EquityZen
Secondary marketplace connecting accredited investors with pre-IPO shares in late-stage private companies through SEC Reg D offerings—$10K-$50K minimums, 3-5% upfront fees, 2-5 year hold periods, platform reports 74% net aggregate exit returns (per materials as of Jan 2026).
Platform Overview
Secondary marketplace platform facilitating pre-IPO share transactions between existing shareholders (employees, early investors) seeking liquidity and accredited investors seeking exposure to late-stage private companies. EquityZen operates as registered broker-dealer (SEC-registered; FINRA member; SIPC coverage) structuring investments primarily through special purpose vehicle (SPV) LLCs where investors purchase membership interests in entities holding underlying company shares. Three investment structures: single-company funds ($50K typical minimums), multi-company diversified funds ($20K-$50K), and direct share acquisitions ($200K+). Investors pay 3-5% upfront fees (scaling with investment size); typical 2-5 year hold periods until company IPO or acquisition provides exit. Platform reports 74% net aggregate exit return across completed transactions (per company materials), though outcomes range from total losses to substantial gains with high variability.
Platform's marketplace facilitates transactions where existing shareholders (employees, early investors) sell equity to new investors through SEC Reg D structures, with EquityZen operating as broker-dealer handling legal/regulatory complexity. Per platform materials as of January 2026: 820K+ subscribers, 450+ companies served, $1.5B+ distributed to selling shareholders, $710M+ distributed to investors, 50K+ completed transactions. Featured companies span tech unicorns to late-stage growth companies across AI, fintech, biotech, defense tech, and consumer sectors. Competitive positioning: EquityZen differentiates from Forge Global (institutional-focused platform with higher minimums and broader asset classes including fund interests) and Hiive (employer-sponsored liquidity programs integrated with company HR systems) through retail-accessible minimums ($10K-$50K), simplified SPV pooling structures, and bi-weekly deal flow cadence. Unlike direct company-run tender offers that favor insiders and impose restrictive participation rules, EquityZen's open marketplace provides standardized access for qualified accredited investors, though at cost of higher transaction fees versus institutional platforms. Investment structure: majority of offerings use SPV (special purpose vehicle) LLCs where investors purchase membership interests in entity that holds underlying company shares; upon IPO/acquisition, investors receive publicly-tradable shares or cash proceeds after lockup periods. Minimum investments start at $10,000 for enhanced access members (requiring $50,000 platform balance), $20,000 limited slots for multi-company funds, and standard $50,000 for single-company funds; direct share acquisitions requiring $200K+ available for larger investors. Fee structure: 3-5% upfront investor fee (scaling down with investment size: 5% up to $500K, 4% for $500K-$1M, 3% for $1M+), 5% seller fee; platform typically does not charge carried interest or ongoing fees on single-company SPVs though multi-company funds may have additional costs. Platform reports 74% net aggregate exit return across exited investments, though this excludes ongoing holdings, failed companies, and time-value considerations; third-party sources cite historical range from 100% loss to 450%+ gains with highly skewed distribution. Regulatory framework: EquityZen Securities LLC operates as SEC-registered broker-dealer (FINRA member, SIPC coverage) subject to suitability requirements; investments structured as SEC Regulation D private placements limiting participation to accredited investors meeting income ($200K+/year individual, $300K+ joint) or net worth ($1M+ excluding primary residence) thresholds. Hold periods typically 2-5 years though some investments extend longer if companies delay IPOs or remain private indefinitely. Risk profile: high concentration risk (single-company funds), binary outcomes (total loss possible), illiquidity (no guaranteed exit before company event), valuation opacity (limited financial disclosure), and sector concentration (tech-heavy portfolio). Suitable for sophisticated investors with 5-15% alternatives allocation, long time horizons, comfort with total loss potential, and understanding that past exits do not predict future returns. Not suitable for investors requiring liquidity, stable income, principal protection, or those unable to conduct independent research with limited information disclosure. Platform's competitive advantages include first-mover network effects, established company relationships facilitating ROFR approvals, proprietary pricing models using transaction data, and broker-dealer status providing regulatory legitimacy—but faces increasing competition from Forge Global (larger institutional focus), Hiive (employer-sponsored programs), and direct company-run secondary programs as market matures.
Founded & Structure
2013 by Shriram Bhashyam, Atish Davda (CEO), Phil Haslett (CSO); operates through EquityZen Securities LLC broker-dealer subsidiary; headquarters New York City; 820K+ subscribers per platform materials.
Platform Scale
Per platform materials as of January 2026: 820K+ subscribers, 450+ companies served, 50K+ private placements completed, $1.5B+ distributed to selling shareholders, $710M+ distributed to investors since founding in 2013; deal releases described as bi-weekly with specific operational details varying by market conditions.
Company Focus
Late-stage private companies with established business models, significant VC backing, typical valuations $500M-$10B+, perceived proximity to liquidity events; focus on tech unicorns (AI, fintech, SaaS, defense tech, biotech); examples of companies that have appeared on platform or similar secondary marketplaces include SpaceX, OpenAI, Anthropic, Stripe, Databricks, Anduril Industries, xAI, Perplexity, Groq, Figure AI—specific inventory varies and availability depends on shareholder supply.
Investment Structures
Three primary offerings: (1) Single-company funds (SPV LLC pooling investors for one company), (2) Multi-company funds (diversified across 3-10+ companies), (3) Direct share acquisitions ($200K+ minimums for direct ownership); Express Deals for faster secondary transactions when sufficient demand exists; all structured as SEC Regulation D offerings.
Investment Minimums
Platform-stated minimums: $10,000 for enhanced access members (requires maintaining $50,000 balance for reduced minimums, early access to high-demand deals, and waitlist prioritization); $20,000 limited slots for multi-company funds (first-come, first-serve basis); $50,000 standard minimum for single-company funds; $200,000+ for direct share acquisitions; minimums vary by specific deal.
Fee Structure
Investors: One-time upfront fee charged on top of investment amount—5% for investments up to $500K, 4% for $500K-$1M, 3% for $1M+ (example: $50,000 investment requires $52,500 wire transfer). Sellers: 5% fee when transactions close, potential negotiation for larger blocks. Platform typically does not charge carried interest or ongoing management fees on single-company SPVs; multi-company funds may have additional administrative or management costs—review specific offering documents for complete fee disclosure. Termination fee: $500 if investor fails to complete investment within specified timeframe per deal terms.
Accreditation Requirements
SEC-defined accredited investor status required: Individual—$200K+ annual income ($300K+ joint with spouse) in each of prior two years with reasonable expectation of same for current year, OR $1M+ net worth (excluding primary residence). Entity—various qualifications including $5M+ assets or qualifying family office. Verification methods vary by offering structure—investors complete questionnaires and provide binding representations; certain offerings (particularly 506(c)) may require additional documentation for reasonable verification steps per SEC requirements.
Investment Process
1) Sign up and verify accredited status, 2) Browse live offerings or indicate interest in preview offerings (reserve allocation or join waitlist), 3) Review offering documents and company information, 4) Execute legal documents and provide payment via ACH/wire, 5) Deal closing timelines and company approval processes vary by specific offering—review deal terms for ROFR periods and expected transaction completion timeframes, 6) Upon approval, investors receive SPV membership interest, 7) Active portfolio management with personalized updates until exit.
Hold Periods & Exits
Typical 2-5 year hold periods though some extend longer if IPOs delayed or companies remain private indefinitely; exit mechanisms: (1) IPO—shares transfer to investor brokerage accounts after lockup period, (2) Acquisition—cash or acquirer shares distributed per deal terms, (3) Secondary marketplace sales to other accredited investors (dependent on demand and company approval); no guaranteed exit timeline or outcomes.
Historical Performance
Platform reports 74% net aggregate exit return across exited investments (per company materials)—'net' reflects deduction of transaction fees; third-party sources cite historical range from 100% loss (companies failed) to 450%+ gains (successful IPOs/acquisitions), with highly variable outcomes by deal and vintage; past performance not indicative of future results; figure represents survivorship bias (excludes ongoing holdings and complete failures) and does not account for time-value of money from multi-year hold periods.
SPV Structure
Majority of investments structured as special purpose vehicle (SPV) LLCs—investors receive membership interests in LLC that owns underlying company shares rather than direct stock ownership; SPV managed by platform or affiliate; investors receive annual K-1 tax forms; structure allows pooling of small investors to meet company minimums and facilitates administration but creates additional legal entity layer.
Company Approval Process
After investor commitments received, companies exercise right of first refusal (ROFR) typically 30 days to purchase shares on same terms as investor offer; companies can block secondary transactions, impose transfer restrictions, or negotiate modified terms; deal may terminate if company exercises ROFR or declines approval, creating uncertainty even after investor commitment.
Tax Treatment
SPV membership interests taxed as partnership interests—investors receive annual Schedule K-1 forms reporting share of income, gains, losses, deductions; capital gains treatment applies upon exit—short-term (ordinary income rates) if held <1 year, long-term (0-20% preferential rates) if held ≥1 year; state tax implications vary; complex tax reporting unsuitable for investors unfamiliar with K-1 forms.
Information Access
Limited company information disclosure—investors receive offering documents with basic company description, valuation, recent financing history, and risk factors; no access to detailed financial statements, board materials, or ongoing operational metrics unlike public company SEC filings; information asymmetry heavily favors company insiders and early investors; must conduct research with limited data.
🔄Critical Context for Pre-IPO Secondary Market Evaluation
- 74% aggregate exit return marketed by platform represents survivorship bias—excludes ongoing holdings that haven't exited (potentially underwater at current private market valuations), companies that failed entirely before achieving liquidity, and ignores time-value of money from 3-7 year hold periods; if applied properly, many 74% nominal returns become mid-single-digit IRRs.
- Secondary pricing dynamics create adverse selection risk—shareholders selling pre-IPO may possess private information about company challenges, slowing growth, or delayed exit timing not available to buyers; professional venture capitalists typically buy in primary rounds with information rights and board seats that secondary investors lack.
- 8-10% total transaction costs (3-5% investor fee + 5% seller fee) create significant performance drag—investment must appreciate 10%+ just to break even before considering opportunity cost of multi-year capital lockup; venture capital funds typically charge 2% annual management fee + 20% carry which may be more favorable over longer holds.
- Late-stage entry points limit upside potential—companies valued at $10B+ have already captured substantial appreciation from seed/Series A valuations; paying $100B+ for SpaceX or $157B for OpenAI requires belief in multi-hundred-billion or trillion-dollar outcomes just to generate venture-style returns.
Key Gaps & Non-Disclosures
- Deal-level performance distribution—no disclosure of percentage of deals generating positive returns versus losses, median returns, quartile performance, or outcomes by vintage year; aggregate 74% figure could mask scenario where 20% of deals generated 300%+ returns while 80% lost money.
- Current portfolio valuations for ongoing holdings—investors lack transparent mark-to-market pricing showing how private company valuations moved since investment; particularly problematic during 2022-2023 tech downturn when many unicorns marked down 30-70% but secondary markets remained illiquid.
- Company ROFR exercise and deal rejection rates—percentage of transactions that fail due to company blocking transfers, insufficient investor demand, or regulatory complications not systematically disclosed; creates deal flow uncertainty even after investor commitment.
- Comparison of EquityZen entry pricing versus contemporaneous primary round pricing—whether secondary buyers pay premiums, discounts, or par relative to latest institutional financing terms; pricing transparency limited to 'based on recent rounds' language.
- Time-to-exit statistics by cohort—actual holding periods from investment to liquidity event by vintage year would reveal whether 2-5 year guidance realistic; many 2018-2021 vintage investments may remain illiquid as IPO markets closed 2022-2024.
Investment Structures
Single-Company Funds (Standard & Express Deals)
Concentrated exposure to one pre-IPO company through SPV LLC structure where multiple investors pool capital to purchase shares from selling shareholder(s). Standard deals: Full due diligence and documentation process with 8-11 week closing timeline from investor commitment to transaction close; company approval required via ROFR. Express Deals: Faster transactions when sufficient investor demand exists and company approval already secured or streamlined. Structure: Investors receive membership interest in LLC that owns underlying company shares; LLC managed by EquityZen or affiliate; investors receive annual K-1 tax forms. Typical minimums: $50,000 standard, $10,000 for enhanced access members maintaining $50,000+ balance. Fees: 3-5% upfront investor fee (scales with investment size) plus 5% seller fee. Companies featured include SpaceX, OpenAI, Stripe, Databricks, Anthropic, Anduril Industries, hundreds of others. Exit: Upon company IPO, shares transferred to investor brokerage accounts after lockup period (typically 90-180 days); upon acquisition, cash or acquirer shares distributed per deal terms; secondary sales possible if marketplace demand exists and company approves. Risk: Concentrated single-company exposure with binary outcome potential (total loss if company fails, substantial gains if successful exit); 2-5+ year illiquid hold period; no guaranteed exit timing; limited information disclosure. Suitable for: Investors with strong conviction in specific company's trajectory, comfort with concentration risk, and ability to diversify across multiple single-company positions over time.
Multi-Company Funds (Growth Opportunity & Thematic)
Diversified exposure across 3-10+ pre-IPO companies in single fund investment, reducing single-company concentration risk while maintaining private equity exposure. Growth Opportunity funds: Curated selection across high-growth sectors (AI, fintech, biotech, defense tech); portfolio construction based on platform's market insights and deal flow. Thematic funds: Focused on specific sectors or investment themes (e.g., AI infrastructure, climate tech, consumer brands). Structure: Single SPV LLC or fund entity owning shares across multiple portfolio companies; investors receive membership interest in fund and annual K-1 forms. Typical minimums: $50,000 standard, $20,000 limited slots available first-come-first-serve basis per platform materials. Fees: 3-5% upfront investor fee depending on total investment size. Portfolio composition: Platform selects companies based on perceived quality, sector diversity, and stage distribution; investors cannot customize portfolio or opt out of specific holdings. Exit timing: Staggered as individual portfolio companies achieve liquidity events (IPO, acquisition); fund may distribute proceeds as received or hold until full portfolio liquidation per fund terms. Benefits: Reduces binary single-company risk through diversification; investors gain exposure to multiple late-stage companies without requiring $500K+ to build diversified portfolio of single-company funds. Tradeoffs: Less transparency into individual holdings versus single-company funds; concentrated sector risk if thematic focus; exit timing dependent on multiple company events potentially extending hold periods. Suitable for: Investors prioritizing diversification over company selection control, comfortable with broader private equity exposure, and seeking portfolio approach with lower per-company minimums.
Direct Share Acquisitions
Direct ownership of company shares for larger investors ($200,000+ typical minimums) seeking position on company capitalization table with potential information rights and communications. Structure: Investor purchases shares directly via EquityZen-brokered transaction rather than through SPV pooling mechanism; direct name on company cap table; potentially negotiated information rights or communication privileges depending on company policies and investment size. Benefits: Direct ownership eliminates SPV management layer and K-1 complexity; shares held in investor name not pooled vehicle; potential for enhanced information access and company communications; greater flexibility for estate planning and transfer. Tradeoffs: Higher minimums ($200K-$500K+ typical) limiting accessibility; still subject to company ROFR approval and transfer restrictions; limited liquidity until company liquidity event; may require more extensive legal documentation and negotiation. Fees: 3% investor fee for $1M+ investments, 4% for $500K-$1M, higher percentage for smaller allocations; seller fee 5% negotiable for larger blocks. Exit: Shares transfer to investor brokerage account upon IPO after lockup period; cash or acquirer shares upon acquisition; potential secondary marketplace sales subject to company approval and finding buyers. Suitable for: High-net-worth investors or family offices making substantial private equity allocations, those seeking simplified ownership structure versus SPV interests, and investors desiring potential information rights and cap table presence. Not suitable for: Retail investors unable to deploy $200K+ per position or those seeking diversification through lower minimums.
Risk Structure
Illiquidity and undefined hold periods
Investments are illiquid with typical 2-5 year expected hold periods, but actual timing depends entirely on company decisions regarding IPO/acquisition outside investor control—some companies remain private 7-10+ years; secondary marketplace sales possible but depend on buyer demand and company approval with no guarantees.
Binary outcomes and total loss potential
Single-company funds create concentrated exposure with binary risk—companies either achieve successful exits (IPO, acquisition) generating returns or fail entirely resulting in 100% capital loss; historical range from total losses to 450%+ gains with highly skewed distribution where few winners drive aggregate returns.
Valuation opacity and pricing risk
Private company valuations lack public market transparency and based on recent financing rounds that may be stale, optimistic, or manipulated; secondary pricing determined through seller negotiations not market clearing; disconnect between entry price and fundamental value difficult to assess without detailed financial disclosure.
Company approval uncertainty via ROFR
After investors commit capital, companies exercise right of first refusal (ROFR) with period to purchase shares on same terms or block transaction entirely; creates deal uncertainty where committed capital may not deploy; investors may face fees or allocation reallocation if unable to complete within specified timeframes per deal-specific terms.
Information asymmetry and limited disclosure
Unlike public companies with SEC-mandated quarterly/annual filings, investors receive only offering documents with basic company information and limited updates; no access to detailed financials, operational metrics, or board materials; selling shareholders may possess material non-public information about challenges motivating sales.
Fee drag and performance hurdle
8-10% total transaction costs (3-5% investor fee + 5% seller fee) plus opportunity cost of multi-year capital lockup creates meaningful performance hurdle—investment must appreciate substantially just to break even versus liquid alternatives; no ongoing fees but upfront friction reduces net returns.
Extended illiquidity and indefinite hold periods
Risk Summary
Investments structured as illiquid private placements with 2-5 year expected hold periods, but actual duration depends entirely on company IPO/acquisition timing outside investor control. Many late-stage companies remain private 7-10+ years; IPO markets closed 2022-2024 extending holds for 2018-2021 vintages.
Why It Matters
Capital locked up for undefined period with no guaranteed exit mechanism; cannot access funds for emergencies or redeploy to better opportunities; time-value of money erodes returns if hold periods extend beyond expectations; secondary marketplace sales unreliable and dependent on buyer demand plus company approval.
Mitigation / Verification
Only invest capital you can afford to lock up 5-10+ years without needing access; diversify across vintage years to create rolling exit opportunities; understand that 'late-stage' proximity to IPO is not guarantee or timeline; monitor company financing activity and market conditions affecting IPO windows; some positions may remain illiquid indefinitely if companies choose to stay private.
Binary outcomes and total capital loss risk
Risk Summary
Single-company funds create concentrated exposure with binary risk profile—companies either achieve successful exits generating returns or fail entirely. Historical outcomes range from 100% loss (company bankruptcy, acquisition at unfavorable terms) to 450%+ gains (successful IPO at premium valuations). Distribution highly skewed where minority of winners drive aggregate returns.
Why It Matters
Concentrated bet on single company's success with asymmetric downside—can lose 100% of investment but upside capped by entry valuation and exit timing; unlike diversified mutual funds or ETFs, no portfolio-level protection; venture capital outcomes are highly skewed with many companies failing or underperforming while a few winners drive returns, though late-stage focus reduces early-stage binary risk.
Mitigation / Verification
Build diversified portfolio across multiple single-company investments (requires $250K-$500K+ capital to achieve 5-10 positions); consider multi-company funds for instant diversification at lower minimums; accept that several positions will likely fail—venture capital model expects 7/10 losses, 2/10 modest returns, 1/10 home run; never invest more than 5-10% net worth in single position.
Valuation risk and late-stage entry pricing
Risk Summary
Private company valuations lack transparent market clearing and based on recent financing rounds that may be stale (6-18 months old), optimistic (inflated during hype cycles), or subject to preferential terms favoring lead investors. Secondary market pricing determined through seller negotiations not competitive bidding. Entry at $10B-$200B+ valuations requires multi-hundred-billion-dollar outcomes for venture-style returns.
Why It Matters
May be buying at peak private market valuations; limited upside remaining after early investors captured seed-to-unicorn appreciation; comparable public companies trading at lower multiples suggests private market disconnect; market observations from 2022-2023 downturn showed many late-stage valuations repricing downward significantly while secondary markets remained illiquid.
Mitigation / Verification
Conduct independent valuation analysis comparing company metrics to public market comparables; understand what multiple of revenue, EBITDA, or users you're paying relative to sector benchmarks; be skeptical of valuations from recent rounds during frothy markets; consider that late-stage entry captures less upside than seed/Series A but also reduces binary execution risk; review offering documents for preferential terms granted to prior investors (liquidation preferences, anti-dilution, etc.).
Company ROFR and deal termination uncertainty
Risk Summary
After investors execute documents and commit capital, companies exercise right of first refusal (ROFR) with period to purchase shares on same terms as investor offer or block transaction entirely. Companies can decline approval, impose additional transfer restrictions, or require modified terms. Deals may terminate even after investor commitment; investors should review deal-specific terms for completion timeframes and potential fees.
Why It Matters
Capital may be committed but not deployed, creating opportunity cost and transaction uncertainty; fees may apply if deals fall through or completion deadlines not met per specific offering terms; some companies systematically block secondary transactions to control cap table and limit information leakage; no visibility into company approval likelihood before committing.
Mitigation / Verification
Understand that indication of interest and document execution do not guarantee deal consummation; maintain liquidity buffer to fund commitments within one-week completion requirement; research company's history of approving/blocking secondary sales; accept that some committed capital may not deploy; platform provides updates on ROFR status but timeline varies by company responsiveness.
Information asymmetry and limited disclosure
Risk Summary
Unlike public companies subject to SEC reporting requirements (10-K, 10-Q, 8-K filings with detailed financials), private companies provide minimal disclosure—offering documents contain basic business description, valuation, recent financing history, and risk factors but no comprehensive financial statements, operational metrics, or ongoing reporting obligations. Selling shareholders likely possess material non-public information about company performance, challenges, or insider outlook.
Why It Matters
Investors make decisions with fraction of information available to insiders; adverse selection risk where shareholders selling may know about problems not disclosed to buyers; no visibility into revenue growth rates, profitability trends, burn rate, customer churn, competitive threats, or management changes until after investment made; information gap widens as hold period extends with no ongoing updates.
Mitigation / Verification
Conduct external research using public sources: media coverage, Crunchbase/PitchBook data, employee Glassdoor reviews, customer testimonials, competitive analysis; network with industry contacts who may have insider knowledge; understand that limited information access is inherent to private markets and accept higher uncertainty versus public equities; focus on companies with strong brand recognition and external validation reducing information asymmetry.
Fee drag and performance hurdle
Risk Summary
Transaction economics include 3-5% investor upfront fee (charged on top of investment amount requiring larger wire transfer) plus 5% seller fee that may be reflected in pricing. For $50,000 investment, investor wires $52,500; all-in friction can approximate 8-10% of invested amount when including investor fees plus seller-side fees that may be embedded in deal pricing, creating meaningful performance hurdle.
Why It Matters
Fee drag compounds over multi-year hold periods reducing net returns—if investment held 5 years and appreciates 74% nominal (matching platform's aggregate exit return), net IRR materially lower due to upfront fees and opportunity cost; comparable to or potentially less favorable than primary venture capital funds charging 2% annual management + 20% carry depending on hold period and gross performance.
Mitigation / Verification
Calculate net return hurdles accounting for upfront fees and opportunity cost of capital; larger investments ($500K+, $1M+) receive lower 4% or 3% fees improving economics; compare fee structures across competing platforms (Forge Global, Hiive, others); understand that fees reduce net returns regardless of gross performance; ensure expected investment returns justify fee drag and illiquidity premium required.
Survivorship bias in reported returns
Risk Summary
Platform's 74% net aggregate exit return figure represents survivorship bias—includes only companies that achieved successful exits (IPO, acquisition at favorable valuations) and excludes ongoing holdings that haven't exited (potentially underwater at current valuations), companies that failed entirely before liquidity event, and ignores time-value-of-money from multi-year hold periods. Distribution of outcomes highly skewed with few winners driving aggregate.
Why It Matters
Marketed returns create inflated expectations of typical experience; actual investor outcomes more variable with many positions generating losses or modest returns while few generate outsized gains; if 20% of deals generate 300%+ returns and 80% lose money, aggregate can still show positive return masking common investor experience; time-adjusted returns (IRR) substantially lower than nominal returns for 5-7 year holds.
Mitigation / Verification
Interpret aggregate return statistics with extreme skepticism—survivorship bias inherent to platform marketing; ask about distribution of returns (percentage generating positive returns, median outcome, quartile performance) which platform does not disclose; understand venture capital model expects many losses with few winners driving portfolio; set realistic expectations that individual positions highly variable and past aggregate performance not predictive of future specific outcomes.
Sector concentration and correlated risk
Risk Summary
Platform's deal flow heavily concentrated in venture-backed technology sector (AI, fintech, SaaS, crypto, defense tech) creating exposure to tech market cycles, interest rate sensitivity, and sector-specific regulatory risks. Featured companies span similar business models (software platforms, marketplace businesses, hardware-software hybrids) with correlated valuations and exit dynamics.
Why It Matters
Lack of true diversification even across multiple positions—tech sector downturns (2000 dot-com crash, 2022-2023 contraction) simultaneously impact many holdings; interest rate increases disproportionately hurt high-growth-low-profit tech companies; regulatory changes (antitrust, data privacy, AI regulation) create correlated risks; public tech market multiples directly influence private company exit valuations creating portfolio-wide mark-to-market risk.
Mitigation / Verification
Recognize that multiple pre-IPO tech investments do not provide true diversification—all exposed to technology sector performance and exit market conditions; consider balancing with non-tech alternatives (real estate, commodities, other alternative strategies); understand that tech-heavy portfolio amplifies both upside in bull markets and downside in corrections; monitor public tech market multiples as leading indicator of private company exit valuations.
IPO market cyclicality and exit timing risk
Risk Summary
Market context: Exit opportunities for pre-IPO investments depend heavily on public market IPO windows which are highly cyclical—strong activity 2020-2021 followed by significant slowdown 2022-2024 following interest rate increases. Companies delay or cancel IPO plans when market conditions unfavorable, extending hold periods beyond initial expectations.
Why It Matters
Investments made during strong IPO markets may remain illiquid for extended periods if exit windows close; hold periods can extend 2-4+ years beyond original expectations; some companies abandon IPO plans entirely pursuing acquisitions at less favorable terms or remaining private indefinitely; cannot predict IPO market conditions 3-5+ years forward when making investment decisions today.
Mitigation / Verification
Accept that IPO timing outside investor control and subject to macroeconomic conditions (interest rates, inflation, sector rotation, risk appetite); focus on company fundamentals that support acquisition optionality if IPO markets remain closed; understand that 'late-stage' and 'proximity to IPO' marketing language does not constitute timeline guarantee; diversify investment timing across market cycles if building multi-year allocation; monitor IPO market activity as indicator of near-term exit opportunities for existing holdings.
Regulatory & Legal Posture
Security Status
Private placements structured as SEC Regulation D offerings, limited to accredited investors; platform operates as registered broker-dealer (EquityZen Securities LLC, FINRA member #8210625, SEC registered, SIPC member)
EquityZen offerings are private securities exempt from SEC registration under Regulation D (typically Rule 506(b) or 506(c)), which allows companies to raise capital from accredited investors without public registration requirements. Investments structured as limited partnership or LLC membership interests in SPVs holding underlying company shares. Platform operates through EquityZen Securities LLC, a registered broker-dealer subject to FINRA regulations and SEC oversight, providing regulatory legitimacy and investor protections (SIPC coverage protects brokerage account failure but not investment losses). SEC Regulation D imposes transfer restrictions on securities—investors must hold for minimum period and cannot freely trade on public markets; secondary sales subject to company approval and platform facilitation. Accreditation strictly enforced per SEC requirements ($200K+ annual income, $300K+ joint, or $1M+ net worth excluding primary residence); verification approach varies by offering structure (506(b) vs 506(c)) and may require additional documentation for reasonable verification steps. As registered broker-dealer, EquityZen subject to suitability obligations ensuring investments appropriate for investor circumstances, though this does not guarantee performance or eliminate risk.
Disclosure Quality
Limited disclosure typical of private placements—offering documents provide company business description, valuation, recent financing history, and risk factors but lack detailed financial statements, quarterly reporting, or ongoing disclosure obligations unlike public companies. Investors receive basic deal terms, fee structure, SPV structure details, and tax implications (K-1 forms). No comprehensive financial data, operational metrics, customer statistics, or management changes disclosed beyond what companies voluntarily provide. Information asymmetry heavily favors company insiders and earlier investors with board seats and information rights. Platform provides proprietary research and market insights but relies on same limited public information available to all investors. Disclosure improves slightly for larger direct share acquisitions where investors may negotiate limited information rights, though most secondary buyers receive minimal ongoing updates until exit event.
Custody Model
SPV LLC or fund entity holds underlying company shares on behalf of investors; platform or affiliate acts as SPV manager; investors hold membership interests in SPV not direct shares; EquityZen Securities LLC (registered broker-dealer) facilitates transactions but is not custodian of shares
SIPC coverage protects brokerage account assets up to $500K in event of broker-dealer failure (protects against EquityZen Securities insolvency, not investment losses or company failures); FINRA oversight and SEC regulation provide investor protections through suitability requirements and anti-fraud provisions; no FDIC insurance; private placement structure means limited regulatory disclosure and investor protections compared to public securities.
Tax Treatment
Reporting
Schedule K-1 (Form 1065) issued annually for SPV/fund membership interests; direct share acquisitions may receive different treatment depending on structure
K-1 forms issued annually by SPV/fund manager reporting investor's share of partnership/LLC income, gains, losses, deductions; forms typically available by mid-March for prior tax year filing; investors report K-1 items on personal tax returns (Schedule E for passive income/losses); forms can be complex with multiple income categories, state allocations, and special adjustments requiring tax professional assistance.
Income Character
Capital gains (short-term or long-term depending on holding period) upon exit; annual K-1 may report phantom income, ordinary income, or other items during hold period
Tax treatment of SPV membership interests follows partnership taxation rules where investors report their allocable share of entity's income/gains/losses annually via Schedule K-1 even if no cash distributions received. Upon exit (company IPO or acquisition), investors recognize capital gains—short-term (taxed at ordinary income rates up to 37%) if held <1 year from investment date, or long-term (taxed at 0-20% preferential rates) if held ≥1 year. Most pre-IPO investments qualify for long-term treatment given typical 2-5+ year hold periods. During hold period, K-1 may report phantom income (paper gains increasing basis), ordinary income from company operations if SPV receives dividends/interest, or other items affecting basis even without cash distributions—investors may owe taxes before receiving proceeds. Upon IPO, if shares transferred to brokerage account, holding period begins anew from transfer date for future sales; lockup period does not count toward holding period. State tax implications vary—some states impose tax on K-1 income even if investor resides elsewhere creating multi-state filing requirements. Direct share acquisitions may avoid K-1 complexity with direct capital gains treatment, though confirm with offering documents. Qualified Small Business Stock (QSBS) treatment potentially available if underlying company shares qualify under IRC Section 1202, providing 0% federal tax on gains up to $10M or 10x basis (requires holding >5 years, C-corporation issuer, and other requirements); many late-stage companies exceed $50M gross asset threshold disqualifying QSBS so verify eligibility.
K-1 tax reporting creates complexity requiring tax professional assistance—forms arrive mid-March potentially requiring amended returns if filed early; phantom income may trigger tax obligations before receiving cash proceeds; multi-state filing requirements if SPV operates in multiple jurisdictions; SPV structure and QSBS eligibility highly dependent on specific deal terms requiring review of offering documents; Alternative Minimum Tax (AMT) considerations may apply; tax treatment may change if tax laws modified. Direct share structures avoid some K-1 complexity but confirm with specific offering. Consult tax adviser before investing to understand specific implications for your situation.
Account Suitability
Taxable
Suitable but complex—K-1 reporting requires tax professional assistance; capital gains treatment favorable if long hold periods (2-5+ years typical); phantom income during hold period may trigger taxes before cash received; multi-state filing requirements possible; QSBS potential if eligible.
Roth IRA
Usually impractical—most IRA custodians prohibit private placements due to operational complexity, K-1 reporting incompatibility, and UBTI concerns from certain partnership structures. Self-directed IRA custodians may accommodate but with substantial fees, administrative burden, and potential tax complications. RMD requirements at age 73+ conflict with illiquidity. Confirm with specialized custodian and tax adviser; not recommended for typical IRA accounts.
Traditional IRA
Usually impractical—same custodian restrictions and UBTI concerns as Roth IRA; K-1 reporting incompatible with IRA tax-deferral administration; illiquidity creates RMD distribution challenges. Specialized self-directed IRA custodians may allow but with significant fees, complexity, and potential UBTI tax liabilities. Not recommended for typical IRA accounts; verify with custodian and tax adviser if considering.
HSA
Not suitable—HSA custodians do not accommodate private placements or K-1 reporting; investments must be liquid securities (stocks, bonds, mutual funds); illiquid alternative investments prohibited; HSA designed for medical expense funding not speculative private equity; no viable path for pre-IPO investments in standard HSA structures.
Investor Fit
Accredited investors seeking alternatives allocation with long time horizons
Pre-IPO investments provide portfolio diversification uncorrelated to public equities with potential for substantial returns if companies achieve successful exits. Suitable for sophisticated investors treating position as 5-15% alternatives allocation, comfortable with 100% loss potential, and possessing time horizon aligning with 2-5+ year hold periods. Platform provides access to late-stage companies (SpaceX, OpenAI, Stripe) otherwise unavailable to retail investors, with lower minimums ($10K-$50K) versus traditional venture capital fund commitments ($250K-$1M+).
High-net-worth individuals and family offices building diversified private equity exposure
Investors with $250K-$500K+ capital can build diversified portfolio across 5-10+ single-company positions or multi-company funds, reducing binary risk while maintaining high-upside potential. Direct share acquisitions ($200K+ minimums) provide cap table presence and potential information rights. Suitable for investors with independent due diligence capabilities, understanding of venture capital economics, and ability to underwrite companies with limited disclosure. Platform facilitates private equity allocation without requiring primary venture fund commitments or institutional relationships.
Investors seeking specific company exposure with strong conviction
Single-company funds enable targeted bets on specific late-stage companies where investor has independent conviction (e.g., SpaceX if bullish on commercial space, OpenAI if bullish on AI). Suitable for investors who have researched company's market position, competitive dynamics, and exit trajectory, and can tolerate concentrated exposure. Requires acceptance that single-company bet can result in 100% loss but also potential for multi-bagger returns if thesis correct.
Financial advisors managing HNW client portfolios
Platform provides advisors with mechanism to access private markets for qualified clients, but illiquidity creates portfolio management challenges. Suitable for advisors with clients seeking alternatives exposure as part of comprehensive financial plan, though limited information disclosure makes ongoing monitoring difficult. Must carefully assess client suitability (accreditation, risk tolerance, time horizon, liquidity needs) and ensure clients understand fee structures, illiquidity, and binary risk potential. Ongoing client education required as hold periods extend.
Income-focused investors requiring regular distributions
Pre-IPO investments generate zero income during hold period—no dividends, interest, or distributions until exit event (2-5+ years minimum). All returns back-loaded to exit timing creating poor fit for retirees or investors requiring cash flow. K-1 forms may report phantom income triggering taxes without cash to pay them. Not suitable for investors expecting regular income or distributions.
Risk-averse investors seeking principal protection or stable returns
Single-company funds create concentrated exposure with potential for 100% capital loss if company fails or is acquired at unfavorable terms. Binary outcomes (total loss or substantial gains) unsuitable for conservative investors requiring stability. Private market valuations opaque and potentially volatile. Historical returns highly variable (100% loss to 450%+ gains) with no guarantee of positive outcomes. Not suitable for capital preservation strategies.
Investors requiring liquidity for emergencies or near-term goals
Investments illiquid with typical 2-5+ year hold periods and no guaranteed exit mechanism. Cannot access capital for emergencies, home purchase, education expenses, or other near-term needs. Secondary marketplace sales unreliable and dependent on buyer demand plus company approval. Time horizon mismatch creates forced selling at unfavorable terms or inability to meet financial obligations. Only suitable for capital that can remain locked up 5-10+ years.
Passive investors seeking set-and-forget strategies
Pre-IPO investing requires active research to evaluate companies with limited disclosure, ongoing monitoring of portfolio companies and exit market conditions, K-1 tax filing complexity, and suitability assessments as financial circumstances change. Not suitable for passive index fund investors preferring simple buy-and-hold strategies. Requires engagement with complex legal documents, understanding of private market dynamics, and willingness to conduct due diligence with incomplete information.
Key Tradeoffs
Access vs liquidity
Platform provides rare retail investor access to late-stage unicorns (SpaceX, OpenAI, Stripe) typically reserved for venture capital funds and institutions, but investments are illiquid with 2-5+ year hold periods and no guaranteed exit mechanism before company IPO/acquisition.
Potential upside vs valuation risk
Pre-IPO entry provides exposure before public market access enabling substantial gains if companies successfully IPO at premium valuations, but late-stage entry at $10B-$200B+ valuations means substantial appreciation already captured by earlier investors—requires belief in multi-hundred-billion-dollar outcomes just for venture-style returns.
Diversification vs capital requirements
Multi-company funds offer instant diversification across 3-10+ holdings reducing single-company risk at $20K-$50K minimums, but investors sacrifice company selection control and transparency; building diversified portfolio of single-company funds requires $250K-$500K+ creating accessibility barriers for retail investors.
Lower minimums vs fee drag
Platform enables pre-IPO investing with $10K-$50K minimums (versus $250K-$1M+ for traditional venture capital funds) democratizing access, but 8-10% total transaction costs create meaningful performance hurdle requiring substantial appreciation just to break even—higher percentage fees than institutional venture capital 2/20 structure over long holds.
Professional facilitation vs limited information
EquityZen handles complex legal documentation, company ROFR negotiations, and SPV administration that individual investors couldn't replicate enabling participation, but secondary market structure means investors receive minimal company information disclosure and lack ongoing reporting, board access, or information rights that primary venture investors possess.
Who This Is Not For
Income investors requiring regular cash distributions or dividends
Pre-IPO investments generate zero income during 2-5+ year hold period—no dividends, interest, or distributions until exit event. All returns back-loaded to IPO/acquisition timing. K-1 forms may report phantom income triggering taxes without cash to pay them. Unsuitable for retirees or investors requiring cash flow.
Risk-averse investors seeking principal protection or stable returns
Single-company funds create 100% loss potential if company fails; binary outcomes unsuitable for conservative strategies. Private valuations opaque and potentially volatile. Historical returns range from total losses to 450%+ gains with no guarantee of positive outcomes. Not suitable for capital preservation.
Investors requiring liquidity within 1-3 years for known expenses
Investments illiquid with typical 2-5+ year minimum hold periods and no guaranteed exit. Cannot access capital for home purchase, education expenses, emergencies, or other near-term needs. Secondary sales unreliable. Time horizon mismatch creates inability to meet financial obligations.
Non-accredited investors not meeting SEC income or net worth thresholds
Platform strictly limited to SEC-defined accredited investors ($200K+ annual income, $300K+ joint, or $1M+ net worth excluding primary residence). SEC Regulation D private placements prohibited for non-accredited investors. No exceptions or alternative access paths available.
Passive investors seeking simple buy-and-hold index strategies
Pre-IPO investing requires active company research with limited disclosure, ongoing monitoring, K-1 tax complexity, and engagement with legal documents. Not suitable for set-and-forget investors preferring passive index funds. Requires due diligence capability and willingness to conduct research with incomplete information.
Investors unable to tolerate 100% capital loss on positions
Binary outcome risk means some positions will result in total loss—companies fail, are acquired unfavorably, or remain private indefinitely. Venture capital model expects many losses with few winners driving returns. Not suitable for investors requiring every position to generate positive returns or lacking emotional tolerance for substantial losses.
AltStreet Perspective
Verdict
Legitimate secondary marketplace providing accredited investors with unprecedented access to late-stage pre-IPO companies, but illiquidity, fee drag, and binary risks require careful suitability assessment
Positioning
EquityZen provides rare retail access to pre-IPO secondary market enabling $10K-$50K investments in late-stage private companies (versus $250K-$1M+ traditional VC fund minimums). Platform's registered broker-dealer status, 15-year track record, and 74% reported aggregate exit returns demonstrate legitimacy, but investment complexities require careful evaluation: (1) 2-5+ year illiquidity with no guaranteed exits creates capital lockup unsuitable for liquidity-dependent investors, (2) 8-10% approximate all-in transaction friction plus opportunity costs create meaningful performance hurdle requiring substantial appreciation for attractive risk-adjusted returns, (3) Binary outcomes where single-company positions can result in total loss—historical range from 100% losses to 450%+ gains indicates few winners drive aggregate returns masking typical investor experience, (4) Late-stage entry at multi-billion-dollar valuations limits upside versus earlier-stage venture capital, though also reduces binary execution risk, (5) Information asymmetry and adverse selection where investors buy from selling shareholders who may possess private information about challenges. Suitable for sophisticated investors with: 5-15% alternatives allocation enabling diversification across 3-5+ positions, $50K-$250K+ deployable capital, 5-10 year time horizons matching private equity lifecycle, comfort with total loss potential on individual investments, and independent research capabilities given limited disclosure. Compelling for accessing transformative companies (AI, space, fintech) before public markets, understanding substantial risks accompany high-upside potential. Not suitable for income seekers (zero distributions), risk-averse investors (binary outcomes), liquidity-dependent (multi-year lockup), or passive investors (requires active monitoring). Key consideration: secondary market structure means buying from sellers seeking liquidity rather than providing growth capital to companies—creates adverse selection risk absent in primary venture rounds. Best analyzed as speculative venture capital allocation for qualified investors with realistic expectations that past aggregate returns (subject to survivorship bias) do not predict individual position outcomes.
"Legitimate pre-IPO secondary marketplace with 74% reported aggregate exit returns; suitable for accredited investors with long horizons and loss tolerance, not for liquidity-dependent or risk-averse."
Next Steps
Verify accredited investor status—confirm you meet SEC requirements ($200K+ annual income, $300K+ joint, or $1M+ net worth excluding primary residence) before proceeding; verification process and documentation requirements vary by specific offering structure.
Review EquityZen Help Center documentation at help.equityzen.com covering investment process, fee structures, accreditation requirements, SPV mechanics, tax implications, and deal types to understand platform operations.
Create account and browse current offerings—deal cadence typically described as bi-weekly with specific timing varying by market conditions; review offering documents, company descriptions, and deal terms for available opportunities; note that many high-demand deals have waitlists.
Assess capital allocation strategy—determine appropriate alternatives allocation (typically 5-15% of investable assets), minimum number of positions for diversification (3-5+ recommended given binary risk), and total capital required ($50K-$250K+ for diversified exposure).
Conduct independent company research using external sources—media coverage, Crunchbase/PitchBook data, competitive analysis, industry trends, public market comparable valuations—to supplement limited offering document disclosure before investing.
Model return scenarios accounting for fee drag—calculate breakeven appreciation (8-10% hurdle), expected returns at various exit valuations, time-adjusted IRRs for different hold periods (2, 5, 7, 10 years), and impact of fees on net outcomes.
Consult tax adviser regarding K-1 reporting implications—understand partnership taxation mechanics, phantom income potential, multi-state filing requirements, QSBS eligibility considerations, and integration with overall tax planning.
Consider multi-company funds for initial exposure—$20K-$50K minimums provide instant diversification reducing binary single-company risk; suitable for investors testing pre-IPO asset class before committing to single-company positions.
Build position over time across vintage years—avoid concentrating investments in single market period; deploy capital across multiple years creating rolling exit opportunities and reducing exposure to specific IPO market conditions.
Establish realistic expectations about outcomes—understand that many positions will generate losses, some will produce modest returns, and few will generate substantial gains driving portfolio performance; accept 5-10 year illiquidity and uncertain exit timing before committing capital.
Related Resources
Explore Asset Class
Private Company Equity - Late-Stage Pre-IPO🔍Review Evidence
Scrape Date
2026-01-14
Methodology
Review synthesized from multiple source categories: (1) EquityZen platform materials (equityzen.com) including investor page, shareholder page, about page, institutions page, financial advisors page, and company pages; (2) EquityZen Help Center documentation (help.equityzen.com) covering investment process, fees, accreditation requirements, deal types, and FAQs; (3) Third-party platform reviews from FinanceBuzz (June 2025), BullishBears (October 2025), Fintorial (April 2024), YieldTalk (November 2025), TradingBrokers (July 2025), and MoneyMade; (4) SEC/FINRA regulatory records confirming broker-dealer registration; (5) EquityZen terms of service and legal documentation. Analysis focuses on investment structures, fee models, accreditation requirements, company selection criteria, historical performance disclosures, risk factors, regulatory framework, tax treatment, and investor suitability considerations.
Scope
Company history (founded 2013, leadership team), platform scale and transaction volumes, investment structures (single-company funds, multi-company funds, direct acquisitions), minimum investment requirements and enhanced access program, comprehensive fee structure and cost analysis, accreditation requirements and verification process, investment process from signup through exit, SPV/fund mechanics and legal structure, hold periods and exit mechanisms (IPO, acquisition, secondary sales), company ROFR approval process, historical performance data and outcome distributions, regulatory framework (SEC Reg D, FINRA broker-dealer, SIPC coverage), information disclosure limitations, tax treatment (K-1 forms, capital gains, QSBS considerations), risk analysis (illiquidity, binary outcomes, valuation, information asymmetry), and investor suitability framework across different profiles.
Key Findings
- •PLATFORM-CONFIRMED: Founded 2013 by Shriram Bhashyam, Atish Davda (CEO), Phil Haslett (CSO); operates through EquityZen Securities LLC registered broker-dealer (per platform about page and FINRA records).
- •PLATFORM-CONFIRMED: Scale metrics: 820K+ total subscribers, 450+ companies served, $1.5B+ distributed to shareholders, $710M+ distributed to investors, 50K+ private placements completed (per platform investor and shareholder pages as of 2025-2026).
- •PLATFORM-CONFIRMED: Investment minimums: $10,000 for enhanced access members maintaining $50,000 balance; $20,000 limited slots for multi-company funds on first-come-first-serve basis; $50,000 standard minimum for single-company funds (per platform terms of service and Help Center).
- •PLATFORM-CONFIRMED: Fee structure: 3-5% upfront investor fee (5% up to $500K, 4% for $500K-$1M, 3% for $1M+) charged on top of investment amount; 5% seller fee at transaction close; generally no carried interest or ongoing management fees (per Help Center fee documentation).
- •PLATFORM-CONFIRMED: 74% net aggregate exit return across exited investments (per platform investor page); represents survivorship bias excluding ongoing holdings and failed companies; individual outcomes range from total losses to substantial gains.
- •PLATFORM-CONFIRMED: Investment process details as described in platform materials (operational specifics may vary by market conditions and individual deals); company ROFR approval processes and transaction timelines vary by specific offering—review deal-specific terms.
- •PLATFORM-CONFIRMED: Accreditation requirements: $200K+ annual income ($300K+ joint) in prior two years with reasonable expectation of same, OR $1M+ net worth excluding primary residence; verification methods vary by offering structure (per Help Center accreditation page).
- •PLATFORM-CONFIRMED: Examples of companies featured on platform homepage include SpaceX, OpenAI, Anthropic, Stripe, Databricks, Anduril Industries, xAI, Perplexity, Groq, Figure AI, Lambda (per platform homepage as of January 2026); specific inventory varies based on shareholder supply and deal flow.
- •PLATFORM-CONFIRMED: Three investment structures: Single-company funds (standard and Express Deals), multi-company funds (Growth Opportunity and Thematic), and direct share acquisitions for $200K+ investors (per investor page).
- •THIRD-PARTY REPORTED: Historical returns range from 100% loss to 450%+ gains per FinanceBuzz and BullishBears analyses; distribution highly skewed with few winners driving aggregate returns.
- •THIRD-PARTY REPORTED: Typical hold periods 2-5 years though many extend longer as companies delay IPOs; 2018-2021 vintages remained illiquid through 2024 as IPO markets closed (per third-party analyses and market observations).
- •THIRD-PARTY REPORTED: SPV structure means investors receive LLC membership interests and annual K-1 tax forms rather than direct stock ownership (per YieldTalk and TradingBrokers reviews).
- •THIRD-PARTY REPORTED: Secondary marketplace liquidity unreliable—sales depend on buyer demand and company approval with no guarantees (per multiple third-party reviews and platform documentation).
- •THIRD-PARTY REPORTED: Platform focus on late-stage companies valued $500M+ with significant VC backing and perceived proximity to IPO/acquisition (per TradingBrokers and other reviews).
Primary Source Pages
- equityzen.com (homepage, investor page, shareholder page, about page)
- help.equityzen.com (investment process, fees, accreditation, deal types)
- equityzen.com/terms (terms of service including enhanced access program)
- FinanceBuzz - EquityZen Review (June 2025)
- BullishBears - EquityZen Review 2025 (October 2025)
- Fintorial - EquityZen Review (April 2024)
- YieldTalk - EquityZen Review (November 2025)
- TradingBrokers - EquityZen Review (July 2025)
- MoneyMade - EquityZen profile page
- FINRA BrokerCheck - EquityZen Securities LLC verification
Frequently Asked Questions
What is EquityZen and how does it work?
EquityZen is secondary marketplace connecting accredited investors with pre-IPO shares in late-stage private companies (SpaceX, OpenAI, Stripe, etc.). Existing shareholders (employees, early investors) sell equity; platform facilitates transactions through SPV structures. Investors purchase membership interests in LLCs holding company shares, receiving shares or cash when company IPOs or is acquired. Minimums $10K-$50K, fees 3-5%, hold periods 2-5+ years.
What are EquityZen's minimum investment requirements?
Platform-stated minimums: $10,000 for enhanced access members maintaining $50,000 balance (reduced minimums, early deal access, waitlist priority); $20,000 limited slots for multi-company funds (first-come basis); $50,000 standard minimum for single-company funds; $200,000+ for direct share acquisitions. Specific minimums vary by deal. Enhanced access requires maintaining $50K platform balance across investments.
What fees does EquityZen charge?
Investors pay one-time upfront fee charged on top of investment amount: 5% for investments up to $500K, 4% for $500K-$1M, 3% for $1M+. Example: $50,000 investment requires $52,500 wire. Sellers pay 5% fee at close. Platform typically does not charge carried interest or ongoing management fees on single-company SPVs; multi-company funds may have additional costs. All-in transaction friction can approximate 8-10% when including investor fees plus seller-side fees that may be reflected in deal pricing, creating performance hurdle.
How long do I have to hold EquityZen investments?
Typical hold periods 2-5 years until company IPOs or is acquired, but actual duration depends on company decisions and market conditions. Some investments extend 7-10+ years if IPOs delayed. No guaranteed exit timeline. Secondary marketplace sales possible but depend on buyer demand and company approval—unreliable liquidity. Only invest capital you can lock up 5-10+ years without needing access.
Who can invest on EquityZen?
SEC-defined accredited investors only: $200K+ annual income ($300K+ joint with spouse) in each of prior two years with reasonable expectation of same, OR $1M+ net worth excluding primary residence. Entity investors require $5M+ assets or qualifying status. Annual verification via platform questionnaire required. Non-accredited investors cannot access platform—no exceptions or alternative paths.
What are EquityZen's historical returns?
Platform reports 74% net aggregate exit return across exited investments, but this represents survivorship bias—excludes ongoing holdings that haven't exited, companies that failed entirely, and ignores time-value from multi-year holds. Third-party sources cite individual outcomes ranging from 100% loss to 450%+ gains with highly skewed distribution. Past performance not predictive of future returns. Many positions generate losses; few winners drive aggregate.
What companies can I invest in through EquityZen?
Platform features 450+ late-stage private companies including SpaceX, OpenAI, Anthropic, Stripe, Databricks, Anduril Industries, xAI, Perplexity, Groq, Figure AI, Shield AI, and hundreds of others. Focus on tech unicorns (AI, fintech, SaaS, defense tech, biotech) valued $500M-$10B+ with significant VC backing. Company availability depends on shareholders willing to sell and platform securing deal flow. Deal cadence typically described as bi-weekly with specific timing varying.
How do I exit my EquityZen investments?
Three exit mechanisms: (1) IPO—shares transferred to your brokerage account after lockup period (90-180 days typical), then tradable on public markets; (2) Acquisition—receive cash or acquirer shares per deal terms; (3) Secondary marketplace sale to other accredited investors (depends on demand and company approval). No guaranteed exit before company liquidity event. Some companies remain private indefinitely or fail without exit.
What are the main risks of investing through EquityZen?
Major risks: Illiquidity (2-5+ years minimum, no guaranteed exit); binary outcomes (100% loss if company fails); valuation risk (late-stage entry at $10B+ valuations limits upside); information asymmetry (minimal disclosure vs public companies); fee drag (8-10% transaction costs); company ROFR uncertainty (deals can fail after commitment); sector concentration (tech-heavy). Suitable only for sophisticated investors with long horizons and loss tolerance.
How are EquityZen investments taxed?
SPV investments taxed as partnership interests—receive annual Schedule K-1 forms reporting share of income/gains/losses even without cash distributions. Upon exit: short-term capital gains (ordinary income rates up to 37%) if held <1 year, long-term (0-20% preferential rates) if held ≥1 year. K-1 may report phantom income triggering taxes before receiving proceeds. Complex multi-state filing possible. Not suitable for IRAs/HSAs. Consult tax adviser before investing.