Selling shares in a private company

golfman

I'm leaving my current job and I have share options that have vested that I have the opportunity to exercise should I wish.

I have asked if the board would buy them back and was told no. I would then have to find a private buyer for these shares. Is there any marketplace for these type of share sales? I don't want to/can't afford to just buy them at the strike price and sit on them and hope the company gets bought in the next 2-3 years. However, the recent fund raise valued the shares at 10X what the strike price is so I don't want to miss out on an opportunity either.

I was thinking of contacting HBAN and asking them if their network of investors would have an interest? Anyone got any other ideas?

Glenbhoy

golfman wrote: »

I'm leaving my current job and I have share options that have vested that I have the opportunity to exercise should I wish.

I have asked if the board would buy them back and was told no. I would then have to find a private buyer for these shares. Is there any marketplace for these type of share sales? I don't want to/can't afford to just buy them at the strike price and sit on them and hope the company gets bought in the next 2-3 years. However, the recent fund raise valued the shares at 10X what the strike price is so I don't want to miss out on an opportunity either.

I was thinking of contacting HBAN and asking them if their network of investors would have an interest? Anyone got any other ideas?

Sounds strange, it wouldn't be in anyone's interest for you to sell these shares to anyone else. Truth is minority interests are very limited in value to anyone outside of a company.
However, shareholders can make life awkward for a company, therefore it would make sense for all to tidy this up.
Depending on the size of the company and size of the shareholding, maybe an independent valuation by an accountant would make sense, if the value isn't particularly high, you may just have to take what you're offered.
Be aware there may be cgt payable on any gains above the annual exemption of 1270.

Sorry half sleeping earlier, what's strange is that the options don't lapse on leaving the company, that's unusual I believe.
You'll also most likely be liable to income tax on any difference between market value and strike price, which could be significant if the difference is 10x (at least that would probably mean there'd be no capital gain anymoreðŸ˜).

golfman

Thanks for the response.

They've no interest in buying them back off me because I think they know I wouldn't be able to find a buyer elsewhere. It is a very minor shareholding. My full allocation would have been around 2% however that would now have been diluted now with extra fundraising. Only 25% have vested so at best I've between 0.25%-0.5%.

daheff

what do you think the valuation of the shares are worth?

simplistically say company valuation is 10x EBITDA (it may not be depending on the sector)