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Investor Connect Podcast

Investor Connect is for investors interested in learning more about investing in startup and growth stage companies. Experienced investors share their experiences and advice with those who are considering an investment into startups and growth companies. It includes a podcast series of interviews with investors to inform others about the process of funding startups as well as a resource list and a discussion board.  

Topics include sourcing, analyzing, and researching companies. Other topics include valuations, terms Sheets, board of directors, board of advisors, due diligence, syndicates, venture capital, angels, angel networks, family offices, crowdfunding, exits, and more.

Investor Connect is a community program. We welcome your suggestions for speakers and topics which you can send to us through the Contact page. No registration is required to use the resources.  Discussion boards are available to post and answer questions about startups and growth company investing through which registration is required.

Investor Connect is a program under the Texas Open Angel Network which is a 501(c3) non-profit dedicated to the education around startup funding.

Disclaimer: Hall T. Martin is the Director of Investor Connect which is dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Jun 27, 2023

Challenges in Secondary Sales

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There are several obstacles to overcome in completing a secondary sale.

Here are some challenges to consider:

Board approval -- In many cases, the company must approve any founder shares being sold. 

Right of First Refusal -- companies that have raised funding have Rights of First Refusal on any offers of stock sales.   The company must sign off those rights to allow others to purchase the shares.

Co-Sale Rights -- Investors may have Co-sale rights which require any purchasers of the company's stock to purchase an equal amount from the investors.

Corporate Laws -- some states have regulations around the re-sale of the company's stock.

Transfer restrictions -- some companies have restrictions on the transfer of stock and must approve any transfers.

409A valuation issues -- the company uses a 409A valuation to set the price for employee stock options.  Any secondary sales of the company's stock above that 409A price may increase the 409A valuation impacting the price of employee stock options.

Review these issues before pursuing a secondary sale.


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.


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