General
- What is private shares trading?
- Private shares trading refers to the buying and selling of shares in privately held companies, as opposed to publicly traded companies. These shares are not available on traditional stock exchanges and change hands only through arm’s length private transactions. William Blair’s Private Shares Trading team facilitates transactions in privately held securities, with a focus on shares of venture-backed companies.
- Who are the market participants in private shares trading?
- William Blair’s Private Shares Trading team represents both buyers and sellers. The team handles pricing negotiation between parties and works with the company to facilitate approval, clearance, and ownership transfer. Sellers tend to be company shareholders, including employees, former employees, seed investors, and early-stage VC funds. Buyers are often family offices, VC funds, secondary funds, and crossover funds that are looking to add to an existing position or build new positions.
- Why should investors interested in private shares trading work with William Blair?
- William Blair Private Shares Trading offers a one-stop resource for both buyers and sellers of private shares, drawing on the depth and breadth of our comprehensive, award-winning research platform (both public and private companies). Our hand-picked team boasts deep industry relationships, having worked with hundreds of both buy side and sell side of secondaries participants at prior firms. We apply the highest standard of care to secondary trading, where discretion and transactional knowledge are paramount in this tightly held and illiquid market.
- What is driving the interest in private shares trading?
- Several factors are driving the growing interest in private shares trading. These include a decrease in primary fundraising and secondary activity as shareholders reassess pricing expectations following years of strong venture capital raises. In addition, rising costs of carrying private equity are putting liquidity pressure on some holders of venture-backed company stock, while internal valuations contract across the space. These factors, coupled with a marked decrease in primary market activity, have created a unique environment for investors looking to deploy the vast amounts of dry powder that some funds have been sitting on for over a year.
- What is the typical time frame for your PST transactions?
- Each private transaction is unique with respect to timeline, process, and requirements. Generally, a private transaction will take 45-60 days from the time from buyer/seller verbal agreement to closing. For many transactions, the right of first refusal period will last at least 30 days. In other instances, the right of first refusal may be waived sooner, or it may not be applicable at all as restrictions governing privately held stock differ from company to company (and often between equity plans in the same company). The Private Shares Trading team leverages years of experience and intimate knowledge of transaction restrictions to provide insight into timelines and requirements to closing on a case-by-case basis.
- Can William Blair offer private shares trading services in any venture-backed segment?
- Private shares trading is a generalist capability that has expertise across many sectors. However, certain sectors are more active than others based on availability of shares. Companies in certain sectors are more likely to compensate employees with incentive stock option plans, increasing availability of inventory, which in turn creates a more active secondary market. Some sectors tend to have more restrictions on their equity plans and capital tables, which can inhibit secondary trading.
- How does private shares trading work with your advisory (aka IB) division?
- William Blair clients have come to expect top-tier service from all divisions of the firm. While regulatory and compliance walls restrict private shares trading from interacting with certain parts of the bank, clients should expect the same level of professionalism across the firm. We provide a unique solution otherwise not addressed by many other traditional IB services.