4 ms·

Anyone remember Sandhill Exchange, and how badly they got slapped around by the SEC? I'd steer clear of this sort of thing until further notice.

a_small_island 10y ago
>"Sand Hill began as two Silicon Valley entrepreneurs creating an online business involving the valuation of private startup companies in the region along the lines of a fantasy sports league. But Gerrit Hall and Elaine Ou changed their business model multiple times, and earlier this year Sand Hill evolved to invite web users to use real money to buy and sell contracts referencing pre-IPO companies and their value. Sand Hill sought people to fund accounts using dollars or bitcoins. Hall and Ou did not ask users about their financial holdings or limit the offering to users with any specific amount of assets. In fact, they wrote on the Sand Hill website: “We accept everybody regardless of accreditation status.” Hall and Ou intended to pay users who profited from their contracts. " Interesting. Hadn't heard of this. Here's the SEC link: https://www.sec.gov/news/pressrelease/2015-123.html https://www.sec.gov/news/pressrelease/2015-123.html
sohailprasad 10y ago
Hi there, co-founder of Equidate here, happy to answer any questions you have. We're well aware of Sandhill Exchange — they were akin to a prediction market — we're a market where employees and investors who own shares are able to get liquidity, and accredited investors are able to invest. We've worked with our primary outside counsel, Lowenstein Sandler (an internationally-prominent securities law firm), to ensure our compliance with all regulation. As the article mentions, we've discussed Equidate with regulators since 2014, and this past January FINRA approved our purchase of a broker-dealer. Finally, we've gone above and beyond to make sure our customers are protected. We have an exclusive underwriting agreement and insurance policy with Munich Re, the world's largest reinsurance company, to protect our investors from fraud. It's very rare for a startup our size to have a full-time Chief Legal Officer & Chief Compliance Officer, and it's a testament to our efforts to get this right.
- vadym909 10y ago
  Can you explain in plain English what 'insider' information you publish and how you allow trading in private companies when this clearly is not possible elsewhere. And if it is possible why don't these companies just IPO.
  - Arnt 10y ago
    It's possible to trade in private companies. I've done it. What you need is a willing seller and a willing buyer. Finding a willing other party is the trick, in part because a lack of information makes people wary of trading. So this company provides a little more information and a matchmaking registry.
  - sohailprasad 10y ago
    Sure thing. We share information about companies' stock prices, share counts, and valuations — data that has historically unavailable, inaccurate, and/or very expensive (tens to hundreds of thousands of dollars per year). We show you real-time news about these companies, and let you track the value of your portfolio if you're an investor or employee. We've built tools to use this data: https://equidateinc.com/browse https://equidateinc.com/browse Without even signing up, you can answer questions like: "Show me Series B/C companies that have raised $10-100M, have a valuation of $100M-$1B, have less than 200 employees, with a B2B business model in the Transportation industry." We think that's awesome — whether you're an investor looking for investment opportunities, an employee looking for a new job, or a just doing research on companies, it can be incredibly powerful for the entire ecosystem to have access to this data and the tools to use it. Companies don't IPO for a variety of reasons. Going public is a source of financing for companies — in recent years, with hedge funds and private equity firms participating in Series B/C/Ds++, there is a lot more capital available in the private market. New regulation has made it far more expensive to go public and to stay public. Going public is arduous on the company from the perspective of the time and attention it takes from management. And finally, once a company is public, they are subject to the whims of the market and have to answer to new investors who have a short-term focus on quarter-to-quarter earnings, often at the cost of not being able to have full autonomy to execute on their long-term vision.
- 10y ago

a_small_island 10y ago

>"Sand Hill began as two Silicon Valley entrepreneurs creating an online business involving the valuation of private startup companies in the region along the lines of a fantasy sports league. But Gerrit Hall and Elaine Ou changed their business model multiple times, and earlier this year Sand Hill evolved to invite web users to use real money to buy and sell contracts referencing pre-IPO companies and their value. Sand Hill sought people to fund accounts using dollars or bitcoins. Hall and Ou did not ask users about their financial holdings or limit the offering to users with any specific amount of assets. In fact, they wrote on the Sand Hill website: “We accept everybody regardless of accreditation status.” Hall and Ou intended to pay users who profited from their contracts. " Interesting. Hadn't heard of this. Here's the SEC link: https://www.sec.gov/news/pressrelease/2015-123.html https://www.sec.gov/news/pressrelease/2015-123.html

sohailprasad 10y ago

Hi there, co-founder of Equidate here, happy to answer any questions you have. We're well aware of Sandhill Exchange — they were akin to a prediction market — we're a market where employees and investors who own shares are able to get liquidity, and accredited investors are able to invest. We've worked with our primary outside counsel, Lowenstein Sandler (an internationally-prominent securities law firm), to ensure our compliance with all regulation. As the article mentions, we've discussed Equidate with regulators since 2014, and this past January FINRA approved our purchase of a broker-dealer. Finally, we've gone above and beyond to make sure our customers are protected. We have an exclusive underwriting agreement and insurance policy with Munich Re, the world's largest reinsurance company, to protect our investors from fraud. It's very rare for a startup our size to have a full-time Chief Legal Officer & Chief Compliance Officer, and it's a testament to our efforts to get this right.

vadym909 10y ago
Can you explain in plain English what 'insider' information you publish and how you allow trading in private companies when this clearly is not possible elsewhere. And if it is possible why don't these companies just IPO.
- Arnt 10y ago
  It's possible to trade in private companies. I've done it. What you need is a willing seller and a willing buyer. Finding a willing other party is the trick, in part because a lack of information makes people wary of trading. So this company provides a little more information and a matchmaking registry.
- sohailprasad 10y ago
  Sure thing. We share information about companies' stock prices, share counts, and valuations — data that has historically unavailable, inaccurate, and/or very expensive (tens to hundreds of thousands of dollars per year). We show you real-time news about these companies, and let you track the value of your portfolio if you're an investor or employee. We've built tools to use this data: https://equidateinc.com/browse https://equidateinc.com/browse Without even signing up, you can answer questions like: "Show me Series B/C companies that have raised $10-100M, have a valuation of $100M-$1B, have less than 200 employees, with a B2B business model in the Transportation industry." We think that's awesome — whether you're an investor looking for investment opportunities, an employee looking for a new job, or a just doing research on companies, it can be incredibly powerful for the entire ecosystem to have access to this data and the tools to use it. Companies don't IPO for a variety of reasons. Going public is a source of financing for companies — in recent years, with hedge funds and private equity firms participating in Series B/C/Ds++, there is a lot more capital available in the private market. New regulation has made it far more expensive to go public and to stay public. Going public is arduous on the company from the perspective of the time and attention it takes from management. And finally, once a company is public, they are subject to the whims of the market and have to answer to new investors who have a short-term focus on quarter-to-quarter earnings, often at the cost of not being able to have full autonomy to execute on their long-term vision.
10y ago