Phil Haslett has been working to make private markets accessible since he co-founded EquityZen in 2013. As Chief Revenue Officer, he’s responsible for strategic growth initiatives, including EquityZen’s recent partnership with Addepar to display investment opportunities in its new Marketplace*, which helps provide pre-IPO investment access to a growing group of RIAs and family offices. From Facebook’s pre-IPO days and the “wild west” of liquidity, to Spotify and Slack’s direct listings, Haslett has been on the front lines of the pre-IPO market as it has evolved (and grown) over the past seven years.
We sat down with him to find out more about EquityZen and why now is an opportunistic time for private market investing.
Tell us a little about your company and how you partner with Addepar/Acervus Securities…
My fellow founders and I started EquityZen when we saw a need for greater access to the pre-IPO market. Companies were staying private longer than ever before (13 years on average) and creating a lot of value in the private markets. Over 475 companies globally have a private-market valuation above $1 billion. These Unicorns represent a tremendous amount of value locked up in the pre-IPO market. Ultimately, public market investors were missing out on this value, driving their need to tap the pre-IPO market. Creating private market access for both investors and shareholders has been our goal since the beginning.
We’re excited to work with Addepar to broaden access to pre-IPO investments for family offices and RIAs on the new Marketplace. EquityZen aims to make pre-IPO investments accessible to all accredited investors who see the value in private market investments and want to participate in that growth - so partnering with wealth advisors and families on the Addepar platform was a natural fit. It’s been rewarding to see how this message has resonated with Addepar’s clients.
What are some of the biggest challenges for investors and advisors in the pre-IPO market?
Historically, private markets have been very opaque with high barriers to entry and inflexible investment structures. The process to make direct investments has been time-intensive, inefficient, and difficult to manage. Also, advisors have been offered a “one size fits all” model that doesn’t account for the specific structuring and diversification needs of their clients. At EquityZen we’ve aimed to solve these problems by creating efficient investment processes and offering compelling and flexible investment options at scale.
How have you seen pre-IPO investing evolve?
At EquityZen, we’ve been really proud to make the pre-IPO research and investment process seamless for our clients. We’ve been able to remove major pain points to accessing this market and through doing so, have processed over 11,000 private placements in over 200 late-stage private companies, including over half of the top U.S. tech unicorns. It’s been exciting to see the continued growth in the pre-IPO market and the opportunity this is creating for more investors.
With the quickly shifting market landscape, what are your observations and reactions to what that means for pre-IPO investing?
Like most sectors, COVID-19 has had a big impact on the pre-IPO market. However, with volatility comes opportunity. We’ve seen investment opportunities at significant discounts compared to a company’s last round of funding. This has created an opportune investment environment for those with cash to invest. While not all private companies make good investments, those that are creating solutions for this “new normal” are poised to do well and are creating permanent changes to the industries they are disrupting. It’s a time of great change and we’re seeing some innovative companies step up as the solution providers of the future.
What are some top industry trends that you’re seeing right now?
Consumers are demanding access, compelling product and technological ease from any product they use, whether it’s Netflix or investment solutions. This is a trend that’s not going away. At EquityZen, we’ve always put the needs of our clients first and have focused on launching products that meet these needs. For example, our clients were looking for sector or theme-specific pre-IPO investment funds so late last year we launched our first thematic funds. This is now a core part of our product offering. We’re also working with RIAs to create custom investment vehicles for their clients. At EquityZen we’re excited to keep innovating and creating solutions for the shareholder, private company and investor clients we serve. By focusing on tech-enabled solutions, we’re able to do this in a scalable way.
For more information about Marketplace and our partnership with EquityZen, please reach out to firstname.lastname@example.org.
*Marketplace and its brokerage services provided by Acervus Securities, an SEC-registered broker-dealer and member FINRA/SIPC, an Addepar company. Acervus Securities, Inc. is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This article, and any attachments, is not an offer, or solicitation of an offer, to buy or sell any security or other product. The information provided is subject to change without notice.