PrivatEquity.biz, a peer-to-peer platform that directly connects shareholders in pre-IPO private tech companies with accredited investors, has secured total shares for sale of close to $30 million in senior employees or former employees’ stocks in 25 leading private tech companies such as Palantir, DocuSign, Gett, Outbrain, IronSource, and Ezbob.
PrivatEquity.biz will be the first platform in Europe and Israel to allow senior employees or former employees to sell their stocks in private tech companies directly to accredited investors, without the need to go through corporate management. It will allow more employees to enjoy an earlier exit and will help democratize the tech industry, allowing more people to enjoy the wealth created by it.
To provide a transparent arena for smooth and thoughtful transactions, PrivatEquity.biz hired the analysis and research services of Zirra, a technology-based company that analyzes companies using big data and AI. Zirra will supply the platform with insightful research reports on select companies. PrivatEquity.biz also hired accounting firm BDO and law firm APM to make sure the platform works with full compliance with the local law.
PrivatEquity.biz allows accredited investors in Europe and Israel for the first time to buy private tech companies’ share in smaller portions, as the market has previously limited the access only to institutional or large-scale investors. With PrivatEquity.biz, smaller accredited investors of $100,000 per investment and above will have the ability to diversify their investments further and get access to equity in pre-IPO startups by associating them under a limited partnership. It will enable them to manage the risk accompanied by an investment in a tech company while employees will be able to retain some of their stocks.
Dealing with the private tech sector is also full of blind spots, as both those selling stock and investors alike have a hard time valuing shares and assessing the success of a company. Zirra’s AI-powered research and analysis service will provide accredited investors and stock sellers with research reports of private companies, that will supply them with data and insights that will improve their visibility into private tech companies. This includes estimated valuations, NLP-generated lists of competitors, expected time to exit, risk and success factors, as well as a rating of the team, product, momentum, and execution.
PrivatEquity.biz’s platform provides further tools to ensure that the transactions run smoothly. These solutions include tools for determining the pricing of shares in a private company, digital ledger technology used to enhance equity management capabilities, and an online secure data room for transaction participants, which also allows investors to exchange confidential documents.
About 2,000 accredited investors are listed on the platform, which was recognized by Red Herring as one of the top 100 innovative companies in Europe in 2016. A few months ago, PrivatEquity facilitated the selling of stocks of the taxi-hailing app Gett to a London-based investor, which was offered for sale by a senior employee in the company. No details regarding the value of the shares were disclosed, but Zirra has estimated Gett’s valuation last April to be around $2.2 billion.
“PrivatEquity.biz is the only global platform that allows ordinary, small-scale accredited private investors to buy secondary stocks of pre-IPO startups, and employees or former employees in those companies to sell them directly and enjoy better liquidity,” said PrivateEquity.biz founder and CEO Sigalit Cohen. “As more employees and former employees can now enjoy an earlier exit, the tech industry is being democratized. Working with reliable research, legal and accounting teams will support the platform with a smooth, compliant, transparent, and discreet deal making for both sides.”
“Such a platform is important in a world in which investment decisions in private companies are still too dependent on rumors or skewed information, rather than on objective, data-driven, thoroughly informative analyses,” said Moshit Yaffe, CEO, and co-founder of Zirra. “The platform will also allow for accredited investors to invest in better companies which align better with their portfolio, with the help of up-to-date data, insights, and expert opinions.”