EquityZen Raises $6.5 Million Led by Draper Associates to Expand Pre-IPO Marketplace
NEW YORK, July 18, 2017 /PRNewswire/ -- EquityZen Inc., a New York-based FinTech firm that operates a secondary marketplace for company-approved transactions in pre-IPO stock, today announced the closing of a new financing round led by Draper Associates, bringing the company's outside financing to $6.5 million. Their platform has closed over 2,000 company-approved investments in more than 70 large, private firms with low investment minimums. Tim Draper, the legendary venture capitalist who was an early investor in Hotmail, Skype, and Tesla, runs Draper Associates. In addition, he has invested billions across more than 30 countries, including through Draper Fisher Jurvetson and the Draper Venture Network. Among other returning investors is WorldQuant Ventures, backed by the eponymous asset management fund.
"The Draper family nearly invented modern venture capital," said Atish Davda, EquityZen's Chief Executive Officer. "We are excited to partner with them as we expand investment access to tens of thousands more qualified investors who are tired of sitting on the sidelines watching a small number of Silicon Valley insiders profit from the private returns. EquityZen's secure and transparent online investment platform helps private investors diversify their portfolios with blue-chip private companies, not just early stage startups."
Launched in 2013, EquityZen is democratizing access on both sides of the market, always working with the company in which the transactions occur. This latest financing deal comes as private investor interest has picked up in so-called "Unicorn" companies, or private firms valued at $1 billion or more. Technology companies have increasingly deferred initial public offerings (IPO), electing to raise sizable amounts of capital from private markets at high valuations.
"Core to our mission is the belief that to foster robust, liquid secondary markets, you need the buy-in of the company whose shares are being transacted," said Shriram Bhashyam, EquityZen's Co-Founder and Head of Shareholder Relations. "This influences every aspect of how we've built the business and is proven by the 70+ companies we've successfully helped address liquidity needs."
"EquityZen brings private markets to the public," said Phil Haslett, EquityZen's Co-Founder and Head of Investments. "Our platform serves over 15,000 qualified investors from more than 30 countries, spanning high-net-worth-individuals (HNWI), wealth advisors, and institutional money managers. We have successfully completed transactions in more than one-third of the largest 50 unicorns in the US, including AppDynamics, which was purchased by Cisco Systems just prior to its planned IPO."
"The IPO market is no longer feasible," said Tim Draper, Managing Partner of Draper Associates. "Why would any company want to throw away $5 million per year to comply with all those regulations? Or subject themselves to the scrutiny of an increasingly litigious public shareholder base that usually includes a class action lawyer trawler? The private markets are opening up and EquityZen is a great solution to bring liquidity to private companies that want to keep growing without being saddled with the overregulation and fear that comes with being a public company."
"Historically, these high-growth, private companies have been out of reach unless you can write a $20M check. We are making it available to qualified folks for as little as $20,000," says Mr. Davda. "The fresh capital from the Drapers will help us bridge this gap even faster."
About EquityZen EquityZen Inc. (equityzen.com) is a rapidly-growing marketplace for making investments in late-stage private technology companies. EquityZen provides accredited investors, wealth advisors, and institutional money managers access to private markets.
With over 2,000 private placements completed in 70+ premier private companies, EquityZen is building private markets for the public. Investors in the company include behemoths from Silicon Valley and Wall Street, like Draper Associates and WorldQuant Ventures. Press kit available here.
About Draper Associates Draper Associates, founded in 1985, is a premier early-stage venture capital firm that encourages entrepreneurs to drive their businesses to greatness, to transform industries with new technologies, and to build platforms for extraordinary growth, jobs, and wealth creation.
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