[drglitch]

Who would control the listing of a company’s shares? A startup can choose to simply not make itself available. Similarly, most employees overlook things like right of first refusal that their parent cos have over their shares.

This is an awesome development, if it can also be used to push for more standard, employee-friendly shareholder agreement terms.

[vmception]

I’ve seen that circumvented with trusts, where the trustee is swapped or trustees are added prorata but the trust stays on the cap table

Or in cases where the employee cant change the shareholder to the trust, a trust is formed for doing an escrow transaction of the cash behind the scenes.

[jakelazaroff]

Correct me if I’m wrong, but right of first refusal doesn’t mean your employer gets to block a transfer of equity outright. It only means that you have to make the same offer to them before you make it to another buyer. If your employee declines the offer, the other buyer is free to accept it.

[mlyle]

Yah. So, if you're looking to buy something protected by a RoFR, you get to make an offer... And, then you wait a few weeks to see if another party thinks it's worth more than that and takes it instead.

In practice it pushes down both liquidity and price.

It becomes this strange meta-game of having to guess what the likelihood of whether you're buying something. And, you lose out on any materially positive change that manifests in that time window. Indeed, the decision can be made even on the basis of insider information...

[drglitch]

That’s exactly right, but doing so makes the process much more illiquid.