I recently read a post in http://www.startupdunia.com/ about an idea on buying or selling of stocks in early stage companies. The post really got me thinking.. at first I thought it was a good idea… but then as I read on I couldn’t agree more with the writer. Often employers in start up lure great talent with stock in terms of percentage. How would you know what the stock is worth? Leaving large Pvt Ltd companies aside… Isn’t it useless unless it’s listed? If the company gets funded… wouldn’t that determine the worth of the stocks held? But if it did wouldn’t we get to know the companies’ evaluation and the stock diluted to the VC firm? which is usually a well kept secter? Lets say even if there was a model where you could buy and sell such equity.. how would the trading happen in percentage stocks or in numbers? if its in percentage, and the company is doing well wouldn’t the price per percent go sky rocketting? Personally, I think it’d be ridiculous if I were trading 0.0001% shares in any company. Lets say it was in whole numbers. How and by whom will it be decided that the company has to have ‘x’ amount of shares?
However I think its a good idea to have such a market place for large Pvt Ltd companies. Probably it could simplify the investments process.
