Items you will need
- Large amount of capital
- Affiliation with a private equity firm or contacts with those who own private stock options
- SEC designation of "accredited and sophisticated buyer"
Social networking has taken off in popularity, and the frontrunner at the moment is Facebook. According to CNN, Facebook currently has approximately 100 million users and continues to grow. Buying a piece of Facebook as an investment seems like a great idea, but you better have a lot of money and some contacts. Facebook is not currently a publicly traded company, although the investment community believes it will become a public company in the near future.
Research all available analytical data for Facebook. This may be difficult to find. Financial data will be required to establish current and future valuations on Facebook.
Establish a value for each option contract or share of stock. It is important to establish value before entering into negotiations with the option holder.
Contact a person who currently holds stock options. This will either be a current employee of Facebook or a person affiliated with a private equity firm who owns Facebook stock or stock options.
Purchase the Facebook stock or stock options at the agreed-upon price.
As of July 2009, employees are permitted to sell their stock to certain private firms who may resell those stocks. Currently, this is still out of reach for most investors.
Buying stock in private companies is not for the part-time investor. Because of SEC rules, the amount of capital needed, and the needed ties to private equity firms, this will probably be too difficult for anybody who is not a financial professional.
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