You’ve made your first private company investment on EquityZen’s platform. Congrats! So what’s next? Beyond, waiting for an IPO or exit, there are a few things you can do to keep tabs on your investment. Here we’ll outline the tools and information available to you as an EquityZen investor to help you keep track of your private company investments.
Where is my investment held?
Similar to when you invest in the public markets, the money paid to make the investment is sent to the selling shareholder. Therefore, once your investment has closed, you have exchanged your cash for shares and that cash is no longer held by the escrow bank. As noted in your signed subscription agreement or transfer notice, you now own shares in the company either directly or via a Fund.
When you invest in a private company via an EquityZen fund (aka a Standard Deal), you own your pro rata right to the shares held by the fund. That fund sits on the capitalization table of the private company as an investor. If you invest via a Direct Share Acquisition, you own shares directly and your name or investment entity sits directly on the cap table. In either case, it is very unlikely that you’ll hold physical shares. Instead, most private companies issue digital shares via their equity administrator. These shares are noted in the digital systems of the equity administrator where they will be held until the company experiences an exit event like an IPO, merger or acquisition.
Finding information about your investment
Once you invest in a company, you’ll find your Investment Summary and all of your related deal documents under the “Closed” section of your Portfolio on EquityZen’s platform. The “Closed” investments tab will summarize all of your previously completed transactions with EquityZen. Here you can find the amount of your investment, the price per share paid and the implied valuation at which you invested.
You can click “View Details” next to any investment to find more information about that specific investment. Additional information like the equivalent number of shares you own via the Fund can be found here along with any investment updates and all the documentation related to your investment.
From the “Closed” section of your portfolio you can also click “Explore an Exit” if you’re interested in selling your investment via an EquityZen Express Deal before an IPO or exit. You’ll know if you are eligible to sell via an Express Deal when you choose your investment amount. To be eligible to sell via an Express deal you will need to own greater than 2% of the fund you invested in, and hold the shares for at least 12 months. If we have active investor interest and you’re eligible to sell, you’ll also be notified so you can decide if you want to sell or hold.
Staying on top of the latest news
Outside of EquityZen’s platform there are other things you can do to keep track of your investment. We encourage you to add a news alert for any companies they are invested in. This will make sure you’re aware of the latest company news - from new funding rounds, to strategic partnerships, new product launches and more. If a funding round occurs, you’ll be able to compare the implied valuation that you invested at versus the valuation at the new funding round.
When news comes out that the company is planning an IPO or exit, we’ll reach out to the company to confirm and notify all investors. Once confirmed, we’ll start working with the company to manage the exit process. You can find out more about what to expect when a company you invest in goes public here.
Questions? Feel free to reach out to support@equityzen.com where our team is available to support you on your investor journey.
Disclosure 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
Interested in browsing the private company investment opportunities available on EquityZen's marketplace?
