Exchange operator Nasdaq has today launched a US private equity market to help non-listed companies raise capital and prepare for IPOs on its main market.
Nasdaq Private Market lets companies raise capital and facilitate secondary transactions through a broker-dealer subsidiary and alternative trading system. Institutional investors will be able to access capital on the platform through broker-dealers connected to the platform.
In a statement, Nasdaq said it hoped the market would act as a first step towards an IPO on its public exchange through links to institutional investors.
“Nasdaq Private Market gives entrepreneurs more flexibility in deciding if and when to go public,” Bruce Aust, chairman of the Nasdaq Private Market board, said.
“By obtaining interim liquidity relief, companies can choose to enter the public markets based on the needs of their business and with the proper corporate solutions and institutional investor relationships in place for a seamless transition,” he said.
Companies active on the platform can set what percentage of shares can be sold, which can act as an iterative step towards large-scale institutional investor holdings.
“By establishing a regular dialogue with investors over the platform, private companies can efficiently build relationships over time with those institutions they are targeting as purchasers in their eventual IPO,” the Nasdaq statement read.
“Private companies can also enhance their IPO operational preparedness by migrating to the integrated equity management solutions they will need as a public company.”
Nasdaq is the majority owner of the platform, which began as a collaboration between the market operator and private equity firm SharesPost.