As the world grows increasingly digitized, from cryptocurrencies to the interconnectivity of social media platforms, it has never been more important to protect your data. In the wake of the catastrophic Equifax data breach , cybersecurity has become of the utmost concern for every day citizens. The cybersecurity market has grown to $120B, underpinned by an increase in the frequency and severity of cybercrime over recent years. As cyber threats have increased, though, legacy technology has become increasingly less effective at mitigating them. For a detailed analysis of the industry and the major players in this sector, please download the report here: EquityZen Cybersecurity Sector Report
Cybersecurity is poised to become a key challenge for the modern economy. A staggering 4B records were exposed to data breaches last year , including notable attacks on Yahoo (twice), Dyn and the Democratic National Committee. This number is expected to increase – Cybersecurity Ventures estimates cybercrime could cost the global economy $6T annually by 2021 , up from $3T in 2015.
As the business world is coming to understand, the old security models are broken and new tools are needed. As cyber risks grow, legacy technologies have become increasingly less effective in mitigating them. Several key changes are driving this trend:
Redfin (NASDAQ: RDFN), the Seattle-based tech-enabled residential real estate brokerage, completed its Initial Public Offering (IPO) on July 28, 2017. By providing investment access in the company pre-IPO in 2016, EquityZen’s platform allowed several qualified investors to achieve average returns over
3x in excess
of those of public market investors who continue to hold their shares.
EquityZen’s platform makes investment available in established, growth-stage private companies 2 – 4 years before the IPO . With private companies today taking, on average, over 10 years to go public compared to four years in 1999 , much more of a company’s growth occurs in the private markets. EquityZen’s platform can provide a massive advantage to private investors over those who wait until the company’s shares are available for investment in the public market. For a more detailed analysis, read the Redfin Case Study .
Note: returns from investments in Redfin are not necessarily indicative of returns achieved on all investments on the EquityZen platform.
Redfin has had a strong public markets debut. As of last Friday (Aug 4th), RDFN closed at $25.84 per share after pricing the IPO at $15.00 per share. However, the earliest price available to the typical public investor was the opening price on the first day of trading,
$19.56 per share
(the IPO Open price). Returns on an investment at the IPO Open price would be marked at 32% at recent prices but even investing at that price is theoretical, as it requires quick execution and some luck to invest right at the open. Such is the constraint of investing solely in the public market.
EquityZen breaks this constraint by allowing investors to access opportunities in growth-stage companies backed by premier VCs before they start trading on the NYSE or NASDAQ. In Redfin’s case, EquityZen’s platform enabled several investors to invest in Redfin in late 2016 at what amounted to a dollar-weighted average price of $12.00 per share. As a result, EquityZen clients are able to mark a 115% return at recent prices of $25.84, over 3x in excess of public market investors who continue to hold their shares.
Performance of Redfin Investments Facilitated via EquityZen Platform
Source: EquityZen, Yahoo Finance
As with all deals on EquityZen, the Redfin transactions were conducted with approval from the company – this means actual shares were transferred. Since shares are transferred, rather than synthetic contracts such as derivatives, EquityZen investors can rest assured that the transactions are above-board and without counter-party risk.
On the principles of building a trusted, secure, and transparent solution, EquityZen has
led the wave of Secondaries 2.0
. Building on top of these principles, EquityZen is proud to have conducted 2,000+ private placement transactions in 70+ pre-IPO tech companies, which are among the largest and most reputable private firms. In fact, one in three of the largest 50 unicorns (private tech companies worth over $1B) consider EquityZen a liquidity provider. EquityZen’s platform allows accredited investors unique investment access with a minimum investment of $20,000. If you are an accredited investor, you too can research investment opportunities.
Get started here.
(You can determine whether you are an accredited investor by going here . If you qualify, you can join 10,000+ accredited investors from 30+ countries who can access , research , and invest in private companies on EquityZen’s investment platform.)
Redfin Case Study
Redfin Path to IPO
|Source: Global Music Report 2017, IFPI|
|Source: Company Information|
|Cloudera's valuation was chopped in half between 2014 and 2017|
Leave your email for latest posts and commentary on startup economics.