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Building a stock market for startup shares

March 24, 2018

 

Earlier this week, I had lunch with a Business Angel friend (Hi Doug ;D) who told me he and his Angels friends worst nightmare was not that their startups go bust (this happens routinely). It was funding “lifestyle business” people, i.e. entrepreneurs who will grow a business up to the point that it pays for their bill, and … stay there, living happily ever after.

The Angel : What?! No exponential growth ? no Serie A, no IPO?! 
The Entrepreneur : Errr why?! I can almost run the business on autopilot, take long holidays with the kids, travel the world. Why worry more?!
The Angel : But, but,... and my money?!

And indeed, no “liquidity event” means no “exit” for the Angel. So Doug and I started musing about a stock market for illiquid assets, like startup equity. 

Think about it for a minute : In the UK alone, there are ~20k Business Angels, investing 1.5B£ annually. Startup equity is highly illiquid, meaning you can only value it and sell it at a “liquidity event” (e.g. a new round of funding, an IPO/ICO or a trade sale). Why not creating a marketplace to buy/sell it?!

If that sounds like someone you'd fancy exploring, hit reply and lets form a small team to look at it! 


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