How long does it take to sell private shares? Understanding liquidity timelines
Selling private company shares—whether as an early employee, founder or investor—can be a rewarding but complex process. Unlike public stock trades, which can be executed in seconds, private share transactions can require navigating legal, financial and company-specific processes that can take weeks or months to resolve. Understanding how long it takes to sell these shares is crucial for planning liquidity initiatives, tax strategies and personal financial goals.
This overview explores the typical timelines involved in secondary transactions and how platforms like Forge help streamline the process.
The nature of private market liquidity
Private shares are inherently less liquid than their public counterparts. Unlike public equities, which can typically be sold quickly on stock exchanges, private shares often involve longer processes due to factors that include company approval requirements, limited buyer pools and regulatory considerations. These factors can contribute to extended timelines for selling private shares.
A typical timeline for selling private shares
With Forge, once a buyer is matched with a seller, the transaction process—including documentation and company approval—typically takes about 45 days or less. However, this timeline can vary based on several factors, including the issuing company's policies and the complexity of the transaction.
Key factors that influence transaction timelines
1. Issuing company approval of the buyer
Most private companies have right of first refusal (ROFR) policies, allowing them an option to purchase shares before they are sold to external buyers. Also, some companies may require board of director approval(s) for share sales. Obtaining company approval can add time to the transaction process.
2. Buyer matching
Finding a buyer willing to purchase private shares at an agreeable price can take time, especially for less well-known companies. Forge’s platform aims to facilitate this process by connecting sellers with an extensive network of potential buyers.
3. Documentation and compliance
Once a buyer is found, completing the necessary legal documentation and ensuring compliance with securities regulations can add to the timeline. This step is crucial to ensure that the transaction passes legal scrutiny.
How Forge facilitates the process
Forge provides a platform for buying and selling private company shares. The selling process involves creating an account on the platform, listing the shares for sale and working with Forge to find a buyer. You can further leverage Forge Price™—a derived, indicative price that is calculated daily for approximately 200 pre-IPO venture-backed late-stage companies—to provide trading insights and help inform your pricing decision(s). Once a prospective buyer is matched, Forge assists with the necessary documentation and obtaining company approval, aiming to complete the transaction in approximately 45 days or less.
Final thought
Selling private shares doesn't happen overnight—but with the right tools and support, it doesn't have to be an overly arduous, long-term process either. While timelines can vary depending on factors like company policies, buyer interest and regulatory requirements, platforms like Forge help bring greater clarity and efficiency to the process. By connecting sellers with a broad network of potential buyers and assisting with transaction logistics, Forge helps reduce friction and improve the speed of private share transactions. For those looking to unlock liquidity from their private holdings, understanding the journey is the first step—and Forge is here to guide you through it.
About the Author
Jay Manciocchi is a marketing and communications professional with experience in content marketing operations, digital marketing and event strategy. He most recently led these functions at BMC Software. He holds a JD from New England Law | Boston and a BS in Political Science from Northeastern University. Read more from Jay.
