EquityZen is an online marketplace where employees and other shareholders of private companies can sell. Accredited investors can gain exposure to private companies through an EquityZen-managed investment fund (Delaware LLC).
0 - 1,000%
Asset Class Return•1Y
The marketplace for pre-IPO equity. Invest in or sell shares of private companies via EquityZen Funds. EquityZen helps shareholders sell their equity for cash, with company approval, even while the company is still private. EquityZen believes employees and investors deserve the right to realize the value they have helped create. Until recently, access to pre-IPO companies has been limited. By leveraging technology and market expertise, their platform provides accredited investors access to pre-IPO, late stage technology investments at reasonable minimums via their investment funds.
Things to Know
You make money on
Term of investment
Diversified exposure to pre-IPO companies
Proprietary analysis including recent price history, valuation & cap tables
Source shares from early employees and investors looking for liquidity
See inside MoneyMade’s 6-figure multi-asset portfolio
How you make money
Accredited investors will own an interest in an LLC, which owns the underlying shares of a private company. If the company gets acquired or goes public, EquityZen will distribute shares or cash proceeds to you. Not all private companies will get acquired or IPO, and not all IPOs or acquisitions will result in successful investments.
How EquityZen makes money
EquityZen typically charges a one-time fee when you invest, from 5% of the invested amount (which is charged on top of the investment amount, so for example if you were to invest $50,000, you would end up transferring $52,500 to EquityZen).
Is it safe?
Investment opportunities posted on this website are "private placements" of securities that are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Investing in private companies may be considered highly speculative and involves a high degree of risk, including the risk of substantial loss of investment. Investors must be able to afford the loss of their entire investment.
How You’re Taxed
Profits earned from investing in startups are taxed like stocks. Investors are subject to short-term capital gains when selling investments held for less than a year, which are taxed at ordinary income tax rates. Long-term capital gains are applicable when investments are held for a year or more with tax rates ranging from 0% to 20%, depending on your total taxable income.
Leader in the space with access to more and larger deals than most individuals would find, but their distribution mechanism has glitches and can wipe out investment returns entirely.
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