The number of public agencies in the u.s. is at a 40-yr low; that’s good news for EquityZen, a four-yr-old, new york-based business that operates a secondary industry for business-authorised transactions in pre-IPO stock.
The 20-adult company says it has already closed greater than 2,000 investments in additional than 70 inner most firms, and Draper pals is making a bet that number will grow notably. To wit, the early-stage undertaking firm simply led a $ 3 million series A circular in EquityZen, with participation from prior backer WorldQuant Ventures.
EquityZen had previously raised seed funding from 500 Startups, LaunchCapital and Projector Ventures. It has now raised $ 6.5 million altogether.
definitely, the business has been deciding upon up momentum over the ultimate year. in accordance with CEO Atish Davda, EquityZen now serves 20,000 authorized investors, and roughly 1 / 4 of these people joined in 2017; he additionally says his company has, in the first six months of this 12 months, surpassed the transaction volume it noticed in 2015 and 2016 — mixed.
little question part of that decide on-up can also be tied to EquityZen decreasing the determine dimension required to make investments, from what was once $ 20 million to $ 20,000 (and it wants to get that minimum down extra, Davda says).
amongst those groups whose pre-IPO shares EquityZen has helped to change are Nutanix, Veracode, Cloudera and AppDynamics. EquityZen has also helped facilitate the exchange of shares of the precise estate brokerage Redfin, which is at the moment in the midst of a pre-IPO roadshow.
requested how the deal got here collectively, Davda tells us he changed into in San Jose for a convention when he first heard from longtime VC Tim Draper — who has been focused largely on fintech in fresh years — and who Davda says has “such intuition concerning the manner things are headed; he instantly received what we were doing.”
requested how the enterprise plans to invest the capital, Davda noted the theory is to expand the way it functions investors both within and outdoors the U.S. and to do as a great deal because it can to position the deepest market close by of extra of the general public.
EquityZen is considered one of numerous secondary marketplaces to flourish in fresh years, as more companies have remained deepest for longer. some of its greater opponents include trade Ventures, a San Francisco firm that has been around for 17 years, and SharesPost, an eight-year-historical, San Francisco-based outfit that first made its name through assisting facilitate pre-IPO revenue of facebook shares.
different, more recent outfits encompass Akkadian Ventures, new york project companions and Scenic Advisement.
Draper had himself toyed with the theory of opening a secondary market called Xchange round seven years ago, however at once abandoned the effort.
(Correction: This post firstly stated that EquityZen had raised $ 6.5 million in sparkling funding; apologies; the company’s initial messaging inadvertently at a loss for words a couple of outlet.)
Pictured above, left to right, EquityZen cofounders Phil Haslett, Shriram Bhashyam, and Atish Davda.
Fundings & Exits – TechCrunch