[HN Gopher] Ask HN: Has anyone sold their employee stock on the ...
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Ask HN: Has anyone sold their employee stock on the secondary
market?
Wanted to hear about experiences from employees who have
RSUs/options in a private company and whether they were able to
sell their shares on the secondary market? Were you able to sell?
What platform did you use? Were you able to sell w/o board
approval? If so, were you able to use private forward contracts to
complete a deal? Anything you can tell me about the experience
would be much appreciated!
Author : secondarymarket
Score : 207 points
Date : 2022-02-05 18:40 UTC (4 hours ago)
| kippinitreal wrote:
| Yes, with SharesPost, equityzen and Forge. Company had a pretty
| standard policy so approval was straightforward but took a few
| months and required some legal opinions (costing $,$$$). In my
| case the deal was for the shares directly. Biggest lesson was
| really just that the fees really added up (near 10% if under
| $100k) and it's a shame more companies don't do more to broker
| these deals on employees behalf to get the best price and cut out
| the middlemen (another employer did this and it was great).
|
| DM if I can help with more info, experience with each company was
| essentially the same and you should just reach out to all of them
| to see who has inbound buy requests at the highest price. Worth
| noting that there is more room for negotiation on price than you
| might expect.
| wikibob wrote:
| No DMs on HN.
|
| Add your email address to the About Me section if you want to
| be reachable.
| secondarymarket wrote:
| Ah, interesting that your company had a standard policy for
| this. I wish mine did as well.
|
| Worried about getting (or even asking for) board approval -
| what incentive would they have to allow an employee to reduce
| their stake in the companies success prior to an IPO event?
| bb88 wrote:
| Owning shares in a pre-ipo company comes with it's own risks.
| And not wanting to be diluted from future investments is a
| valid reason to selling your shares.
|
| It's possible for the company to dilute your shares turning
| them worthless, and then generates new shares. I'm sure
| there's lots of examples you can find of dilution, but that
| was what FB did to the former CFO as shown in the movie "The
| Social Network".
|
| People keep talking about working for soulless companies when
| deciding to work for startups, but I can't think of a more
| soulless way to screw over your employees.
| bradly wrote:
| I'm also curious if anyone has purchased secondary market shares
| and what that experience is like.
| blaaaaa99 wrote:
| Bought uber, airbnb and reddit in 2018 on equidate/forgeglobal.
|
| Structured as contracts for future stock from current employees
| that get transferred to you after the ipo (and usually 6 month
| lockup) are complete.
|
| I got 100% of the uber stock (about 1x return) about 99.8% of
| the airbnb (about 2.5x return) and depending on if/when reddit
| ipos (was looking good for 10x a few months back but unlikely
| now) it will be interesting to see how much of the stock i get
| if it has gone up massively since initial purchase.
| throwbigdata wrote:
| Why is Reddit unlikely?
| blaaaaa99 wrote:
| High beta growth stocks all pretty much nuked, ipo window
| closing etc
| boulos wrote:
| > it will be interesting to see how much of the stock i get
| if it has gone up massively since initial purchase.
|
| You mean from the employees backing out somehow?
| teej wrote:
| The employee got cash already. Not sure they can simply
| "back out" without major consequences.
| blaaaaa99 wrote:
| I think its a somewhat unproven legal structure and i
| dont think it has been tested with really spectacularly
| performing stocks.
|
| If you sold rights to your stock for a million 5 years
| ago and now it is worth 15 million and still in your
| possession, it would be tempting to sell it asap and move
| to brazil and let the lawyers come and find you.
| magicjosh wrote:
| How about startup advisors? Or others who have received slivers
| of equity?
| cgreerrun wrote:
| I haven't personally, but I know people that have. The people
| that I know that sold shares used Equity Zen
| (https://equityzen.com/). The company I worked for has/had a
| "first right of refusal" option in the equity contracts, which
| basically means that when EquityZen offers you a deal, you have
| to bring the deal to your company and they can decide to buy your
| shares for the same price instead of letting you sell your shares
| to an outside party (which they might not want).
| onphonenow wrote:
| I'm curious about this as well. Does your employer know that you
| sold or not?
| SilasX wrote:
| Usually, they'll have to, since such stock is usually
| conditioned on you granting the employer the Right of First
| Refusal (i.e. the chance to beat any offer from a buyer you
| find).
| kome wrote:
| so basically... there is not a market, and it's a fake stock
| IncRnd wrote:
| You do not need a formal market for stock to be stock. A
| share of stock represents ownership. You are confusing that
| with publicly traded stock markets.
| kortilla wrote:
| Please look up right of first refusal before posting
| nonsense like that.
|
| It means they have to match the offer or let you sell. It's
| exactly like a national best bid guarantee in a real
| market.
| ceejayoz wrote:
| No?
|
| If you can find a buyer for a certain amount, you can sell
| for that amount. The company can just opt to be the buyer.
| xyzzy123 wrote:
| This seems like an interesting dynamic because the
| company has to balance getting a random outside
| shareholder vs having to buy their own shares back for
| whatever price you negotiated.
| doktorhladnjak wrote:
| Check your stock agreement. I worked somewhere it didn't
| just grant first right of refusal, but the company had to
| _approve any sale_. In practice, they approved almost no
| sales, so this was a ban on selling shares before IPO.
| devoutsalsa wrote:
| Ownership is ownership. Your car isn't listed as a public
| company on the NYSE, but that doesn't mean your 1 share
| (worth 100%) in your car is fake.
| secondarymarket wrote:
| To transfer the stock directly you will need approval from the
| company/board.
|
| I'm curious if anyone has done it without by using a private
| contract between buyer/seller (google: forward contracts).
| rco8786 wrote:
| They'll have to, if you're actually transferring ownership of
| the shares.
| e10jc wrote:
| I sold once with Equityzen and once with a different company, I
| forget the name. Both times were great, but it took years from
| start to finish. They'll help you through the process. The fees
| were levels below the taxes, not bad at all. If you are
| interested and your company is listed on secondary sites, why not
| list some shares and see if anything comes through.
| secondarymarket wrote:
| I'll look into those!
|
| My main concern is around requiring board approval. There isn't
| any formal policy for employees seeking liquidity, and I'm not
| sure the board will be receptive.
|
| I mean, what incentive would they have to allow employees to
| sell their shares before an IPO/exit event?
| s1artibartfast wrote:
| Not sure why this is Marked dead. Seems like a perfect question
| for this forum. I too would like to know the answer.
| eganist wrote:
| first submission by a new account, guessing from a throwaway
| behind tor so that the question can't be tied back to a
| specific person or company.
|
| That's why it's useful for a handful of people to have showdead
| enabled: so that good questions or comments lost to
| antispam/antitroll filters can be fished out from the abyss.
|
| ---
|
| As for questions like "Were you able to sell w/o board
| approval," I feel like this depends on the terms of the
| agreement, no? I mean I'm keen on hearing the data for the sake
| of having a dataset, but the question itself doesn't seem to be
| immediately relevant unless the person answering the question
| happens to work at the same company as the person asking the
| question.
| s1artibartfast wrote:
| Thanks! Makes sense
| IncRnd wrote:
| This forum is run by venture capitalists, which might have
| something to do with the question posed on this page.
| klohto wrote:
| Stop reading Breslow's twitter man
| dang wrote:
| We don't moderate HN that way. I know that contradicts the
| default cynical view, but people should replace that view
| with the following alternative cynical view, which is more
| accurate:
|
| (1) HN's only value to YC is the community; (2) the community
| only comes here to the extent that it finds HN interesting;
| (3) therefore, to optimize HN's value, we have to optimize it
| for being interesting. Moderating for parochial interest
| (e.g. suppressing things that some $ingroup doesn't like--VCs
| or whoever else) would make HN less interesting, so we don't.
|
| We also don't do it because (a) it would be wrong and (b) it
| would feel bad, but those concerns don't belong in a cynical
| argument. YC's business interests, however, do belong in such
| an argument, and it's very much in YC's business interest to
| keep this community as happy as possible. That's a sort of
| miracle if you think about it--a freak of economic nature--so
| we should all enjoy it for as long as possible.
|
| Past explanations in case anyone wants more:
|
| https://news.ycombinator.com/item?id=23284262
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so.
| ..
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor.
| ..
|
| p.s. The OP was originally killed by a software filter--those
| are tuned more aggressively for new accounts. Fortunately
| other users vouched for the post, which unkilled it long
| before mods saw it. That's the vouching feature working as
| intended. See
| https://news.ycombinator.com/newsfaq.html#cvouch.
| smoyer wrote:
| Hi dang ... I know this is meta but if you put this comment
| in a page linked at the bottom of HN, we can point confused
| users this text without wasting as much of your time. Of
| course, those that truly believe in conspiracy theories
| will either assume you're a disinformation source or in-
| the-dark regarding your bosses true motives. You can't
| really fight that.
|
| As an aside, thanks ... to a large degree I enjoy this
| community because of the effort to keep the discussion
| civil (sometimes embracing debate over argument) and that I
| can learn at least a little about fields outside my own.
| It's much appreciated.
| [deleted]
| subpixel wrote:
| Anecdotally, this same line of thinking revealed the utter
| worthlessness of my ISOs upon leaving a company that is valued
| below a billion dollars and is not on a clear IPO trajectory.
| ed_balls wrote:
| >Were you able to sell?
|
| yes, the company allowed people to sell up to 25% of vested
| shares if you were employed for more than 24 months
|
| >What platform did you use?
|
| Carta
|
| > Were you able to sell w/o board approval? If so, were you able
| to use private forward contracts to complete a deal?
|
| No
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(page generated 2022-02-05 23:01 UTC)