EquityZen

EquityZen is an international investment marketplace for shareholders to purchase and sell shares from pre-IPO companies. EquityZen was founded by Atish Davda, Phil Haslett, and Shriram Bhashyam in 2013.

EquityZen is a marketplace to buy and sell shares of pre-IPO companies, including both single-company and multi-company funds. Both individuals and entities can make investments. When placing an order for an investment, investors request the number of shares they want to purchase, and EquityZen places the order whenever the shares are available—unlike on a typical stock exchange, shares are limited and not always available. Also, buying shares makes the investor a member of the LLC behind the offered shares; they do not own the actual stock. EquityZen requires minimum investment amounts. First-time investors can make investments at a reduced minimum amount of $10,000, although this minimum price is not available for all investments. Those who have invested in at least five deals are also eligible for the minimum deal. The minimum investment amount for investors with less than five deals is normally $20,000. EquityZen charges a sales fee of between 3-5%, depending on the investment amount. Actively managed investments are charged recurring management and/or carried interest charges.

EquityZen is free to join, and investors can be located anywhere in the world (except for, due to sanctions, the countries of Crimea, Iran, North Korea, Sudan, and Syria). EquityZen sometimes cannot accept investments from multiple countries like China, Belarus, Libya, Ukraine, Russia, and others. Investors must be accredited, per the SEC's definition (for investors in the United States). Investors from other countries must meet the legal conditions of their own countries. An accredited investor, per the SEC, must meet one of the following conditions: has earned over $200,000 in income (or $300,000 if combined with a spouse's income) both years in the past two years and expects the amount to be about the same each year forward; has a net worth of over $1 million (excluding the value of the investor's primary dwelling) either alone or in combination with a spouse's; or has a license in good standing from a Series 7, 65, or 82 FINRA-administered exam. While investors can join the site without first being accredited, they must be accredited to make any share purchases.

Transactions are made through an EquityZen fund. Self-directed IRAs and 401(k)s can be used to purchase shares. Users can only invest in companies that are listed after they join the site, not before.

Also, unlike a stock market where shares can typically be sold on demand, EquityZen share sales must first be approved by the company behind the shares. Investors submit a form indicating their desire to sell their shares, and the company and EquityZen work together to find a buyer. Share sales must be a minimum of $175,000.