FOR tech startups, paying employees with shares makes sense. Young companies can reduce their bills and so preserve their capital; workers receive a payout which, although deferred and uncertain, is potentially far more valuable than their salary. But there is a hitch: tech firms are taking much longer to list. Their average age at initial public offering (IPO) has risen from four years during the dotcom bubble in 1999-2000 in America to 11 today. That leaves many workers pining for a payday. Inevitably, another bunch of tech startups is trying to develop a solution.

In the past, the only means of selling unlisted shares was via an informal broker, who could take months to find a buyer and charge a fee worth 30-40% of the transaction. More recently, demand for Facebook’s pre-IPO shares gave rise to a first wave of secondary markets; SharesPost and SecondMarket were the two largest players.

But the number of American unicorns—private firms valued at more than $1 billion—has since jumped, from 28 in 2013 to 96 today. New secondary-market players, such as EquityZen and Equidate, have emerged, closing deals within weeks and charging...Continue reading