- Private Stock Seller
Is there a limit on the range of securities offered for sale through the site?
PrivatEquity's arena enables private corporation security to be offered for sale, including stocks, options, participating units etc.
What commission does PrivatEquity charge for conducting the transaction via the site?
What responsibility does PrivatEquity have regarding the transactions?
PrivatEquity does not take any role in the transactions. It does not examine the profitability of the transaction, nor does it examine the reliability of the information reported by any of the parties involved in the transaction. PrivatEquity does not provide consultation of any kind to any of the transaction's parties and is in no way responsible for any transaction conducted via publication through the site.
Is the purchasing of a private company’s securities considered a solid, risk-free transaction?
Securities purchasing is an investment that involves risks and is not considered a solid investment. Securities purchasing requires the examination of the many aspects of the investment and the purchase, including economic, accounting, legal and tax liability issues, etc. Therefore, those interested in purchasing securities should carefully consider, with the assistance of professional consultants on their behalf, all aspects of the purchase, including their own economic status, the volume of their assets, their earning ability, etc. While taking all of the aforementioned into account, they should consider their (and their family’s) ability to sustain any failure of the investment without it seriously affecting their own (and their family’s) lifestyle.
In addition, purchasing a private company's securities has specific characteristics that harbor unique risks. For example, the volume, quality, and reliability of the information provided by private companies prior to the purchase of their securities and its accessibility to the potential investor are not subject to the rules pertaining to information published by public companies and may not be of the same standard. The amount of information is less; the company is not required to verify the information and its reliability is difficult to prove; the tradability of a private company's securities is significantly lower than that of the securities of a public company; a private company's management is not monitored or supervised by the Securities Authority, and other issues that should be taken into consideration prior to acquiring private companies securities.
How will I know which limitations apply to the securities that I wish to buy or sell?
Unlike public company securities transfers, there are always limitations on the transfer of a private company's securities. For example, the private company's Board of Directors is required to approve the transfer of securities; the other securities' owners must waive their rights to purchase the securities, etc. Other limitations on the transfer of securities may be collateral, a lien or a sequestration of the securities, an agreed obligation of the securities' owners not to transfer their securities, etc. When a party becomes obligated to a securities sale agreement, contract law obliges him to disclose, as part of the agreement, all the essential details relevant to the securities, including all the limitations that apply to the transfer of the securities. In addition, the security buyer must take the security seller's statements with caution and is obliged to conduct all the research necessary in such transactions, with the assistance of professionals and consultants on his behalf, in order to ensure his awareness of all the limitations on the transfer of the securities, whether these limitations may be alleviated and whether the securities may be transferred to his ownership.
It is hereby emphasized that PrivatEquity's administrators do not conduct any verifications regarding the possibility of transferring securities and the limitations which may apply to such transactions, and that it is the sole responsibility of the parties' to carry out such verifications.
When does the transaction become binding?
In principal, the transaction becomes binding only after the agreement for the purchase or sale of the securities has been signed. Please note that Israeli contract law regards withdrawal from negotiation in bad faith as a civil wrong.
What sort of agreement should be signed in order to buy or sell securities?
In order to perform a securities transfer transaction, the parties should sign an agreement which provides an accurate description of the securities offered for sale, the seller's statements regarding the rights he holds over the securities, the seller's statements regarding the limitations which apply to the transfer of the securities, the price and the terms of payment, the conditions which must be met in order to have the compensation for the securities transferred to the seller (including the exact phrasing of the documents and the confirmations which the seller must provide to the buyer, testifying to the transfer of the securities from the seller to the buyer), a timetable for the completion of the transaction, etc. PrivatEquity recommends that you consult with a professional on your behalf (a lawyer or any other consultant) that will assist you in carrying out all the necessary inspections and reviewing all of the documents and agreements regarding the specific transaction you wish to conduct.
The only requirement PrivatEquity makes regarding the text of the agreement is that it should include clear instructions to the trustee regarding the transfer of the payment to the seller and to PrivatEquity. The trustee should approve the text of the agreement before conducting the transaction.
How long should I wait for the conclusion of the transaction?
You may reach an agreement with the securities buyer/seller at any time and according to the timetable and rate of progress agreed upon by both parties. The time to conclude a transaction varies and depends on multiple ad-hoc factors.
Can the site’s team assist me in buying or selling securities?
The site's team is at your service for explanations, on how the process works, for connecting you with professional consultants (with whom you will form an independent agreement, should you so wish), and so forth. You are welcome to contact us.
What tax issues are involved in the transaction?
Securities purchasing or selling transactions involve tax obligations (including reporting obligations) for both the buyer and the seller. For example, employees wishing to sell stocks or options that were granted to them as part of an options' plan are subject to special taxation. We recommend that you consult an accountant or a tax consultant regarding these issues, including the requirement to report the transaction to the tax authorities or to a trustee on behalf of the tax authorities. Where required by law, PrivatEquity will report the transactions (including the identities of the parties, the transaction details, etc.) to the tax authorities and to any other relevant authority.
Is it necessary to consult a lawyer?
We highly recommend that your securities purchasing or selling transaction be overseen by a lawyer or by any other relevant consultant on your behalf. PrivatEquity does not provide consultancy services of any kind to any of the parties, and does not produce any kind of documentation required to complete the transaction.
Is a securities’ seller required to sell all the securities held by him?
A securities seller may decide whether to sell all of his securities or only some of them in any transaction. In addition, a securities seller may sell his securities to a number of buyers, as agreed between him and any buyer(s). At the same time, in order to preserve propriety of the securities-selling process, PrivatEquity will not allow a securities seller to publish simultaneously on the site two different sales offers for the same securities.
When will I know the identity of the securities seller or buyer?
The buyer's identity will be revealed to the seller (and vice versa) only when both parties have expressed their explicit consent to have their identity revealed.
How can a securities seller be assured that the securities buyer is truly able and intends to perform a securities purchasing transaction?
A precondition of the submission of the buyer's offer is the depositing of the price of the purchase plus 2.5% commission with the trustee and releasing it to the seller at the completion of the transaction.
How will I know that I am offering the right price for the securities?
The price of a private company’s securities is determined through negotiation between the parties, unlike public company securities whose market price is determined by the accepted trading mechanisms. In order to estimate the price of the securities, one needs to carefully examine the company whose securities are up for sale, the relevant market (including the risks which are typical of that market), the quality of its management, the uniqueness of the products and services it offers, the volume of its activity and so forth. Based on all these, one should attempt to evaluate the securities’ worth. This is not a simple procedure, especially since private companies usually do not publish their business information and their performance data.
Please be aware that PrivatEquity is not an investment consultancy firm and does not have the tools and ability to evaluate the worth of the securities that are offered for sale through its site.
PrivatEquity makes every effort to publish information regarding the companies whose securities are offered for sale (links to the companies' internet sites, links to press releases, links to market surveys, etc.). PrivatEquity cannot and does not wish to examine the accuracy and completeness of this information. Therefore, you should examine carefully and independently the company information and its relevance to determining the value of the securities, with the assistance of professionals and consultants on your behalf, in order to make the correct purchasing decisions.
How do I sell shares in a private high-tech company?
Do I need a broker to help with my sale?
Will the issuer of my shares permit my sale?
Is there a minimum price for a securities purchase offer?
Yes, the minimal price for posting a transaction offer is changing from share according to the seller instructions.
The minimum transaction is:
For A Dedicated Limited Partnership For investors investing US $30,000 – US $1 million, we open a dedicated limited partnership (at this stage, the legal entity will be set up in Israel) for each pre-IPO share that is presented on the Arena. The innovative model of dedicated limited partnership, which is characterized by lower costs, enables accessibility to a larger market of private investors. We offer a unique model of limited partnership investment, which includes management services provided by PrivatEquity.biz’s professional team, consisting of accountants, lawyers and analysts who provide continuous supervision and timely reports regarding the investment and its results.
For A Direct Sale A Direct Sale for the shares that appear on the Arena, which is accompanied by us, for investors investing between US $100,000 – US $1 million – in consideration of commission in the amount of 5% from the parties – (the seller and the buyer). The process for the purchase and transfer of the shares is performed through trustees with whom we work in collaboration.
When am I required to pay the price of the purchase?
Upon submission of an offer to purchase the securities, the securities' buyer will be required to transfer the value of the securities and PrivatEquity's commission to a trust account. Only when the conditions agreed upon by the parties have been met, and the seller has provided the documents which he is obligated to provide to the buyer and which testify to the complete transfer of the securities from the seller's ownership to that of the buyer (such as the provision of a securities' transfer deed, signed by the seller, or the company directorate’s approval of the transfer of the securities, or a confirmation that the other securities' owners have waived/renounced their rights to purchase the securities, etc.) will the funds be transferred to the seller.
How can I confirm that the sellers who present themselves as the owners and holders of the securities are indeed the owners and holders?
Before committing yourself to a securities' purchasing agreement, you should conduct all the necessary research required in transactions of this type and verify that the sellers of the securities are indeed their owners and holders. Therefore, we suggested that you receive a formal document from the company whose securities are offered for sale that testifies that the seller is indeed registered in the company's records as the owner and holder of the securities. It is also recommended that you check the records of the Registrar of Companies concerning the company (if buying stocks), etc.
Is purchasing a private company’s securities suitable for everyone?
Purchasing a private company's securities is an investment suitable for those who have the ability and the qualifications to examine investments and the purchase of securities and their complexities (including the risks involved) and reach an educated and responsible decision regarding the profitability of the investment or the purchase and its suitability to their own specific circumstances. Notwithstanding the aforementioned, buying and selling securities via the site is limited to those over the age of 18.
I am interested in buying securities from a private company whose securities are not offered for sale on the site. Can you help me with this?
If you are interested in buying the securities of a company whose securities are not offered for sale on the site, please contact us and we will do our best to make contact with owners of the desired company's securities regarding offering their securities or part of them for sale.
What is the securities buying procedure?
Please read about the process on "Work Models" page.
We recommend that you use the services of a lawyer or any other relevant consultant on your behalf to layout the conditions of the securities purchasing agreement, carry out the necessary validations, and maintain your rights.
What restrictions apply on the securities offered?
The transfer of a private company’s securities is usually limited in different ways, such as the requirement that the board of directors approve the transaction, the requirement that the other security holders withdraw their purchasing rights, etc. In addition, it is possible that upon receiving the securities the seller obliged himself towards the company to refrain from selling the securities within a certain period of time or other obligations. In principal, the company may refuse to approve the transfer of the securities from the seller to the buyer.
The parties should examine beforehand, with the assistance of professionals, the limitations that are relevant to the transfer of securities and whether these limitations be alleviated.