Investors with $5k can now buy shares in OpenAI

What’s private is becoming public, in a bit of news unrelated to leaked Signal group chats.

EquityZen and Forge Global, marketplaces for trading shares of privately held companies, yesterday announced a partnership with Yahoo Finance that will see the pair share data on ~100 pre-IPO companies––including SpaceX, Stripe, OpenAI, Liquid Death, Attentive, and Figma––with the website. The marketplaces also lowered their minimum investment threshold to invest in those companies from tens of thousands of dollars to $5,000.

Bridging the gap

Employees and early investors in startups often want to cash out their shares, but can’t sell them on an open market. And startups are staying private longer––the average company goes public today at 10.7 years old, compared with 6.9 years in 2015.

On the flip side, individual investors often miss out on VC-like returns, since earlier-stage investments often require six-or-seven-figure minimum investments and multi-year lockups.

• EquityZen and Forge Global act as facilitators between these two parties, compiling bid-ask data to provide up-to-date valuations and taking 2%–5% of each transaction.

There is some fine print. Anyone participating in a private-market deal must be an accredited investor, per SEC requirements. This means having a net worth of $1+ million (excluding a primary residence) or making $200,000 annually ($300,000 for couples). Roughly one in five US households qualify.

Proceed with caution…Private-equity investments underperformed public markets last year for the third time in four years, according to McKinsey.