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July 24, 2009

SharesPost – Buy and Sell Private Company Shares

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SharesPost aims to bring liquidity to the private equity market by connecting buyers and sellers directly. The problem identified and addressed by SharesPost is an important one—that is, buyer access to growing companies has been severely limited and many successful private companies have been unable to secure funding to succeed.

One of the main reasons we like SharesPost is that it offers both a low-cost solution to this problem and transparency on both ends. SharesPost features a bulletin board where buyers and sellers can interact directly: buyers can locate shares in private companies and communicate directly with sellers, and sellers can have their postings viewed by multiple buyers when they post (posting can even be done anonymously). They offer independent research from Next Up! and VC Experts plus SharesPost uses US Bank to offer an escrow service. In addition, they offer free reports as examples (check out the one on Facebook) and they encourage suggesting new companies through “Add a Company.”

There’s no doubt SharesPost is a leader in changing the complex world of private equity transactions, and we don’t hesitate to recommend them.

Practical Uses:

  • Purchase shares in promising private companies
  • Post your share for sale on the bulletin board to find interested buyers

Insider Tips:

  • Go to “Add a Company” to recommend a company to SharesPost
  • Review a contract with an attorney or other adviser before proceeding
  • Make multiple posts if you wish to sell some of your shares at different prices
  • Check out the free Facebook report

What we liked:

  • Fast, efficient way to buy and sell privately held stock
  • The use of bulletin boards to connect buyers and sellers
  • Great way for users to research private companies

What we didn’t like:

  • Currently no contracts for preferred stock

Alternatives:

Company Info:

  • Launched: June 2009
  • Owned by BrightHouse
  • Headquarters: Santa Monica, California
  • Founded by: Greg Brogger
  • Web site: http://www.sharespost.com

Costs:

  • Free for basic membership
  • $34 per month for premium membership
  • Charge by US Bank of $2,500 per transaction

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