an Express Deal). If you do not meet the greater than 2% threshold, then you cannot exit your LLC ownership via an Express Deal. This restriction exists to protect all members of the fund from adverse tax consequences.

Unfortunately, this is not flexible as it is aligned with regulatory requirements.

These limitations are found in the subscription agreements all members sign when acquiring an interest in the fund. Specifically, Section 6(f) of the subscription agreements contains the following investor representation:

“You are aware that an investment in the Series is highly speculative and subject to substantial risks, some of which are set forth on Exhibit B hereto. You have read and understand such risks in their entirety and agree that these risks, and other applicable risks, may adversely affect your investment in the Series. You have adequate means of providing for your current needs and possible contingencies, and are able to bear the high degree of economic risk of this investment, including, without limitation, the complete loss of your entire investment in the Series, the lack of a public market, and the limited transferability of the Interest, which may make the liquidation of this investment impossible for the indefinite future.”

Unfortunately, this is not flexible as it is aligned with regulatory requirements.

If you received a suggested price range and the likelihood of sale when creating your sell order, and you have gone through the transaction flow and clicked submit, then your sell order will be posted within 24 hours to the given company page for EquityZen investors to purchase.

However, if you weren’t presented with either of those functions, it means we are still working on creating a price range for the company. Once we have this completed, you will receive a follow-up email from us asking to reconfirm your sell order. Then, once you complete this process, your sell order will be posted to the given company page.

Yes, you can modify or cancel your sell order at any time until an investor has completed the necessary paperwork to officially claim your offering. At that point, you will no longer be able to make changes to your sell order. Please note that your sell order is considered binding—akin to a “good-til-cancel” order—if actively posted on our platform.

To modify or cancel your sell order, visit your Portfolio page and click the Modify Sell Order button for the corresponding offering.

Ultimately, it is up to our investors to decide whether they want to buy at the price you have chosen for your sell order. That said, there are a few best practices to increase the chance of a match:

Think of this like buying tickets on StubHub. When you select an Express Deal to invest in, we reserve that deal for you and you alone, including hiding the deal so no other investors can see it. You then have a defined period of time (shown in a timer at the top of the transaction process) during which you must complete and submit your transaction. If you do not complete the necessary steps in time, you will be removed from the deal and the deal will be placed back onto our platform for other investors to access. It’s all in the name: Express.

Yes, you must hold an eligible investment for not less than one year before you can utilize Express Deals. If you invested through an Express Deal, your minimum holding period is six months.

The reason you are unable to adjust the investment size for an Express Deal is because the investor in an Express Deal must purchase the whole investment size. With Express Deals, the seller creates a sell order by choosing their desired price per share and number of shares. The buyer must take the whole order to move forward. This can lead to substantially lower or higher investment sizes for investors who are used to seeing the flat $20K minimums on our Standard Deals.

No, you will only pay a placement fee should your order be executed successfully. We will automatically remove the fee when sending the funds to your bank account.

Yes, as long as the fund remains eligible for Express Deals, you are able to resell a position you acquired via an Express Deal. If you invested in an Express Deal, you can generally resell your position at least 6 months after your purchase closed.

Investors have 3 days to fund their Express Deals investment from the moment they submit their transaction. Your investment deadline can always be found on your Portfolio page. Simply click on the ongoing deal and you will see a timer counting down at the top of the page.

You must fund your investment via a wire or ACH push payment. Failing to send funds by the investment deadline will result in removal from the deal. At that point, the offering will be placed back on our platform for other investors to take.