Finding Liquidity for Secondary Shares of VC-Backed Companies

Marion Street Capital helped several shareholders of Series C to pre-IPO venture-backed companies realize the value of their shares on the secondary market.

MSC helped a former employee of a Series C stage HealthTech company sell his shares to an institutional buyer at 2.7X MOIC in a weak liquidity environment by identifying strategic targets, conducting outreach, and negotiating terms.

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MSC helped three former employees of a Pre-IPO B2B SaaS company sell their shares via two separate transactions totaling $1MM+ in market value by identifying strategic targets, conducting outreach, and negotiating terms.

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The Challenge

Shareholders of venture-backed startups often approach MSC with several challenges:

  • Privately held securities offer less liquidity versus publicly traded securities, so a transaction is taking longer than expected to occur.

  • Financial data is not usually available for private companies, and companies are not usually willing to provide it to potential buyers.

  • Expertise is required to know which institutional buyers have dry powder and which are familiar with the industry and/or the company.

  • The seller does not understand the value of his shares relative to prior funding rounds.

  • A deadline is approaching for the seller to exercise his options (NSO/RSO), and the cost to exercise might exceed the value he might receive on the secondary market.

Solving the Challenge

To execute these engagements, MSC helps startup shareholders with:

  • Target Buyer Identification (Institutional, Individual, Family Office, Marketplace)

  • Share Valuation Analysis

  • Target Buyer Outreach & CRM

  • LOI Negotiation & Review

What is the probability that MSC can find a buyer for your startup equity? Our Propensity-to-Sell (“PTS”) model helps evaluate your chances of success.