Are there market makers for unrestricted private stock?

Question

I own a sizable quantity of unrestricted founder’s shares in a privately held, well known and successful internet related company. I am interested in selling some of these shares but prefer to shy away from existing investors. Are there any market makers for private stock?

Answer 1

No. The concept of "making a market" only exists for public companies. In fact, when issuing private stock the SEC requires you to disclose that there isn't a "market" for the stock and that the investor may not be able to sell.

That said, you could sell the private stock to other qualified investors. This can be done with the help of online services such as www.gensx.com, through a private equity sale directly from you or via a network of venture capitalists, friends, family, etc.

Answer 2

I was tempted to just say "no." -- but the fact is that you can probably find someone who is willing to buy the shares. The fact is, though, that this is usually considered M&A activity -- not trading activity.

These shares are not going to be liquid, so anyone wanting to buy them will need to know more about the company & probably want to talk with the people running the firm -- meaning that existing investors are going to find out that you are selling shares.