SharesPost launches venture-backed index

Matt Bowman · March 3, 2010 · Short URL: https://vator.tv/n/e24

The “eBay of private company stock” is sticking pricetags on Facebook, Twitter, Tesla and more.

If you follow tech news, you’ve probably heard that Facebook was once valued at $15 billion, and that Twitter is worth around $1 billion. Normally, such estimations are impossible to make because they rely on information from financing rounds that usually remains confidential. It takes a leak or an investment from a public company for such valuations to make it out into the public.

SharesPost, a trading platform for private company stock, hopes to change all that with an index it's launching today that puts a pricetag on some of the biggest venture-backed private companies, based on data it gathers from the buying and selling of private company stock.

In the last two years, as private tech giants like Facebook and Zynga have chosen to declined to file for an IPO or be acquired (events that would let shareholders cash in their stock), some investors and employees have become anxious to sell their equity for cash. Afterall, we're going through tough times and lots of folks could use some real money.  Because of the demand for liquidity, the secondary markets for private-company stock became so active that they were organized into platforms like private-company stock exchange SecondMarket, and trading platform SharesPost. By organizing the secondary market transactions, these companies have become privy to the sale price of shares--and voila!: another way to value private companies has emerged: simply look the prices at which people are buying and seling the company’s stock.

SharesPost is now taking that data, averaging it with other available valuation data, and publishing an index of estimated values of some of the most well-known venture-backed companies. The index is launching with seven companies that have seen a lot of shares traded through the platform: Facebook, Linden Lab (the makers of SecondLife), LinkedIn, Serious Materials, Tesla Motors, Twitter and Zynga.

The index value of a company will be based on four types of figures: the dollar amount of the last stock purchase; the average of the current offers to sell and to buy company shares; valuations from research firms (the site has six firms signed up as partners and plans to bring on two more soon); and valuations from financing rounds (when available).

SharesPost says it has seen activity on the site accelerate in recent months. CEO Gregg Brogger says the platform has “connected buyers and sellers directly in the negotiations of more than $229 million worth of transactions and seen more than $300 million worth of posts to buy and sell.”

Brogger admits the valuations won’t be as perfect as those an investment bank like Goldman Sachs can produce for a public company, but he says they’ll be a lot better than guesses based on a company’s last investment round.

As the platform grows, the SharesPost plans to break out subindexes for sectors like biotech, infrastructure, and mobile.

The SharesPost Index is available here and requires a free membership to view.


Read more from our "Trends and news" series

More episodes

Related Companies, Investors, and Entrepreneurs

Zynga

Startup/Business

Joined Vator on

Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users.  Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist.  The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel.  Zynga is headquartered at the Chip Factory in San Francisco.  For more information, please visit www.zynga.com.

Serious Materials, Inc.

Startup/Business

Joined Vator on

Serious Materials develops and manufactures sustainable green building materials that dramatically reduce the impact of the 'built environment' on the climate. Our corporate mission is to address 1 Billion Tons of CO2 reduction annually through the use of our technologies.

Voted #1 at Cleantech Venture Forum XII and winner of the first Aspen Institute award for innovation in Corporate Energy Conservation, the company has also been recognized by TIME/CNN, Fortune, Business Week, AlwaysOn and more as one of the most promising green companies. 

We aim for breakthroughs in product performance, without requiring changes in customer behavior or in how products are used - thus speeding market adoption. 

Examples include:

  • EcoRockTM, a green replacement for standard drywall (coming in late 2008), uses virtually zero energy in its core production, resulting in zero CO2 emissions. The 35 billion square feet of drywall produced in the U.S and Canada each year represent a $6 billion dollar market opportunity.
  • ThermaProof super-insulating windows reduce heating and cooling energy use and emissions by 20-40%. Windows are a $20 billion dollar market in the U.S.
  • QuietRock soundproof drywall reduces material use, enhances livability, and supports denser, more sustainable urban construction. 

We currently manufacture products in Sunnyvale, California, Newark, California, Chicao, IL, Vandergrift, PA, and Boulder, Colorado,       . The company is driving to create thousands of cleantech jobs here in the U.S. Products are widely available through building products dealers in the U.S. and Canada. 

SecondMarket

Startup/Business

Joined Vator on

SecondMarket is the marketplace for alternative investments. It has become the online destination for accessing market data, building your investor network and transacting in assets such as private company stock, structured products, public equity and bankruptcy claims. SecondMarket centralizes and simplifies secondary market activity by connecting buyers and sellers, and providing world-class market and operations expertise. Since 2004, SecondMarket has brought together more than 75,000 individuals and institutions and completed billions of dollars in alternative investment transactions. SecondMarket is a registered broker-dealer and member of FINRA, MSRB and SIPC. For more information, please visit www.SecondMarket.com.

SharesPost

Startup/Business

Joined Vator on

SharesPost makes private equity liquid by efficiently matching buyers, sellers of private company stock and giving them the information, tools and process to make transactions easy and safe. At SharesPost you can download research reports and corporate documents for hundred’s of private companies, including Facebook, Twitter and LinkedIn. Plus, see prices from previous transactions. When you’re ready, connect directly with buyers and sellers of private company shares without brokers or their commissions. SharesPost provides you with automated contracts and integrated e-signature and escrow services to handle transfer restrictions like company rights of first refusal and help process your transaction.

Twitter

Startup/Business

Joined Vator on

What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests. 

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes. 

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet. 

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.

 

What's next for Twitter?

We continue to focus on building a product that provides value for users. 

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.

Related News