A new service with a new model for funding private companies. "A new company has won approval from US regulators to serve as an online exchange for shares in private companies such as Facebook." (Financial Times)
Xpert Financial will be the first electronic exchange with formal approval from the Securities and Exchange Commission to deal in private company stock." Letting them bypass traditional venture capital financing." (Financial Times)
It's great that there are options to traditional models of funding as opposed to venture capital, which is having trouble as a business model. Late last year at a conference, some people were mentioning that venture capitalists would fund a company and push it until an IPO so the VC can gain their principle back plus profit -instead of the VC earning profit from their portfolio company generating revenue. Not everyone feels positive about Xpert or Facebook raising funding.
"Goldman SPV to sell Facebook to "hi net worth clients" at $50bn valuation? What could possibly go wrong? Ponziconomy: back with a bang!" - Umair Haque via Twitter @umairh
"Facebook & Goldman Sachs in a private deal only for the rich to make insiders rich? It doesn't feel right. Google did it much better." Bruce Nussbaum via Twitter @brucenussbaum
Source: See Financial Times for orgional article in it's complete context here.
Approval for Xpert to deal in private company shares, By David Gelles in Charleston, South Carolina Published: January 3 2011 22:03 | Last updated: January 3 2011 22:03 http://www.ft.com/cms/s/0/7a2040f2-1775-11e0-badd-00144feabdc0.html#axzz1A83CqsoJ