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Employees can sell to the investor. I don’t think investors want to manage 100+ stock sales including sending in tax forms etc. There are active secondary mar
by adrr 4y ago
Employees can sell to the investor. I don’t think investors want to manage 100+ stock sales including sending in tax forms etc. There are active secondary market to sell shares in private companies.
- marcinzm 4y ago>There are active secondary market to sell shares in private companies. Some startups make is harder by having a clause of first refusal for selling stock.
- adrr 4y agoFirst right refusal just gives the company/current investors first dibs at any potential stock sale.
- ska 4y agoSome have no secondary sale clauses too. Depending where you are they may not be enforceable. Or you any have got RSU’s that aren’t saleable the way anyhow. For very small/early startups, there may not be an effective secondary market at all, let alone permission to participate in a raise.
- marcinzm 4y agoSure and that means investors are much less likely to buy the stock. They go through all the effort and then if it's a good deal someone else buys it instead. Some secondary markets will outright refuse to deal with shares that have such clauses.