Unlocking liquidity: How Forge helps shareholders sell private shares
Key takeaways
- Private share liquidity is possible without an IPO: Selling shares in a private company doesn’t require waiting for an IPO—platforms like Forge facilitate earlier access to liquidity.
- Market demand varies by company: Demand for shares depends on factors like brand strength, recent funding and upcoming liquidity events--all of which can influence share sale price.
- Company approval may be required: Share sales may be subject to rights of first refusal (ROFRs), board approvals, or lock-up periods—Forge helps navigate these restrictions.
- Forge connects sellers with qualified buyers: With a deep network of institutional and accredited investors, Forge’s vast ecosystem increases the likelihood of finding the right buyer.
Navigating the private market can be complex, especially for those looking to sell shares in a company that hasn’t gone public. Whether you're an early employee, executive or an early investor, understanding the process and options that are available is key to making informed decisions. Forge, a leading private securities marketplace, offers a streamlined, transparent process for private company shareholders seeking liquidity. This guide breaks down what you need to know about selling private company shares on Forge.
Understanding liquidity options in the private market
Private company shares are not listed on public stock exchanges, which means they are liquid. This often means waiting for a liquidity event like an initial public offering (IPO), acquisition or tender offer. However, secondary market platforms like Forge offer an alternative: the opportunity to sell shares to qualified investors prior to these types of liquidity events.
Forge enables sellers to access a curated network of interested buyers, providing a pathway to liquidity that doesn’t depend solely on company-driven events. Depending on the company’s policies and market conditions, sellers may be able to execute full or partial share sales.
The selling process on Forge
The process of selling shares on Forge generally follows a clear series of steps:
1. Create a Forge account.
The first step in the process is to create a Forge account.
2. Submit sell interest.
After opening their account and completing an initial consultation, sellers submit an indication of interest (IOI) including the number of shares they wish to sell and a target price.
3. Matchmaking with buyers.
Forge uses its marketplace to match sellers with potential buyers. Buyers may include institutional investors, family offices or high-net-worth individuals.
4. Price Discovery.
Forge facilitates negotiations between buyers and sellers to agree on price, often based on recent funding rounds, company performance and share class.
5. Due diligence and documentation.
While investors and sellers should execute their independent due diligence prior to submitting an IOI, both parties undergo a formal due diligence process after agreeing on transaction terms. Forge provides necessary documentation and manages communication between both sides throughout the entire process.
6. Transaction closing.
The final step involves executing agreements, handling regulatory or internal company approvals, and transferring shares and funds. [Note that: sellers may incur fees when executing a sale.]
Understanding market demand
Not all private shares are in equal demand. Pre-IPO companies with strong brand recognition, in-demand technologies, recent funding rounds or upcoming liquidity events tend to generate more interest. Forge provides insight into current buyer demand and helps sellers understand the potential marketability of their holdings.
Higher demand can lead to faster execution and more favorable pricing. Conversely, limited demand may delay the process or require pricing flexibility.
Pricing private shares
Without a public share price, determining a fair valuation for private shares requires careful consideration. Forge assists in this process by:
- Providing data on recent secondary trades in the company
- Benchmarking against funding round valuations
- Considering market trends and investor sentiment
- Facilitating open dialogue between buyers and sellers
Price discovery is often iterative and may involve negotiation, especially if shares come with certain rights or restrictions.
Company-imposed restrictions and transfer approvals
Private companies may place restrictions on share transfers, which can either prolong the time needed to complete a transfer or outright block a transfer. Common restrictions include:
- Right of First Refusal (ROFR): The company or existing shareholders may have the right to match any third-party offer.
- Board or company approval: Some transactions may require explicit consent from the company’s board or legal team.
- Lock-up periods: Sellers may be restricted from selling for a certain period following and/or prior to a funding round or during IPO preparation.
Forge works directly with the company and the seller to manage these constraints, ensuring all approvals are secured before closing a transaction.
Why sell your shares through Forge?
Forge stands out for its advanced platform technology, robust infrastructure, deep investor network, and experience navigating the nuances of private security transactions. Sellers benefit from:
- Competitive, data-driven pricing guidance from Forge Price™. Forge Price is a derived, indicative price, calculated daily for hundreds of pre-IPO venture-backed late-stage companies—it synthesizes data from various sources, including secondary market transactions, recent funding rounds, and indications of interest on the Forge platform.
- Access to a large pool of institutional and accredited buyers.
- Streamlined legal and compliance processes.
By leveraging Forge’s marketplace, sellers can tap into liquidity without waiting for an IPO or acquisition event, potentially turning long-held equity into capital.
Summary
Selling private company shares doesn’t have to be an extended, complex waiting game. Whether you're looking to meet personal financial goals or simply realize the value of your equity, Forge offers a pathway to liquidity. With its end-to-end support, market insights and access to a broad network of qualified buyers, Forge helps shareholders navigate the private market with greater clarity, confidence and ease.
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.
