Exchange technology firm Nasdaq has launched a platform for private companies to raise capital and control secondary transactions prior to an initial public offering (IPO).
The firm says the Nasdaq Private Market platform will provide liquidity to shareholders in private companies, such as employees who own stock, while allowing participating companies to control the percentage of holdings shareholders can sell.
“Nasdaq Private Market gives entrepreneurs more flexibility in deciding if and when to go public,” said Bruce Aust, 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.”
Nasdaq says the platform can allow for the transition of ownership to long-term institutional buyers prior to an IPO and so smooth the transition to being a public company.
The project is a joint venture between the Nasdaq OMX Group and online shares trading site SharesPost.
SharesPost allows shareholders in private companies such as Pinterest, Spotify and Dropbox, many of them venture capital-backed start-up firms, to trade their shares.
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