Robinhood founder and CEO, Vlad Tenev, penned an OpEd in the Washington Post last week drawing attention to private markets and the need for broader access (thanks for the EquityZen shout out!). While we don’t need to wait for tomorrow for this to happen - it’s already happening today - we fully agree the opportunity and need will only grow
Not only do we agree that access to investments in private companies has historically been limited to too few, EquityZen was built to ensure that wealth creation isn’t limited to the already wealthy. To bring this dream to life, EquityZen was founded 12 years ago and in that time has focused on three areas key to democratizing this market: broadening access, reducing transaction friction, and committing to partnership.
Broadening Access. With proprietary technology that enables transactions, EquityZen has helped investors invest as little as $5K in the private companies innovating our world through our funds. In doing so, we’ve facilitated billions of dollars of transactions. Those numbers only tell part of the story… One timely example: EquityZen investors collectively own 2% of a large pre-IPO, AI company. Nearly 1,000 EquityZen clients, through our funds, have invested in this company, many of whom wouldn’t meet the investment minimums required for access on other platforms or via venture capital firms. By lowering the investment minimums, we’ve made investments in leading private technology companies available to a wider audience, not just those who can write a $1M check. This is proof of EquityZen living its mission to bring “private markets to the public.”
Reducing Friction. Like other financial markets, private company transactions are highly regulated and require dozens if not hundreds of pages of legal contracts. EquityZen’s platform has reduced the timeline for private company transactions from months to weeks. Transactions pre-approved by private companies can now be closed in as little as hours thanks to our technology.
Commitment to Partnership. We are proud to have earned the trust of the private companies we transact in. We also have a clean track record with our regulators. They are our partners. By bringing standardization and transparency to companies, and reducing their administrative burden, we’ve heard “the board prefers having you on the cap table, it's put the company in a better position.” and “Will continue sending you shareholders, you provide a great service.”
Yes, regulation currently limits access to private market investing to accredited investors (and we are advocates for opening up access). Half of the US’s accredited investors, certainly the population of non-accredited investors, aren’t even aware that they can invest in private companies, let alone have a view on which ones to buy.
So both things are true: we don’t need to wait for some point in the future to democratize access because access is already here for so many more than are actually participating. Meanwhile, opportunity exists to broaden responsible access even more. Tokenization will likely come at some point to this market (and we’re ready for it), EquityZen is proud to already be the choice for informed, empowered investors who are ready to invest in the companies shaping the future today.
Not all pre-IPO companies will go public or be acquired, and not all IPOs or acquisitions are or will become successful investments. There are inherent risks in pre-IPO investments, including the risk of loss of the entire investment, illiquidity, and fluctuations in value and returns. Investors must be able to afford the loss of their entire investment. Testimonials and endorsements were made by investors and stakeholders that participated in EquityZen funds. These testimonials and endorsements were unsolicited and the investors and stakeholders that made them were not compensated for their testimonials or endorsements. Please refer to our Disclosures page for a discussion of conflicts of interest that arise from these testimonials and endorsements.
