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Private companies are still allowed to give share to employees. Employees are then allowed to sell their stock periodically (every 6 months in this case).
by Voloskaya 8y ago
Private companies are still allowed to give share to employees.
Employees are then allowed to sell their stock periodically (every 6 months in this case).
- shawn 8y agoRight, but with who?
- Voloskaya 8y agoDepends, the company could buy back, or during a founding round, some part of that founding can be reserved to buy employee shares. External investors are also allowed to buy from employees during this period.
- lccarrasco 8y agoCompanies have buyback programs or you could sell them directly to other shareholders.
- anthonybsd 8y agoOther private investors (typically institutional ones), or if the company has enough cash, the company itself.
- JumpCrisscross 8y ago> Employees are then allowed to share their stock periodically (every 6 months in this case) Some companies do periodic buybacks. Private shares can generally be sold at any time to accredited investors.
- peeters 8y agoThe main difference though is sell to whom? In the case of a public company, you sell your shares via the market to whomever will buy them. In the case of a private company, you're selling the shares back to the company, and the valuation is formulaic instead of market-based (unless there is some kind of private "market" that continues, but I've never seen that and would doubt its legality).