Equidity connects companies with investors

Like a Facebook for businesses, Equidity brings together late-stage pre-IPO companies and investors

These days, rockstar companies like Facebook and Groupon probably don’t have to try very hard to raise money if they so choose. But the stakes are a little tougher when you’re Facebook of 2008, or Groupon pre-Yuri Milner. You’re not a cute little fledgling early-stage startup anymore, but you’re not at that level of stardom where you can just pick up the phone and call a couple of people you know to let them know you’re willing to offer them a slice of the magic Facebook/Groupon pie. You’re an awkward tween who’s trying to muster up the nerve to ask a girl you like to prom even though you’ve never talked to her before.

For those companies, there’s now Equidity, a social network that connects late-stage pre-IPO companies with investors, which launched Wednesday.

CEO Mona DeFrawi developed the idea for Equidity based on her experiences in corporate development, fundraising, and investor relationship management. In the 1990s, DeFrawi was working with four companies who were either public or going public, and to help them establish the necessary connections, DeFrawi built an in-house sales and marketing platform for each—something that would normally be outsourced to banks and investment relations firms. Her idea turned out to be wildly successful, so she decided to expand it to allow businesses and investors to connect on a broader level.

The idea, she says, is to encourage a more open dialogue between private late-stage companies and investors. “Capital markets have shifted tremendously, structurally,” she said, explaining that hype coupled with a lack of hard information leads to inflated valuations and bubbles. “Markets are not efficient and there is asymmetric access to information—and a lot of people have made a lot of money off of this lack of information.” She politely declined to name names.

The site will work essentially like a Facebook for businesses and investors. Both late-stage pre-IPO companies and investors will be able to create profile pages and interact with one another, but the ultimate goal is information-sharing so that investors can invest wisely and securely—not haphazardly throwing their money at the next “It” company because “it’s so hawt right now!”

Of course, if Facebook was willing to post its financial data for the world to see, it would probably do so on Facebook. But DeFrawi explained that businesses will not be sharing their information with everyone, but with investors of their own choosing. Like Facebook’s privacy settings, businesses maintain exclusive control over who gets to view and access their information.  And, DeFrawi noted, if anyone is caught misbehaving on the site, they get the boot.

Equidity is open to companies from all industries. “What we’re interested in is companies that are growing jobs, creating new technologies, and adding to the quality of life,” said DeFrawi, who explained that Equidity will essentially be acting as an investment concierge for investors, connecting them with the companies that they are most interested in.

But relationships require more than just profiles and balance sheets. Relationships require in-person meetings, which is why Equidity is now accepting company nominations for its inaugural Economic Growth Stars Investor Forum, which will take place at the Rosewood Sand Hill in Silicon Valley on November 8-10. Investors can nominate their top favorite businesses, and companies can nominate themselves, to become one of the 50 top rising companies selected to take part in a series of one-on-one meetings with investors.

DeFrawi said that Equidity is in the process of raising a Series A round that it still open to investors. But she did not use her own platform. Because that would be silly.

Image source: Equidity.com