Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>In late 2019, Asana employees sold stock¹ into a tender offer priced at $15.82.</li><li>We found that not only are employees still the “last to liquidity”, they still need to go to the public markets to get competitive pricing on their stock.</li><li>All secondary sales tend to be at or under the last round’s price, but founders and investors were more likely to sell at a 1:1 ratio to the price of the last round, while employees were more likely to sell at a discount.</li></ul>

In late 2019, Asana employees sold stock¹ into a tender offer priced at $15.82.We found that not only are employees still the “last to liquidity”, they still need to go to the public markets to get competitive pricing on their stock.All secondary sales tend to be at or under the last round’s price, but founders and investors were more likely to sell at a 1:1 ratio to the price of the last round, while employees were more likely to sell at a discount.

Tender Offers In 2021: Underpriced And Undersubscribed

<ul><li>Startups tend to have a long and uncertain time-to-upside: many people take pay cuts in the hopes that they&#39;ll have a good outcome down the road.</li><li>If after 3-4 years you can be earning more in liquid comp than you would at Facebook, and you also have all your remaining carried equity on top of that, it makes going to work at a startup potentially far more lucrative than going to work at FAANG.</li><li>In the case of a Series B company worth $100M and growing 150% year-over-year, a float of 20% offers a time-to-upside right around 3 years and leaves an employee with $2.2M in carried equity at the end of year 4.</li></ul>

Startups tend to have a long and uncertain time-to-upside: many people take pay cuts in the hopes that they&#39;ll have a good outcome down the road.If after 3-4 years you can be earning more in liquid comp than you would at Facebook, and you also have all your remaining carried equity on top of that, it makes going to work at a startup potentially far more lucrative than going to work at FAANG.In the case of a Series B company worth $100M and growing 150% year-over-year, a float of 20% offers a time-to-upside right around 3 years and leaves an employee with $2.2M in carried equity at the end of year 4.

The Startup Recurring Liquidity Calculator

<ul><li>Certainly. CartaX is a liquidity platform for companies that are on the path to go public.</li><li>So the ecosystem&#39;s coming, it&#39;s just a matter of time, but those are the three things to start where people can definitely make sure that they&#39;re in a position to win.</li><li>Because an employee can now have the company disseminating the information about why someone should trade on their stock versus an employee saying, wow, I really need to pay off some student debt.</li></ul>

Certainly. CartaX is a liquidity platform for companies that are on the path to go public.So the ecosystem&#39;s coming, it&#39;s just a matter of time, but those are the three things to start where people can definitely make sure that they&#39;re in a position to win.Because an employee can now have the company disseminating the information about why someone should trade on their stock versus an employee saying, wow, I really need to pay off some student debt.

James McGillicuddy, Head Of Strategy At Carta, On Building An issuer-centric Platform And Investing In Secondaries

<ul><li>The problem that CartaX is looking to solve is everything in between.</li><li>Most companies we think are going to start out with a quarterly cadence for their transactions, directly in line with their board meetings.</li><li>We&#39;ve spent the last eight years building infrastructure from the ground up and also signing on private companies and investors.</li></ul>

The problem that CartaX is looking to solve is everything in between.Most companies we think are going to start out with a quarterly cadence for their transactions, directly in line with their board meetings.We&#39;ve spent the last eight years building infrastructure from the ground up and also signing on private companies and investors.

Alessandro Chesser, Former VP Of Sales At Carta, On The Dynamics Of CartaX Auctions And Preparing For Liquidity

<ul><li>And we&#39;re excited to be a part of the cap table and build a relationship longterm.</li><li>We can help with the narrative, the story, the bottoms up view and what we do really well, given our experience and how we&#39;ve done that with past companies.</li><li>We&#39;re doing one actually right now where we are buying series A and series B shares from early shareholders that need liquidity and we have a long hold period that we&#39;re okay with.</li></ul>

And we&#39;re excited to be a part of the cap table and build a relationship longterm.We can help with the narrative, the story, the bottoms up view and what we do really well, given our experience and how we&#39;ve done that with past companies.We&#39;re doing one actually right now where we are buying series A and series B shares from early shareholders that need liquidity and we have a long hold period that we&#39;re okay with.

Arjun Sethi, co-founder Of Tribe Capital, On Investor Allocation Strategies And Democratizing Access To Capital

United States

Software for managing cap tables, valuations, and liquidity for private companies

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Carta (CARTA US)

Tender Offers In 2021: Underpriced And Undersubscribed

83% of secondary sales via tender offers are priced at or under the price of the last round, resulting in sub-40% participation. Employees are...

Sacra

The Startup Recurring Liquidity Calculator

A startup's "time-to-upside" reflects how long it takes for their yearly liquid compensation to hit break-even with public company compensation.

Sacra

James McGillicuddy, Head Of Strategy At Carta, On Building An issuer-centric Platform And Investing In Secondaries

Our fifth of 9 expert interviews with VCs, brokers, CFOs, and fund managers on the future of private market liquidity.

Sacra

Alessandro Chesser, Former VP Of Sales At Carta, On The Dynamics Of CartaX Auctions And Preparing For Liquidity

Our third of 9 expert interviews with VCs, brokers, CFOs, and fund managers on the future of private market liquidity.

Sacra

Arjun Sethi, co-founder Of Tribe Capital, On Investor Allocation Strategies And Democratizing Access To Capital

Our eighth of 9 expert interviews with VCs, brokers, CFOs, and fund managers on the future of private market liquidity.

Sacra

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