Now There are ways to buy shares of social network companies such as Facebook, Twitter, Groupon, LinkedIn, Zynga, etc. Two Web sites SharesPost.com and SecondMarket.com, which is also a registered brokerage, provide electronic platforms that allow qualified investors to buy shares from company insiders and employees who want to cash out before a company goes public.
SharesPost.com– The SharesPost Venture-Backed Private Company Index is a modified market capitalization weighted index—the maximum percentage value of the index any company represents is 25%. The index value inputs for each company are an average of the four data inputs broken out above. Where data is unavailable or out of date (i.e., more than 120 days old), that input is omitted from the calculation and only the remaining inputs are used. So for example, where a company has not recently closed a venture financing, only the recent transactions, current posts and research report estimates are used as inputs into the SharesPost Index Value formula. SharesPost updates the Index Values on a weekly basis.
SharesPost helps you buy shares in the leading pre-IPO technology companies. First, visit the company bulletin board page to view research reports, posts to buy and sell, past transaction prices, financing histories and more. When you’re ready to buy, we can either connect you with the Transaction Specialist or you can manage the transaction yourself.
1) Agree to a Post to Sell Shares- On the company bulletin board whose shares you want to buy, you will find all available Posts to Sell for that company. Find the Post to Sell that best meets your requirements. Click the “Agree to Buy” link next to that post and confirm the terms of the purchase. When you click Confirm at the end of the second page, the Seller is notified you have agreed to the terms of the sale. Only members qualified by a broker-dealer as an Accredited Investor can act as buyers.
2) Post to Buy Shares — On the company bulletin board whose shares you want to buy, click “Post to Buy Shares”. SharesPost presents you with a simple one-page form for you to state the terms on which you would purchase shares and other relevant information. When you click Submit at the end of this page, your post goes live on the company’s bulletin board. Only members qualified by a broker-dealer as an Accredited Investor can act as buyers.
SecondMarket.com – Founded in 2004 and with offices in New York and Palo Alto, SecondMarket is a registered broker-dealer and THE secondary market for illiquid, restricted and alternative investments. Over 30,000 participants have signed up to transact through our online platform and teams of market specialists. SecondMarket has completed thousands of transactions, representing billions of dollars in assets.
SecondMarket offers investors a unique opportunity to capitalize on the dislocation in today’s financial markets. Many new asset classes are gaining momentum (bankruptcy claims, private company stock), while others are buy-and-hold investments that sellers must divest now for liquidity reasons (auction-rate securities, CDOs, limited partnership interests, MBSs).
Through SecondMarket, you can gain access to a wide variety of useful data and analytics. Much of this information is available to you at no charge while other portions are available through the SecondMarket Ecosystem, a gathering of product and service providers for all of our markets.