gilbug

(raises hand)

When I was at Forge we developed a stock transfer agreement that worked with most any company's setup. I was hoping to post it online and promote it as a universal standard to make everything more efficient, but we had other fish to fry.

The friction is that about half the companies insist on using their own transfer forms and agreements, which are highly company favorable. The companies that let you bring your own documents usually send them to their lawyers for negotiation – and then charge the buyer or seller a transfer fee of a few thousand dollars. Some require a legal opinion vouching for securities law compliance as well, so there's no escaping the lawyers.

My suggestion is that you ask company management if there is a specific stock transfer form they require, and in the alternative whether they can give you a redacted copy of a form they have approved in the past. Failing that, you can ask your friends for the contract they used to sell their own stock.

If the sale price is hundreds of thousands of dollars or more, it's probably worth hiring a lawyer regardless, or going 50/50 with your buyer to hire one together. Per loeber, a fee of a few thousand dollars would be reasonable. If you went with Forge or EquityZen they would end up doing the same legal work in house, plus tacking on their own administrative costs plus profits, which isn't really what they're setup to do. So you can understand the reluctance. But if they can get you a better price, it could be worth it. There are also some private brokers out there, mostly on trades of millions of dollars and up.

Feel free to hit me up for pointers if you get stuck.

As the company's in-house lawyer, I see that people who have a lot of stock have generally hired a wealth manager, financial advisor, or personal lawyer who advises them on transactions, or learn through colleagues who have done so. Some lawyers specialize in employee equity, or private transactions more generally. Shares of stock can be bought and sold like other financial assets, subject to any regulations and contract obligations that apply. That's a definitional attribute of stock and other securities. Public markets are a layer on top of that, not something fundamentally different. Employee shareholders who are not directors, officers, or 10% owners generally fall under a 4(a)(1) exemption from registration. There are a bunch of online resources on the topic, for example http://securities-law-blog.com/2015/06/23/section-4a1-4a1%C2... (no connection and not an endorsement, the site just looks helpful).

Hi, company lawyer here. Sorry if that sounded dismissive. You're completely right that there's a right of first refusal built somewhere into most stock issuances to team members. They vary in who holds the right, the range of transactions that trigger the right, exceptions to the right, and how it operates. Accordingly, we look at the paperwork for each company and each shareholder in order to structure a transaction that works, if possible.

CLO-dude here. Hmm. We are still fine-tuning the option plan so for now as a technical matter, no.

When we do flip that switch, I expect that we will offer our optionees, like other team members, early investors, advisors, and other shareholders at least as much liquidity as we expect out of the rest of the industry. All of our stock agreements to date contemplate secondary liquidity. We might have to do that via third parties — I haven't thought through the implications of trading Equidate shares on Equidate. It sounds like a Malkovich moment.