Selling public stock is one click. Selling private stock is a process — predictable when you know the steps, maddening when you don’t. A typical negotiated secondary runs like this.
1. Match and terms
Buyer and seller find each other — through a platform, a broker, or directly — and agree on quantity and price. Price discovery is the hard part: recent round terms, any available indicative pricing, and the share class all matter. The agreement is documented in a stock transfer agreement, not a trade ticket.
2. Company review and ROFR
Nearly all private companies restrict transfers. The company reviews the proposed sale against its bylaws and investor agreements, and frequently holds a right of first refusal — 30 days or more in which the company (or its designees) may buy the shares on the same terms. A ROFR exercise isn’t a failure for the seller; you sell at the agreed price either way. It does change who your buyer is.
3. Consent and documentation
If the ROFR lapses, the company consents to the transfer and paperwork finalizes: the transfer agreement, spousal consents where required, tax forms, and — for option holders — exercise mechanics that may need to complete first.
4. Settlement
Funds and shares move. In an organized process, money flows through escrow or a custodian and the share ledger updates only when funds clear — delivery versus payment, the same principle that protects public-market trades. Informal deals that skip this step are where fraud and failed settlements live. Security & Trust covers how settlement is protected here.
5. The ledger updates
The company’s cap table — today usually an electronic ledger — records the buyer as the new holder. There is no share certificate in a drawer; the ledger entry is ownership.
What the calendar looks like
Weeks, not minutes: ROFR periods alone commonly run 30 days, and consent plus settlement adds more. Sellers who plan for a one-to-three-month arc — and read their equity documents before agreeing to terms — have a very different experience from those who expected an exchange. If you’re the seller, For Shareholders walks through your side in detail.
Educational only. InvestNow is a demonstration platform. This page is general information, not investment, legal, or tax advice, and not an offer or solicitation of any security. Private-market investments are speculative, illiquid, and can lose their entire value. Consult a qualified professional about your circumstances.