Liquidity for Business Angels

Driving Liquidity for Business Angels

Sekondary stands at the forefront of innovation, facilitating liquidity and streamlining investment management for Business Angels. With our suite of optimized tools, we connect Business Angels to internal shareholders and a network of new institutional investors. Sekondary provides the foundation for strategic decision-making, effective investment management, and rapid access to liquidity.

Included Features for Sellers:

Portfolio Management Platform: Keep track of all your investments and monitor their performance in one place. Our platform allows you to add and manage all your portfolio companies. You can also generate sale offers straight away, making it a comprehensive tool for all your investment needs.

Tailored Liquidity Solutions: Whether it’s through internal shareholders or Sekondary’s expansive investor network, we provide Business Angels with the best opportunities to achieve liquidity.

Creation of Binding Offers: We enable Business Angels and shareholders to create binding offers, paving the way for seamless and efficient transactions.

Automated Communication Management: Say goodbye to tedious manual communications. We automate the process of notifying the company about the selling interests of Business Angels.

Efficient Rights Management: We streamline the process of communicating to shareholders about preferential acquisition rights, making it faster and more effective.

Legal Document Templates: To save time and avoid confusion, we provide legal document templates, making it easier to comply with the relevant laws and regulations.

Regulatory Compliance and Verification: With our KYC/KYB verification services, we ensure that all transactions are compliant with the regulatory requirements, providing a safe and secure environment for all users.

How it Works:

Greater Liquidity and Exit Opportunities: Sekondary provides a robust solution to the problem of limited exit opportunities that Business Angels often face. With our secondary market, Business Angels can easily sell their shares to internal shareholders or our network of validated institutional investors.

Simplified Deal Management: Dealing with the complexities of investment can be a daunting task for Business Angels. Our platform offers a comprehensive set of tools for efficient deal management, allowing Business Angels to focus more on their strategic investment decisions.

6 Steps for Effective Share Sales with Sekondary

A Guide for Business Angels

Step 1: Onboarding:

The Business Angel initiates their journey by registering on the Sekondary platform, providing necessary details. Our system conducts KYC/KYB checks during this process to ensure regulatory compliance. Once registered, Business Angels can create portfolios and generate sale offers.

Step 2: Engaging with Startups:

Generated offers are sent to the respective startup CEOs. The company then has two choices - to collaborate by sharing the offer with shareholders or not to engage. Regardless, if there's no internal interest, the Business Angel has the liberty to post the offer on our private marketplace.

Step 3: Activating the Marketplace:

Upon completing the above steps, Business Angels can list their offers on the marketplace. They need to provide essential details like the number of shares for sale, last round price, and the discount. Agreeing to provide accurate information under Reps & Warranties to potential acquirers is mandatory, holding the business angel responsible for any misinformation. Once offers are live, professional investors can start submitting their binding offers.

Step 4: Receiving a Binding Offer:

The actual power and decision-making process for a Business Angel kick in upon receipt of a binding offer for their equity stake in a startup. It presents a unique opportunity to consider liquidating your stake based on the potential returns from the offer and your assessment of the startup's future prospects.

Step 5: Exercising Pre-emption Rights:

After receiving a binding offer, the company communicates the offer to its shareholders who can exercise their pre-emption right. Accepted offers are forwarded to the company CEO, and internal shareholders registered on the platform are informed of the sales offer. They can then decide whether to exercise their pre-emption rights or not.

Step 6: Executing the Sale:

If internal investors cover the offer, the sale is executed. Our platform guides the involved parties through the transaction process. The sale is finalized in front of a notary to officially formalize the transfer of shares. If internal shareholders do not cover the sales offer, the business angel and the external buyer who signed the binding offer proceed to finalize the sale, again signing in front of a notary.

F.A.Q

How does Sekondary's model align with European regulations regarding secondary markets?

Sekondary operates in accordance with European regulations on secondary markets. Our platform is distinct based on two key features:

Exclusive Access: Our marketplace isn’t open to just anyone. Only entities that have been pre-qualified and verified by Sekondary can register and view the offers.
No Advisory Role: Sekondary doesn’t provide financial advice to buyers or sellers. We act as a bulletin board, facilitating contact between parties and offering templated documentation for transactions.

Does Sekondary focus on shares of publicly traded companies or only non-listed ones?

Our primary focus is on listing offers related to equity shares in limited companies, meaning non-publicly traded entities.

How do pre-emption rights work?

Pre-emption rights are a clause that allows current shareholders of a company to have the first option to buy new shares before they are sold to outsiders. When a Business Angel wants to sell their shares, internal shareholders are informed, and they have the opportunity to buy these shares first.

How does Sekondary handle the "Tag Along" when there's a purchase offer for a minority shareholder?

The “Tag Along”, allows minority shareholders in a company to sell their stakes concurrently with key or reference shareholders. At Sekondary, if a purchase offer emerges for a minority shareholder, it’s vital to review the existing shareholders’ agreement. Notably, in minor sales, such as those representing less than 5% of total shares, this right might not be applicable. If the agreement allows, other shareholders could opt to join the sale in proportion to their stakes. However, if more shareholders are keen on selling, the investor might not be willing to expand their offer, leading the initial minority shareholder to sell fewer shares than initially intended. At Sekondary, our focus is to maximize value for our users. If this situation arises, we’d conduct a comprehensive case analysis and adjust our commissions to ensure benefits for all parties involved.

What happens if I can't sell my shares to internal shareholders?

If you can’t sell your shares to internal shareholders, Sekondary will communicate the share sale to our external investor network through our marketplace. This way, we increase the chances of you being able to sell your shares timely and efficiently.