The Democratization of the Private Market
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Facebook, Uber, Robinhood: all were private companies at some point. Historically, there has been no way for investors to easily buy and sell shares in private companies. With the introduction of blockchain technology, digital securities, and decentralized financial solutions, the ability to grow the private market is on the horizon. Regulators around the world are rushing to catch up and understand how to protect investors who want to participate in this market. This book reviews the regulatory, technical, and societal challenges to open this asset class to more investors in the future.
Read an Excerpt
In order to understand more about the market place to sell shares, I spoke with Brian Smith, formerly a wealth management adviser with Morgan Stanley who is presently the CEO of RedCrow and The MainStage. He says: When asked, “Shouldn’t everyone be given a chance to invest?” I believe financial advisers certainly need to be educated and aware of these opportunities in order to support and help their clients. Like any traditional asset allocation and portfolio management, depending on your time horizon as an investor, and your risk tolerance, there are percentages within a portfolio that makes sense for different types of investors to be investing in the private equity world. One thing that makes it a little bit more exciting is that there’s so much to invest in, in all different fields. So, if you’re a doctor and you like healthcare innovation, then maybe you could have the ability to invest in companies like those found on the RedCrow platform. If you’re somebody who made a lot of your wealth and money from real estate, and you understand that world, then maybe there’s a real estate platform where you can get involved with some early investments in some different properties. Everybody has to be accredited to be able to invest in the companies that are on RedCrow. However, we just recently started adding Reg CF deals. So, what we’re doing now is helping to co-promote these investment opportunities, where the non-accredited investors within the Red Crow ecosystem can come to RedCrow, see the tile on these Reg CF deals, and when they click the tile, it’ll bring them directly to either Republic or WeFunder where they can go and invest as far as the deals we oversee. Private company liquidity is super important. I don’t want to see bad companies out there trading on a secondary market, and they’re just people trying to flip out of their stock because they realize it’s not going anywhere. So, I think that’s going to take some more regulations. I’m starting to see some organizations out there that are trying to be like a Morningstar for private companies and give them a rating. And I think those can only help in the curation of what a good deal is.”
About the Author: Carine Schneider, FGE (Fellow of Global Equity) is an experienced and well-connected leader in the private market and global compensation industry with deep experience working in consulting, technology, and financial services. She is the President of AST Private Company Solutions (AST PCS). She was named one of the 100 Influential Women in Silicon Valley by the Silicon Valley Business Journal and one of 17 “Women to Watch” in 2017 by Brown Brothers Harriman Center on Women and Wealth. Carine was formerly the President, Nasdaq Private Market and has been the founder and CEO of Global Shares, CEO of Certent, and Partner at PwC. She has also held senior level positions at Morgan Stanley and Willis Towers Watson. She was the founding Executive Director of the National Association of Stock Plan Professionals (NASPP) and founded the nonprofit Global Equity Organization (GEO) where she is now Chair Emeritus, after serving as Chair for eighteen years. She 103 started her career as Manager of Shareholder Relations at Oracle Corporation where she assisted in the IPO. Ms. Schneider was born in The Netherlands and received her degree in psychology and sociology from the University of California, Santa Cruz. She is a frequent speaker at conferences around the world, including at President Obama’s 2016 Global Entrepreneurial Summit, and has authored various articles and chapters in industry publications. She currently serves as a member of the Board of Professional Business Women of California (PBWC). In 2019, she received the UK ProShare Award for Service to Employee Share Ownership.