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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.

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.

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.

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.

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.

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.

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 usually required to approve the transfer of securities; the other securities' owners may have a right of first refusal to purchase the securities being offered, 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.

Is the purchasing of a private company’s securities considered a solid, risk-free transaction?

Purchasing securities is an investment that involves risks and is not considered a solid investment. It requires the examination of the many aspects of the investment and the purchase, including financial, 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 with respect to 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 lower; 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.

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.

What commission does PrivatEquity charge for conducting the transaction via the site? – Dedicated Limited Partnership

For investors investing US $30,000 – US $1 million, we open a dedicated limited partnership with respect to the shares of each pre-IPO target company 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 and enables the investors to diversify their investment portfolio to include a mix of such companies. 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 with respect to the investment and its results. The limited partnership complies with the strictest standards for financial transactions. The investment process is executed by one of Israel’s leading and most trusted firms, which manages the transfer of the dedicated limited partnership in accordance with the pre-agreed terms of the transaction. In addition, tax and accounting issues are overseen by one of Israel’s leading accounting firms. We collect management fees from the investor in the amount of 3.5% per annum for three years in advance, and thereafter on an annual basis and 15% success fees of the profit at the time of the IPO and/or the exit event. Please read about the process on "Work Models" page.

What commission does PrivatEquity charge for conducting the transaction via the site?- Direct Sale

A Direct Sale: Subject to the completion of the transaction, we will charge the securities' seller 2.5% of the purchase price as the seller's commission to PrivatEquity.
The seller's commission is only charged if the transaction is finalized. The securities' buyer will deposit into the trustee's account the price of the purchase plus 2.5% of the purchase price as the buyer's commission to PrivatEquity.
Any commissions from the seller or the buyer are only charged if the transaction is completed. Once the transaction is completed, the trustee will transfer the funds to the seller and the commissions from the buyer and the seller to PrivatEquity.
Please read about the process on "Work Models" page.

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.

Will the issuer of my shares permit my sale?

Generally private companies are supportive of their shareholders finding liquidity. They do, however, have a number of valid concerns regarding such stock sales. These include sensitivity to disclosure of financial information; the impact secondary sales may have on their option pricing and/or valuation of the company and compliance with securities laws. Each issuer has different policies and processes in place to address these concerns. For example, almost all issuers impose a right of first refusal on secondary stock sales and require legal opinions. Your PrivatEquity Private Securities Specialist will help you navigate your relationship with the company and compliance with their preferred transaction process.

Do I need a broker to help with my sale?

No - there is certainly no legal requirement that you use a broker to sell private high-tech company shares. Many sellers, however, find that leveraging a broker and a private market platform like PrivatEquity provides several advantages. These include a large network of potential buyers, experience with private company transfer processes, knowledge of applicable securities laws and transaction documents and the expertise to bring these elements together in a successful transaction.

How do I sell shares in a private high-tech company?

Selling shares of private high-tech companies can be challenging. To complete a transaction, you must find a buyer, negotiate price, execute legal agreements and process the transaction with the company.  Applicable securities laws must also be understood and navigated. PrivatEquity has helped buyers and sellers execute each of these steps.

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 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.

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.

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.

Who can transact in the private secondary market?

Typically, to purchase unregistered securities (i.e., private company stock), you must be an “accredited investor” or a “qualified institutional buyer.” These terms are defined under the securities laws as individuals and corporate entities meeting certain financial and sophistication tests. There is, however, no such accreditation requirement for those selling unregistered securities.

How do I value private company shares?

Unlike public companies, private companies are not generally required to make financial disclosures to shareholders or prospective investors. There is also no formal, central marketplace where pricing from prior trades is published. As a result, valuing private company shares can be difficult. Private market investors can, however, leverage PrivatEquity.biz’s trade and valuation data as well as our proprietary research. In addition, your Private Securities Specialist is daily in the market facilitating transactions for leading private high-tech companies. He or she can share their insight into the market and bring together all available information to help you come to a view on valuation and price.

How do I buy shares in a private company?

Buying shares of private companies can be challenging. To complete a transaction, you must find a seller of the desired shares, negotiate price, execute legal agreements and work through the issuer’s the right of first refusal and other transfer requirements. Applicable securities laws must also be understood and complied with. PrivatEquity has helped buyers navigate each of these steps.

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.

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.

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.

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.

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.

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.

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 with respect to the shares of each pre-IPO target company 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 and enables the investors to diversify their investment portfolio to include a mix of such companies. 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 with respect to the investment and its results.

For A Direct Sale

A Direct Sale for the shares that appear on the Arena, which is presented by us, for investors purchasing shares with a value of US $100,000 – US $1 million – is subject to a fee in the amount of 5% from the parties – (to be bourn equally by each of 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.

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