EquityZen Users Community/ EquityZen F.A.Q.
How to register on EquityZen: an article to help individual investors
The basics about registering on EquityZen
What is EquityZen? EquityZen is a platform that helps private equity buyers and sellers find each other.
Is EquityZen legit? According to the official website, here is the real entity of EquityZen Inc., and EquityZen Securities LLC, which is a subsidiary of EquityZen Inc. and exists as a broker/dealer registered with the Securities Exchange Commission and is a FINRA/SIPC member firm.
In general, the official EquityZen website has everything you need to get started on the secondary market as a seller or a buyer: responsive support, comprehensive FAQ, official documentation, etc. But it may take too much time for an investor to study all these materials in detail!
Thus, in this article, you will find everything to successfully register as an investor on EquityZen: from the necessary conditions to the description of each step of registration on the platform.
Self-study of all official documentation is necessary for an investor, so I strongly recommend you to do it at the first opportunity. But as a quick way to start your acquaintance with EquityZen, this article will definitely help!
General information about the user
Account registration on EquityZen begins with filling out general information about the user. At this stage, the user notes whether they are an investor (buyer) or a seller of shares in private companies.
This step also involves filling out email information, creating a password and confirming and verifying the account.
After that, you need to read and agree to all basic EquityZen platform documentation: Privacy Policy, Terms of Use, CRS Form, Additional Disclosures.
This article will look at EquityZen user registration as an individual investor.
Confirmation of accredited investor status
The second stage of account registration is to set up the investor’s account. Before that, the investor receives a pop-up window with the following information:
“To participate as an investor on the EquityZen platform, you must be an accredited investor under U.S. securities laws. International investors can invest, but they must also be accredited investors…”
What is an “accredited investor”? Let’s figure it out!
An accredited investor is any individual who:
- Has an annual income in excess of $200,000 (or $300,000 for a couple) in each of the previous 2 years and reasonably expects the same income for the current year.
- Has a net worth (less the value of the primary residence) of more than $1 million.
EquityZen minimum investment is $10,000, so some people considered these requirements too strict.
Back to registration process
To register as an investor on EquityZen, you must meet these conditions.
Individual investor is a person who is an individual or a legal entity and manages their own money as they like, following their own interests (Collinsdictionary)
Institutional investor — companies or their associations that accumulate funds of smaller participants for the purpose of making a profit by investing in financial markets (Investopedia)
There are only three correct answers to the question, “Are you an accredited investor?”:
— My net, or my joint net worth with my spouse, exceeds $1 million, exclusive of the value of my primary residence.
— My individual income exceeded $200,000 in each of the past two years, and I expect the same this year.
— My joint income with my spouse exceeded $300,000 in each of the past two years, and I expect the same this year.
Filling out the questionnaire: matching the investor profile
After confirming the status of an accredited investor, the EquityZen platform offers to fill out a questionnaire that determines the investor’s investment strategy.
It is important to understand that venture capital investment is always a risky business; therefore, the more investment experience an investor has (preferably 2 years or more), the more risk they are willing to take (at least significant risk), the longer they are willing to hold the investment (5 years or more), etc., the better the EquityZen platform will evaluate the investor’s account. The chance of passing all the checks will be higher for the account!
In addition, here, the investor will need to read and understand the risk factors and read and agree to the confidentiality agreement.
Customizing your investor profile
The last step in registering on EquityZen is to set up an investor profile. It is important for the EquityZen platform to understand how much and where the investor invests and what their personal interests are.
Here, there are such questions as “How do you invest?”, “Which sectors are you interested in?”, “How much do you expect to invest in pre-IPO companies in the next year?”, etc.
If your personal interests and investment conditions change in the future, you can always reconfigure your investor profile on the “Account Settings” page and once again receive offers that are relevant to you.
Great! That completes the basic EquityZen account registration!
Don’t forget to verify your account with a letter from EquityZen in the email.
During the verification of the new account (the first 1–2 weeks), investors do not see deals and do not participate in investments!
The first participation in a deal
When an investor first takes part in a deal on the EquityZen platform, they are asked to fill in the boxes once:
- Name
- Type of investment profile (investor or seller of shares)
- Individual or institutional investments
- Citizenship
Next set of questions includes:
- Address
- Bank information
- Investor profile (investment plans and preferences)
4. Matching the investor profile (risk understanding and strategy)
5. Status (individual investor / qualified buyer / trusted contact person)
Here are a few points that you should pay attention to:
- Bank information
It is necessary to specify the details of the bank through which you plan to transfer funds for the deal. - Status
Indicate whether or not you are a qualified buyer, whether or not you have a trusted contact person, etc. - Correctness of answers
As an example, there are screenshots showing different answers to the questions (it should be said that these are good answers for an individual investor’s account).
All of these questions have already been encountered in the basic registration on the EquityZen platform (investor profile, matching the investor profile, general information). Fill them out carefully according to your investment plans, preferences, strategy, etc.
Conclusion
Registering on the EquityZen platform is easy! The main things are: to meet all the necessary conditions, to fill out the general information correctly, to be an accredited investor, to be suitable for the EquityZen platform (your investment experience and risk level are evaluated) and to be careful with your investor profile (investment plans and preferences).
Hope this article has helped you understand the question, “How does an investor sign up for EquityZen?” and “How to register on EquityZen?”.
The answers on “How to invest in EquityZen?” and “How does EquityZen work?” are in the relevant articles.
As a reminder, you can join the discussion of EquityZen’s current deals and market situation in the closed Discord group:
Don’t say goodbye!
Have a good investment!
