You’re an investor in private companies and seeking to realize your gains. The challenge lies in finding a marketplace for these shares. While the idea of an entrepreneurial exchange where private company shares can be easily bought and sold is appealing, alternative investors typically face hurdles: time and exposure.
Time constraints arise because many accredited investors acquire restricted stock under Rule 144. After two years of ownership, this stock can be freely traded, pending the company removing the restriction. Then comes the matter of exposure.
Consider how you initially invested. Your decision was likely influenced by a relationship or publicity that established the company’s credibility. Selling shares requires the same approach – effectively communicating the company’s credibility to alternative investors. While significant capital is available from alternative investors, connecting with them is your responsibility.
Company leadership plays a crucial role in expanding exposure by providing information to the financial community and fostering transparency. Leaders must clearly communicate the company’s value proposition to potential investors, highlighting the reasons for investment now.
When private companies adhere to established reporting standards, their shares gain visibility, valuation, and increased liquidity, tapping into the ready and waiting alternative investment market.