Guidelines for private companies (issuers) on EquityZen
Employees’ net worth is increasingly concentrated in company stock, yet their liquidity needs aren’t on the same timeline as that of the company. Employees will have to pay down educational debt, purchase homes, and prepare for life events like the birth of a child.
Left unaddressed, employee liquidity issues can adversely impact your company in numerous ways, impacting morale and retention, and lack of control through grey-market brokered transactions.
How does this affect our Cap Table?
EquityZen uses an LLC Fund structure and is only one new entrant to the cap table.
What company information do investor(s) receive?
Our investors are only given publicly available information to make their investment decision. This includes notable investors, recent funding rounds, total funding, and any notable media or press releases. In order to access deal terms (such as deal size, valuation, share price, and share type), an investor must first be an accredited investor as well as sign an NDA with us. Furthermore, deal information is only sent to investors who have expressed interest in a specific company.
What voting or information rights are transferred to a new investor(s)?
None. Our investors only receive the underlying economics of the shares and do not have access to any information or voting rights. All of these rights stay with the company, only allowing a passive investor economic exposure to the company.
Can I control who can sell?
Yes. Our software tool will allow you to nominate shareholders for liquidity. You control who sells, how much, and when.
Can I control how much they can sell?
Yes. Our software tool will allow you to control the total dollar amount as well as the individual percentage of a shareholders stock.
Can I control when they can sell?
Yes. Our software tool will allow you to choose the start and end dates between which an employee can sell shares.
Who are the investors on your platform?
Our investors are all verified Accredited Investors under a NDA with EquityZen. They include professional angel investors, high net worth individuals, and institutional investors of all sizes. Through EquityZen, your company can get introduced to strategic investors and partners.
How are investments marketed?
Investments are marketed to our Investor base via a newsletter as well as the platform on our website. Unless the company wishes to provide otherwise, only publicly available information is provided to investors.