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Research Outline

Prepared for Tsur D. | Delivered March 1, 2020

Nasdaq Private Market

Goals

To determine whether investors can invest in Nasdaq Private Market and how, what are the registration and submission requirements for investors and the compensation models for each, as well as how the platform collects its fee. Additionally, to determine whether the platform allows investors to invest in funds, company stock, or both, and to determine whether the platform uses innovative technology.

Early Findings

The requested information about Nasdaq Private Market is very limited. Most of the information, like specific requirements for investors and companies, is only available upon request. Some information like the revenue and the market share is not available in the public domain because Nasdaq Private Market is a private company that is not required to publish financial reports. However, some helpful information about the company has been provided below.

Investing in Nasdaq Private Market

  • Investors cannot invest in Nasdaq Private Market (NPM) directly. However, Nasdaq Private Market is a subsidiary of Nasdaq Inc. Investors can buy shares in Nasdaq Inc., because it is a public company listed on the Nasdaq stock market (ticker: NDAQ)

Registration and Submission Requirements for Investors

  • NPM allows the registration of both institutional investors and individual investors. Individual investors need to have at least $5 million in investable assets.
  • All investors that want to invest their funds through the Nasdaq Private Market need to be accredited investors, according to US law.
  • All other specific information about the registration and submission requirements is only available upon request. The contact form can be found on the right-hand side of this page.

Nasdaq Private Market Fee and Revenue

  • Nasdaq Private Market does not disclose its fee structure or investor compensation structure. Since it is a privately held company, it also does not disclose its revenue. The only disclosed figure is the transaction volume processed since the inception of the platform, which is $24 billion.

Investing in Funds and Company Stock

  • Nasdaq Private Market allows investors to invest in private funds and in shares of private companies. However, NPM positions itself by offering "liquidity solutions" to general partners of funds and to private companies.
  • NPM signed a partnership with iCapital to offer "liquidity solutions to advisors and their high-net-worth clients" for iCapital sponsored funds.
  • One of the key services that Nasdaq Private Market offers to private companies is allowing those companies to create auctions for their secondary shares. NPM currently supports Dutch auctions, buy-side auctions, seller IOI auctions, and English auctions. The platform also allows each private company to customize auction parameters like price floor/ceiling, timing of bids/asks, seller eligibility, and availability to existing or new buyers.

Innovative Technology

  • Nasdaq Private Market creates and uses auction funds, a financial innovation that provides liquidity for private investments.
  • Auction funds are a part of the NPM auction system, which can be accessed only by qualified financial professionals. More details about the NPM auction system can be found in this document.