Ownership
Know what each investor owns.
The custodian is the registered holder of the deposited shares. Investors hold the corresponding beneficial positions through securities-entitlement records.
Explore the ownership structure
For general counsel
Street: GC Information Sheet
Private company secondaries under Section 4(a)(7).
The questions behind
every secondary.
What is being sold?
Existing shares held by a current shareholder. The seller receives the proceeds; Street does not issue new shares for the company.
Who can participate?
Buyers must be accredited investors. The resale cannot involve general solicitation, and each transaction must satisfy the other Section 4(a)(7) conditions.
What must the issuer provide?
Reasonably current company, security, management, and financial information must be made available to prospective purchasers.
The secondary structure
Understand the structure.
Follow the transaction.
Transfers
Existing shares. A private resale.
A current shareholder sells existing shares and receives the proceeds. Street focuses on Section 4(a)(7) resales to accredited investors, without general solicitation.
Review the resale requirementsCompany authority
Company approval comes first.
The issuer approves the program, covered shares, and required consents. Any applicable investor ROFR or co-sale rights must be handled separately.
Understand transfer authority409A valuation
A trade informs the valuation.
A secondary price does not automatically become common stock fair market value. Your valuation adviser assesses the security, size, frequency, information available, and other relevant facts.
Review the 409A considerationsPrepare the legal review.
Company authorization
Confirm the covered share class, eligible shares, transfer restrictions, and required company consents. Handle applicable third-party rights separately.
Supporting material
Program authorization, cap table information, transfer consents, ROFR and co-sale provisions, and any required waivers.
Ownership and custody
The custodian is the registered holder of the deposited position; investors hold beneficial positions through securities-entitlement records.
Supporting material
The custody structure, account terms, and responsibilities for transfer agency, brokerage and execution, custody, settlement, and cash handling.
Section 4(a)(7) requirements
Buyers must be accredited investors, the resale cannot involve general solicitation, and each transaction must satisfy the other statutory conditions.
Supporting material
A current and complete issuer information package covering the company, security, management, and financial information, coordinated with the acting service providers.
Valuation and insider controls
Assess any 409A implications with the company’s valuation adviser. Company approval and accredited-investor status do not override insider-trading rules.
Supporting material
The security sold, transaction size and frequency, available information, and the company’s controls for material nonpublic information, trading windows, and insider participation.
Settlement and ongoing rights
Confirm the treatment of voting, distributions, corporate actions, settlement failures, and exit. Street does not guarantee redemption or liquidity.
Supporting material
The documented instruction process, applicable restrictions and account terms, and a company contact for corporate actions and legal questions.
Inside the information sheet
A practical reference
for issuer review.
Review the resale requirements, company approvals, ownership structure, and steps from onboarding to ongoing administration.
- 01Private resales
Existing shares and the resale pathway
What is sold, who receives the proceeds, and the conditions for a Section 4(a)(7) resale.
- 02Issuer review
Company approval and issuer information
The transfer perimeter, third-party rights, and the information prospective purchasers need.
- 03Ownership
Custody and the cap table
The registered custody position and each investor’s corresponding beneficial position.
- 04Process
How a Street secondary works
From issuer authorization through settlement and ongoing administration.
- 05Common GC questions
Providers, rights and exit
The acting providers, voting, distributions, corporate actions, and permitted ways to exit.
- 06Common GC questions
Secondary transactions and 409A
A secondary price is relevant evidence for the issuer and its valuation adviser to assess.
- 07Before launch
Insider controls and legal readiness
The controls, authorizations, information, and legal point person needed for a program.
For your company’s legal team
Review your program
with Street.
Work through company authorization, transfer rights, the Section 4(a)(7) information package, and the responsibilities of the acting service providers.
Discuss an issuer review
Review note
Identify each rights holder and confirm the required waivers.
General counsel