Morrison & Foerster Discusses Buying Shares of Private Companies from Existing Shareholders

Investments in private companies by way of share purchases from existing shareholders (secondary transactions) raise a unique set of complexities, which are often overlooked. Share issuances in company-led financing rounds (primary issuances) grab most of the headlines. However, secondary transactions present important opportunities for purchasers and paths to exit for existing shareholders, and they often mark a milestone for the company itself. At the same time, a purchaser can feel that it must walk a tightrope to diligence and structure and complete a secondary transaction – although, upon closer review, there is often significant room for negotiation and … Read more