Secondary Markets Explained: How EquityZen Provides Liquidity for Pre-IPO Shares | Startup Project Podcast #94

Join Nataraj on Startup Project as he talks to Aatish, CEO and founder of EquityZen, a secondary market for private equities. They discuss the evolution of secondary markets, EquityZen's business model, the value proposition of secondary equity platforms, investor strategies, and the nuances of investing in secondary shares. They'll also delve into various IPO types and their pros and cons for investors, providing a glimpse into the future of secondary markets and IPOs by 2025.

About the Episode:

This episode explores how EquityZen created a market for secondary shares, connecting founders, employees, and early investors with individuals seeking pre-IPO investment opportunities. Aatish shares his personal journey from quant hedge fund employee to entrepreneur, highlighting how EquityZen helps late-stage private companies provide liquidity to shareholders.

The conversation also covers:

- Evolution of secondary markets

- EquityZen's business model and platform

- Investing in secondary shares

- Different investor strategies

- IPO types and their impact on investors

- The future of secondary markets and IPOs in 2025

About the Guest and Host:

Aatish: CEO and founder of EquityZen, former co-founder and CTO of Nullsoft, and VP of product at Ampush.  Connect with Aatish:

→ LinkedIn: https://www.linkedin.com/in/atishdavda/

→ Website: https://equityzen.com/

Nataraj: Host of the Startup Project podcast, Senior PM at Azure & Investor. 

→ LinkedIn:  https://www.linkedin.com/in/natarajsindam 

→ Twitter: https://x.com/natarajsindam

→ Email: ⁠https://startupproject.substack.com/⁠

→ Website: ⁠⁠⁠https://thestartupproject.io⁠⁠⁠

Timestamps:

• 00:00 - Introduction

• 01:10 - What is EquityZen and How Did It Start?

• 04:19 - The Evolution of Secondary Markets

• 09:00 - Standardization in Secondary Transactions

• 14:44 - Portfolio vs. Individual Company Investments

• 20:10 - EquityZen's Business Model: Fees & Carry

• 22:21 - EquityZen's Stats and User Base

• 24:34 - EquityZen's Relationship with Companies and Issuers

• 27:17 - Rights of First Refusal and Blocking Rights

• 30:36 - Navigating the Secondary Market: Legitimacy and Risk

• 33:33 - How EquityZen Uses Data

• 37:14 - Marketing EquityZen in a Regulated Industry

• 40:19 - IPOs vs. Direct Listings: What's the Difference?

• 44:04 - Outlook for IPOs and Secondary Markets in 2025

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