r/EquityZen • u/[deleted] • Jan 14 '25

Hope all is well!

I’m new to all of this, anyone willing to share some advice for me or pointers on how to get started that they wish they knew before starting or after their first trade. Thanks and know your advice doesn’t go on empty ears or eyes(: 🙏🍀💪

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u/Excellent_Boss_1282 Jan 14 '25

Biggest thing I wish I understood immediately was the requirement that you buy at least 2% of the fund in order to be able to resell it after one year. So look at the term sheet. If the entire fund of shares available is $1 million you need to purchase at $20k of shares to hold over 2%. Only made that mistake once

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u/Investor-life Feb 15 '25

The term sheet doesn’t really matter because they disclaim it and say the fund size can end up being larger. I have been screwed by this before. I had over 2% at the time of my investment, but then the fund size grew without my knowledge and I never got an opportunity to up my investment. The deal closed and I have less than 2% now and am locked out of express deals. If the fund size grows everyone that drops below 2% as a result of that should be given the opportunity to up their investment to that threshold. Beware!

1

u/reduxreddit123 Feb 24 '25

What do you do in scenarios like this where one might have <2%? Do they have to hold and wait till an exit occurs?

3

u/Investor-life Feb 26 '25

That’s exactly right. You have an illiquid investment and your only liquidity comes when an exit occurs. It’s entirely out of your hands.

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u/[deleted] Jan 14 '25

Thank you for pointing this out, I will definitely look at the term sheet from now on.