NASDAQ OMX Group, Inc. in partnership with SharesPost, Inc. has opened a marketplace for private companies. This aims at providing the tools and resources to efficiently raise capital, control secondary transactions, and manage their equity-related functions. All investors will be accredited by NASDAQ Private Market Member Broker-Dealers. In addition, to ensure investors have appropriate financial information, a member company will have to agree to make certain limited disclosures to those that transact in its shares.
Member Companies on NASDAQ Private Market will have the ability to connect with its global network of registered broker-dealers representing qualified institutional buyers as well as family offices and other accredited investors. Also, companies can use the platform to manage liquidity programs for employees and other shareholders.
As per the guidelines, to become a member, the company must meet one of the following criteria:
– Funding received of USD 30 million within last 2 years and an Enterprise value of USD 50 million respectively
– Total assets and annual revenues of USD 50 million in In the latest fiscal year, or in two of the last three fiscal years
– Shareholders Equity of $5mm and two year operating history
– Sponsored by a qualified entity which has invested in at least three private equity investments over the prior two years or has at least $50 million under management, and has a significant investment in the company.
As believed by Bruce Aust, the marketplace will give entrepreneurs more flexibility in deciding if and when to go public. Bruce is Executive Vice President at NASDAQ OMX and Chairman of the NASDAQ Private Market Board. “By obtaining interim liquidity relief, companies can choose to enter the public markets based on the needs of their business and with the proper corporate solutions and institutional investor relationships in place for a seamless transition,” he added.
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