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Secondary trading of pre-IPO companies?
- Thread starter long
- Start date
So you don’t actually own anything like a stock or option? Would it be a partnership like a hedge fund? I don’t think that’s what the link was talking about. I was thinking it was basically a bet that is a little shady.
Some brokers use an SPV to put the stock in a then take a fee+carry instead of upfront fee. 2/20 is v high though. Should be 1/10 for these type of structures...
I’m mildly interested in learning how to participate in this stuff. But….I’ve never traded stocks myself, just futures. I contribute to a managed 401k for exposure to that side of things. As stated in my post, my interest in secondaries was sparked when I was trying to buy a stock as a keepsake or token of a company that I liked because of what they do, not how they perform financially. Similarly, a few years back I read Richard Brandon’s autobiography and I wanted to buy some stock in Virgin just to feel like I was a part of it. It was disappointing to discover that it’s private and no stock can be bought. Is there a marketplace for secondaries? Like long term buy and hold? I’m not looking for a short term bet with a bookie. I would want the other side of the bet to be an enduring entity.Secondaries in private companies are very common now. Vc backed cos are staying private for much longer so employees need to be able to sell, it’s actually also an exit route for early stage VCs.
I just searched Virgin stock again and I can actually buy stock in Virgin Galactic! For the bargain price of $1.79, that’s 97% lower than it’s all time high! I can buy my kid some space stock…..and own some of Virgin! There’s one Christmas gift I can cross off the list.
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I’m mildly interested in learning how to participate in this stuff. But….I’ve never traded stocks myself, just futures. I contribute to a managed 401k for exposure to that side of things. As stated in my post, my interest in secondaries was sparked when I was trying to buy a stock as a keepsake or token of a company that I liked because of what they do, not how they perform financially. Similarly, a few years back I read Richard Brandon’s autobiography and I wanted to buy some stock in Virgin just to feel like I was a part of it. It was disappointing to discover that it’s private and no stock can be bought. Is there a marketplace for secondaries? Like long term buy and hold? I’m not looking for a short term bet with a bookie. I would want the other side of the bet to be an enduring entity.
I just searched Virgin stock again and I can actually buy stock in Virgin Galactic! For the bargain price of $1.79, that’s 97% lower than it’s all time high! I can buy my kid some space stock…..and own some of Virgin! There’s one Christmas gift I can cross off the list.
You can check out equityzen.com. They have quite a bit of flow and seem to do smaller sizes (a lot of the brokers are 1M minimum).
Yeah, it sounds like it's not for me. Maybe I'll just make up some fake stock certificates to hang on the wall. Or join a fan club and get a membership card.You can check out equityzen.com. They have quite a bit of flow and seem to do smaller sizes (a lot of the brokers are 1M minimum).
big issue with secondaries is that pre-IPO there are multiple share classes with very different terms. Wasnt a massive issue before the big cuts in valuation but now makes earlier series almost worthless.
Later series have a lot of liquidity preference so you need to know the total liqpref before you buy an earlier series.
For example, a 300M valuation company with 400M total liqpref means that late stage equity holders have a 400M claim on the company before early stage holders get paid out...
Later series have a lot of liquidity preference so you need to know the total liqpref before you buy an earlier series.
For example, a 300M valuation company with 400M total liqpref means that late stage equity holders have a 400M claim on the company before early stage holders get paid out...