An Open Letter to Millions of U.S. Private Company Employees

As the CEO of one of the largest private market secondary trading platforms, I’d like to let you in on a secret about today’s private share marketplace. If you are a private company employee that needs or wants to sell shares in today’s market, you’ll quickly discover that the odds are seemingly stacked against you. This letter will help explain how these markets really work from an insider’s perspective so you can avoid common missteps. I’ll even give you a few tips to help make your experience in the secondary share market a good one. 

As a private company employee, your hard-earned equity is important to you. Equity compensation is a huge reason why so many of the best and brightest choose to work for private companies. Sure, you love the passion and intensity of startup culture. You live to disrupt, you believe in the mission, and you relish being an underdog. At the same time, you’ve poured your heart and soul into the success of your company, so it’s only fair you should share in the success you helped create for your employer. That reward sometimes comes in the form of selling the shares you were awarded, assuming your company permits share sales. However, even when your employer does allow share transfers, you’ll quickly find out that selling your shares can be a real challenge. Let me explain.

With the average company now waiting a decade or more before going public, there is a decent chance that at some point you’ll be looking to sell shares prior to an IPO or other liquidity event. Maybe you have a valuable option that’s about to expire and don’t have cash on hand to exercise it. Perhaps you just got married and want to buy your first house. Hopefully, your company runs periodic tenders on a platform like Nasdaq Private Market (NPM) as an organized, fair, and efficient way of offering liquidity to employees. If not, you’re left to your own devices to sell your shares in the opaque private secondary market.

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