| You've got some misinformation here, this was my experience two years ago but on the seller side as an employee leaving a startup. >"you could attribute the entire 34% "discount" to the fact that these are common shares, not preferred." I sold common shares via the secondary market and I got exactly what they were valued at. This was a very well-known startup. So that's incorrect. In fact I managed to get just north of that price given the scarcity of obtaining them. > "You don't actually own common stock of the company (e.g. Palantir). It actually works like a mutual fund." This is something specific to just EquityZen and this is a technique that is used in instances where the company's employee option agreements forbids such a sale. This is a loophole of sorts used only in those instances. One other interesting point is that once I had a buyer lined up the company exercised their right of first refusal which means they then had to buy the shares for the same amount as the buyer agreed to purchase them from me for. The company themselves of course didn't actually buy them but they put me in touch with a well-known Hollywood celebrity's wealth manager who then bought them. This last point irked me a bit when I thought about all the other engineers toiling away to build a good product who were bound by all these options restrictions yet some Hollywood celebrity with no connection to the company was on a shortlist of preferred buyers should some options come available. Sigh. |
It could be that in your case they were valued the same. You actually mention that you sold at above the company's last fundraising valuation - it could be the case that the preferred stock was valued even higher.