Atish Davda, CEO and founder of EquityZen, joins The Startup Project to demystify the world of secondary markets. Discover how his personal need for liquidity led to the creation of a platform that provides access to pre-IPO shares for accredited investors.
5 Things You'll Learn from This Episode
- Understand the three evolutionary stages of private markets, from early IPOs to today's standardized secondary platforms.
- Differentiate between early-stage primary investments (power law returns) and late-stage secondary investments (doubles and triples).
- Evaluate secondary deals by analyzing stock type (preferred vs. common), price discounts, and the credibility of existing institutional investors.
- Learn how to spot potentially illegitimate secondary transactions, such as forward contracts or IOUs, that lack company approval.
- Distinguish between a company's 'Right of First Refusal' (a matching right) and a 'blocking right' in secondary share transfers.
About the Episode
Atish Davda shares the origin story of EquityZen, born from his own struggle to liquidate a small amount of private stock. The conversation explores how EquityZen standardized the secondary transaction process, making pre-IPO investing accessible beyond multi-million dollar blocks. Atish breaks down investment strategies, the importance of company-friendly practices like respecting the Right of First Refusal, and the risks of unapproved secondary deals.
Timestamps
- 0:00 — Introduction
- 1:10 — The Personal Story Behind EquityZen
- 4:19 — The Three Stages of Secondary Market Evolution
- 9:00 — How EquityZen Standardized Secondary Transactions
- 14:44 — Portfolio vs. Single Company Investment Strategy
- 20:10 — Understanding EquityZen's Business Model: Fees vs. Carry
- 24:34 — Why Company Relationships and Approvals Matter
- 27:17 — The Nuances of Right of First Refusal
- 30:36 — Identifying Legitimacy and Risk in Secondary Deals
- 37:14 — Marketing in a Highly Regulated Industry
- 40:19 — Comparing IPOs and Direct Listings for Investors
- 44:04 — Future Outlook for IPOs and Secondaries
About Aatish
Atish Davda is the CEO and founder of EquityZen, a leading marketplace for pre-IPO employee shares. He founded the company after personally experiencing the challenge of gaining liquidity from private company stock. Previously, Atish was the co-founder and CTO of Nullsoft and VP of product at Ampush.
CEO and Founder at EquityZen
About the Host
Nataraj Sindam is the creator of The Startup Project, a podcast featuring founders, investors, and operators building the future.
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