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Don’t most private companies require board approval for secondaries? I wonder what you’d actually be buying here.
Don’t most private companies require board approval for secondaries? I wonder what you’d actually be buying here.
Don’t most private companies require board approval for secondaries? I wonder what you’d actually be buying here.
It depends on the shareholder agreement, but many do. However, many of these secondary markets facilitate private market transactions via a forward contract which is sort of like long dated put option.
I’m having some trouble conceptualizing the notion where there’s a secondary market buyer of private company who’s obliged to transact at a given price, but might go higher. Is the idea that a secondary market buyer struck a deal with Carta’s capital markets division that if Carta can locate shares of XYZ startup, then the buyer agrees to buy those shares at $x, but may pay the investor more if (for example) a higher…
Presumably the price they go in with is so low that it’s a no brainer and being contractually bound is functionally zero risk.
Can someone explain this in simple language?
This requires a high level of trust as there is a lot of financial information at stake.
Carta seems to be taking this confidential information and is potentially sharing it with other investors and soliciting investors to sell their shares.
This is a big no-no.
Don’t most private companies require board approval for secondaries? I wonder what you’d actually be buying here.
How close is this to insider trading? I'm not an expert by any means.
Not close because it does not involve a public company. Still seems shady.
for different reasons Carta's solicitation doesn't necessarily trigger that, by mere nature of contacting people
Earlier quoted context omitted.
It depends on the shareholder agreement, but many do. However, many of these secondary markets facilitate private market transactions via a forward contract which is sort of like long dated put option.
Ah, interesting. I think this might answer a question I posted elsewhere in the thread.