Secondaries platform EquityZen has issued a note marking 11 years of offering multi-company funds to investors.
EquityZen specializes in powering a marketplace for private securities – firms that have yet to pursue an initial public offering.
While pretty promotional, the public note has merit as early-stage investments tend to be more risky, and EquityZen does offer a path for mitigating this risk.
Typically, a portfolio is designated as diversified with around 30 different equity investments. In reality, diversification kicks in at a far lower count. EquityZen’s private securities funds hold from 5 to 25 different companies, and the funds’ life ranges from five to seven years.
While touting that more than 125 companies have been included in past funds, with many going public, EquityZen does not share individual fund performance. Hopefully, going forward, EquityZen will share individual fund performance.
As policymakers are taking a good, hard look at opening up private markets in the US, we may be seeing more of these types of offerings in the not-so-distant future.
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