I can't speak for Sam, but two other issues in addition to tax and valuation are explicitly mentioned in the term sheet: (1) Public reporting: Once the market

I can't speak for Sam, but two other issues in addition to tax and valuation are explicitly mentioned in the term sheet: (1) Public reporting: Once the market for secondary sales gets to a certain point, the company is essentially public. As such, it has to register with the SEC and publicly disclose a whole bunch of information it'd rather not. This used to be triggered by having over 500 shareholders, although I believe the number has recently changed. (2) Competitors: Stockholders have certain statutory information rights. Although you can limit those rights contractually, as a general matter, you don't want your competitors owning shares.