SharesPost

Posting to buy on SharesPost or agreeing to other members’ posts on your own is free (although the seller is charged a sales commission). If you elect to have a Company Specialist manage a transaction for you, the Specialist will discuss a sales commission with you that will vary depending on the specifics of your intended purchase. U.S. Bank is available to process any right of first refusal, work with the company to transfer the shares and generally act as the escrow agent. U.S. Bank charges a flat fee of $1,500 to each of buyer and seller.

Buyers can either manage the purchase process on their own or engage a Company Specialist (a registered broker who is an expert on a particular company) to do it for them. Buyers that manage the process on their own follow the step by process begun by clicking on the “Post to Buy” button on the relevant Sharespost company bulletin board page. This process results in the Buyer posting their desired terms. Buyers can also choose to click “Agree to Buy” next to a Seller’s post that contains terms acceptable to them.

Buyers that choose to have a Company Specialist find their Seller(s) for them gain the benefit of expert advice and a high level of personalized service. A Company Specialist will handle the posting of the Buyer’s contract and reaching out to potential Sellers both on and off the SharesPost system. If a transaction closes, the Company Specialist receives a sales commission from you.

For more information on this subject, see our SharesPost for Buyers page.

Visit our Private Placements page to see all the offerings currently available to you on SharesPost. Securities laws as well as the company’s instructions generally require that we confirm members meet certain financial and sophistication qualifications prior to showing them any private placement materials. Accordingly, members who have yet to complete their SharesPost profile must do so before viewing such materials. In addition, an affiliated broker-dealer assists us with the qualification process by verifying the profiles. Once qualified on the system for private placements, members can sort through different offerings by industry sector, placement manager, size of offering, etc. They can also receive emailed notifications as new private placements are posted to the site.

In some situations, U.S. securities laws require that both parties to a brokered transaction of private securities must meet certain financial and/or sophistication standards. Accordingly, a broker must in some circumstances reach out to buyer and seller to help make sure that the contemplated transaction is compliant with applicable law. We believe that SharesPost’s and our affiliated brokers’ efforts in this regard benefit all parties to a transaction.

SharesPost has teamed up with multiple brokers, each of whom is registered with FINRA and specializes in private equity transactions, in companies like those listed on SharesPost. In addition to the SharesPost community, our brokers are able to access their own client base of potential buyers and sellers.

At SharesPost, you or the Company Specialist posts your desired terms for the purchase of private company shares to our bulletin boards. If a Seller likes your terms, they click “Agree to Sell” next to your post and SharesPost starts the parties on the road to a completed transaction. Third party service providers like EchoSign and U.S. Bank work with the parties to close the transaction.

Alternatively, if you see acceptable terms in a contract posted by a Seller, just click “Agree to Buy” next to that post and follow the simple step-by-step instructions presented.

Finally, if you choose to have a Company Specialist help you acquire your desired shares, they will manage this process for you after conferring with you.

Go to our Overview page, Legal Considerations, and Escrow pages to learn more.

All buyers must be “accredited investors” as that is defined under the Securities Act of 1933, as amended, and must be registered members of SharesPost with their own SharesPost account and password. All sellers must have held their shares for at least one year.

Go to our Referrals page to find an attorney or other expert.

Go to the applicable Company page and review the posts under “Seller Posts”. If you see terms you want to contract on, just click “Agree to Buy” next to that post. You will then be presented with the simple instructions for the next steps.

Go to our Overview page and Escrow pages to learn more.

Go the Add a Company page to nominate a company for inclusion in SharesPost. We will ask you a few questions about the proposed company and your interest in transacting in its shares. Normally, we are able to get back to you with a decision in just a couple of days.

Generally companies on SharesPost must be backed by a known venture capital firm and have closed a financing with a valuation of $100 million or more and have been in business for 5 or more years.

You can cancel your Post to Buy at anytime prior to both you and your Seller electronically signing the Stock Purchase Agreement on the EchoSign site. Just go to your My SharesPost account where you can manage all your posts and contracts.

Though each participant in a SharesPost facilitated contract is solely responsible for making their own legal determination about the availability of an exemption from the securities laws, we believe we have constructed the SharesPost process such that Buyer and Seller can generally make use of a Section 4(1) exemption, and in some cases, Rule 144. Supporting such an exemption is the fact that only SharesPost members with a password protected account are able to participate in postings, only accredited investors can be SharesPost Buyers, and only sellers holding their shares for at least a year can be Sellers.

In addition, SharesPost has teamed up with certain registered broker dealers to provide certain services to the SharesPost community, including the qualification of members to access certain investment opportunities. Go to our Legal Considerations page to learn more.

Go to our Referrals page to find an attorney or other expert.

We keep the identity of those who “Post to Sell” confidential from everyone except of course those they are about to enter into a contract with. You can, however, click the 'Email' button next to a Seller’s post and we will email your message to the Seller. You can ask to know who they are. Then it’s up to the Seller whether to reveal their identity.

Prior to executing a contract, you can download and review it. We recommend you review it with an attorney or other advisor(s) before signing it. Also, you can review all the SharesPost forms of contract anytime by going to the Contracts page in the Legal section of the SharesPost site.

Sellers are required to upload any documents that contain restrictions on the transfer of their shares. These documents are then attached to the contract for the sale of these shares. You can review this contract and the attached documents containing the restrictions prior to executing it.

Before you are required to wire the Purchase Price, the Seller must deliver copies of their stock certificates to escrow or the documents by which the Seller acquired the stock certificates. And, of course, no money is to be released from escrow to the Seller until the Escrow Company has in hand a certificate in your name representing the shares you have purchased.

Buyers wire their funds into escrow only after the Seller has delivered a copy of their stock certificate or other evidence of ownership of the shares subject to the contract.

This depends primarily on the complexity of the restrictions attached to your shares and the company’s speed in processing the transaction. To address the concern that a transaction is taking to long to close, the SharesPost agreements provide that, under certain conditions, either party may elect to terminate the contract and escrow if the transaction does not close within a specified time limit.

SharesPost enables Buyers to post to buy either common or preferred stock. The Buyer identifies which class and series of shares they are looking to acquire during the post to buy process. Similarly, Sellers must identify the class and series of their shares during the post to sell or agree to sell processes.

Only you can determine a fair price for a particular stock. SharesPost is not an investment advisor and presents no investment advice of any kind to Buyers or Sellers. Information posted on the site is aggregated from third party sources and submitted by visitors to the site. SharesPost makes no effort to confirm the accuracy or completeness of any of this information.

Go to our Legal Considerations page to learn more.

SharesPost is only a passive bulletin board that enables users to post documents concerning the sale of private company shares. Buyers and Sellers are solely responsible for protecting their own interests. SharesPost bears no responsibility for or liability in connection with transaction between Buyers and Sellers who find each other on the SharesPost bulletin boards.

Go to our Legal Considerations page to learn more.

SharesPost recommends you always consult an attorney and/or other relevant experts prior to entering into any legal agreement. SharesPost allows you to review all contracts prior to executing them and recommends that you do so with your attorney.

There are two primary reasons for companies to support a SharesPost bulletin board. First, by opting in to the SharesPost platform, companies offer their shareholders the benefit of liquidity but on the company’s terms. The company is able to control who buys and who sells and on what terms. These controls allow the company to avoid the problems associated with secondary sales sometimes pose to private companies. (Learn more about the benefits of a Controlled, Customized Secondary Market.)

Second, by becoming part of the SharesPost community, companies become eligible to raise primary capital from that community. With the assistance of their investment bank or other financial advisor, SharesPost listed companies can access just those SharesPost members they deem attractive investors. So for example, a company might use the SharePost platform to efficiently reach out to just Qualified Institutional Buyers with long term holding periods and a focus on their industry sector. Another company might use SharesPost to instantly connect with thousands of accredited investors. SharesPost greatly facilitates private placements under Regulation D by providing a securities laws compliant platform and automating the contract and closing mechanics. (Learn more about the benefits of our Private Placements Marketplace.)

In addition to these two reasons, companies recognize that secondary sales are going to happen regardless of SharesPost—SharesPost just makes the process much more efficient for buyers, sellers and the company by standardizing contracts and creating a single online location from which multiple transactions can be tracked. And by giving founders, executives and early investors interim liquidity, companies often find that the organization can unite in a focus on long term value creation and forego short term but sub-optimal exits. Finally, the people and funds who are looking to monetize their shares are the ones that helped build the company. Not standing in the way of their obtaining a fair price for their shares seems like the right decision to most companies.

Companies that have bulletin boards on SharesPost can use our platform to help conduct their private placements under Regulation D. (If SharesPost currently doesn’t have a bulletin board, you can ask that we create one by going to our Add a Company page.) Private placements on SharesPost must be managed by one of our selected investment banks or financial advisors. The bank or financial advisor uses SharesPost to significantly increase the size, predictability, speed and ease of marketing and closing private placements for their clients. If you would like us to connect you with an investment bank or financial advisor, please Contact Us and we will be happy to refer you.

For more information, visit our Private Placements page.

Companies that join the SharesPost community can set a cap on the price per share for common stock posts on their SharesPost bulletin board at whatever the company has most recently determined to be the fair market value of their common stock. As a result, no transaction initiated on SharesPost would have a price per share in excess of the company’s most recent option grant strike prices. This means that transactions initiated on SharesPost do not generally present tax or accounting problems for companies availing themselves of this option.

Companies joining the SharesPost community have two ways to address this problem. First, they could elect to limit the buyers on their SharesPost bulletin board to those that are already shareholders. Alternatively, they could require that any shareholder that sells must sell all of their shares. In either case, no transaction on SharesPost results in a net addition to the number of shareholders.

Companies opting in to the SharesPost platform can impose limits on the percentage of their holding that each kind of shareholder can sell on SharesPost in each 12 month period. This means that participating companies can elect to have current employees restricted to selling just 15% of their company shares in any given year on SharesPost. Employees benefit by having a company supported place to get a little bit of liquidity and companies have an easy way to put reasonable limits on the degree of employee divesture.

SharesPost enables companies that join the community to specify which SharesPost members are authorized to act as buyers on their bulletin boards. This can be done either by classification (e.g., only institutional buyers) or by individual (e.g., XYZ investor may not be a buyer). These filters allow companies to create precisely the network of buyers and sellers they want for their shares on SharesPost.

Companies that opt in to the SharesPost platform are able to “freeze” secondary transactions on the SharesPost bulletin board in advance of conducting a private placement or initial public offering. This means that prices revealed in connection with secondary transactions are never in conflict with the company’s own fund raising efforts. Even better, qualifying SharesPost members that come to the company’s bulletin board interested in acquiring shares in a secondary transaction can, at the company’s election, be directed to the company’s financial advisor as a potential investor in the company’s private placement.

Though each participant in a SharesPost facilitated contract is solely responsible for making their own legal determination about the availability of an exemption from the securities laws, we believe we have constructed the SharesPost process such that Buyer and Seller can generally make use of a Section 4(1) exemption, and in some cases, Rule 144. Supporting such an exemption is the fact that only SharesPost members with a password protected account are able to participate in postings, only accredited investors can be SharesPost Buyers, and only sellers holding their shares for at least a year can be Sellers.

In addition, SharesPost has teamed up with certain registered broker dealers to provide certain services to the SharesPost community, including the qualification of members to access certain investment opportunities.

Go to our Legal Considerations page to learn more.

The SharesPost bulletin boards were designed to meet the criteria for a “passive bulletin board” within the meaning established by the SEC in certain No-Action letters. Passive bulletin boards are not required to register with the SEC as an exchange and are not required to be broker dealers. Accordingly, SharesPost has not registered with the SEC as either an exchange or a broker dealer at this time.

In addition, SharesPost has teamed up with certain registered broker dealers to provide certain services to the SharesPost community, including the qualification of members to access certain investment opportunities.

Go to our Legal Considerations page to learn more.

Go to our Referrals page to find an attorney or other expert.