Common Misconceptions About Selling Private Shares

Selling private shares can feel like navigating a maze. It’s a world with its own rules, and many misconceptions float around. Let’s debunk some of the most common ones, so you can approach private-market transactions with confidence.

Misconception 1: Selling private shares is always complicated and expensive.

While it’s true that selling private shares isn’t as straightforward as selling public stocks, platforms like Earlyasset aim to simplify the process significantly. The days of endless paperwork, legal hurdles, and opaque pricing are fading. Earlyasset helps streamline the process, aiming for low-friction execution and greater transparency.

Learn More: Low Friction Execution Our Approach

Misconception 2: Only employees nearing an IPO or founders want to sell.

Liquidity needs arise for various reasons—from life events like a down payment on a house to diversification goals or covering unexpected expenses. It’s perfectly normal to explore your options regardless of your role or the company’s stage. Earlyasset supports both “need” and “want” motivations for liquidity.

Learn More: Life Events Liquidity When a Sale Makes Sense

Misconception 3: Selling shares before an IPO means you’re losing out on potential gains.

No one has a crystal ball. While IPOs can generate significant returns, they’re not guaranteed. A pre-IPO sale allows you to lock in current value, reducing your risk exposure. This can be particularly attractive in volatile markets or if you need liquidity for other reasons. It’s about balancing potential future gains with present-day financial needs and risk tolerance.

Learn More: The IPO Initial Public Offering What Happens Next

Misconception 4: Selling even a small number of shares will negatively impact the company.

Company-friendly liquidity solutions like those offered by Earlyasset prioritize the company’s well-being. Discrete transactions and consolidated buyer pools minimize disruption and avoid sending unintended valuation signals. Earlyasset also works closely with companies to structure secondary transactions that align with their goals.

Learn More: Company Friendly Liquidity What It Means for Your Company Learn More: Benefits of Consolidating Cap Tables with SecondaryOS

Misconception 5: Finding a buyer for private shares is nearly impossible.

The private secondary market is growing rapidly. Platforms like Earlyasset connect potential sellers with a network of accredited investors seeking private-market opportunities. This makes finding a buyer significantly easier than trying to navigate the process independently.

Learn More: Accredited Investor Who Can Buy Private Shares Learn More: The Secondary Market

So here’s what we covered: