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How do I sell my equity crowdfunding shares?

Equity Crowdfunding secondary market

As of February 2020, there still isn't a truly liquid market for equity crowdfunding. Seedrs have launched something that resembles one on their platform which is only open to their members. But there are platforms such as JP Jenkins, Asset Match and TheRightX that offer - we call a match bargain platform.

What is a Match Bargain platform?

A Match Bargain platform is simply an introduction/matching service. The seller markets their shares on a platform for sale and sets the price and the buyer then negotiates with the seller. This also can be done with brokers. The platform cannot execute the trade as they could start to become a fully functional exchanger which requires much more regulation.

The issue with match bargain platforms is that because of the hands-off approach they cannot advise whether or not the shares are valued at the right price. If they are regulated for financial promotions, they need to advise on the risks associated with unquoted companies and that the business that is being marketed is a legitimate enterprise.

Selling your equity crowdfunding shares

Selling your equity crowdfunding shares is difficult and the simple answer to this is you can't. Not unless you have a buyer, the company has a buyer or the company is listed on an exchange, or working with a match bargain platform. Even then it will depend on the shareholders agreement you have with the company. A secondary market place like JP Jenkins will advise the business on how to facilitate a match bargain service for investors but the management team needs to instigate this. 

If you are looking for a quick exit to realize a tax loss then speak to the Founders/Directors they really are the only people that can help. A friend of mine recently sold his shares back to the founder for £1. He invested £10k on EIS so he received £3k in the form of a tax credit. He had lost faith in the business and he could not see any exit in the future. He cut his losses and because he was out of the 3 year EIS period he was able to claim a £7k loss and received a tax rebate. 

NextFin is in the process of helping people to facilitate the sale of equity crowdfunding shares, if you are looking to sell yours, please contact us.

 

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. We recommend that you seek professional advice on any topic discussed.

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