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Why we built Notice
Why we built Notice
Updated over a week ago

What if I told you that there was a multi-trillion dollar financial market where nobody really knew what was going on, because there was no consensus pricing?

Imagine, for example, what the housing market would be like if there was no confidence in the price of a home. Would a buyer want to buy, or a seller want to sell, if neither could be comfortable the price was right? What would the conversation be like trying to get a mortgage, or a home equity loan? Who would take the risk of building new homes?

I can tell you exactly what that kind of market is like, because for years I worked as a placement agent in the secondary market for private, venture-backed pre-IPO companies. This private market — thanks to a yearslong trend of companies staying private longer, and attracting significant amounts of capital at high valuations — is huge, estimated to have an enterprise value of roughly 3.5 trillion dollars.

Remarkably, for a market that comprises some of the most sophisticated and innovative technology companies and investors on the planet, the actual process for anyone who wants to simply know the price of (let alone transact) shares of private companies is medieval. And, nobody really knows what’s going on.

Basic information about what private companies are worth, and whether and at what price their shares are trading, is predominantly a function of rumor and innuendo. It’s not unusual to see dozens of news stories in tech and business channels, every day, hypothesizing what the value of a given company might be, the value of a particular sector, or what the holdings of a given investment vehicle could be worth.

Clearly, there are heaps of problems for every participant in this market created by what is, at minimum, pricing data fragmentation, and more often, a total lack of pricing transparency.

What to do?

The answer to this question depends, in part, on your philosophical approach to distributing information. Where there is an information asymmetry, you can either build walls to maintain that asymmetry, or you can eliminate them.

My view? When you’re talking about a financial market, where maximum value and maximum benefit are interrelated, then data availability, confidence and transparency are foundational. And to me, that means ensuring everybody has access to better information.

This is why we built Notice.

The private market I spent years operating in as a broker was, and remains, opaque at best. Buyers, sellers, brokers and anyone else trying to provide services in the space have terrible information. Not only is the current price for equity in a given private company unclear, but so is the transactional machinery: the experience and credibility of brokers and service providers is also in question, because there’s no clear way to evaluate them or their claims about prices and capabilities.

So, first, we built a company on the belief that at minimum, providing accurate pricing information, to anyone who wanted it, was fundamentally the right way to influence the productive development of the private markets.

Second, we did not want to build an exchange, or a marketplace. Nor did we want to provide investment advice. There are great brokers out there, lots of sharp people with good advice, and there are already good marketplaces — in fact, several of them are Notice data partners, because our price information has value to them. The mission at Notice is to provide reliable information, and clear options for acting on it.

Third, it meant we had to offer people the best, most reliable, price: the Notice Price.

Right now, “pricing” in the private markets is a clumsy combination of hypothesis and hyperbole. Pricing rounds are important data, but over time, the information value of a pricing round decays (especially in fast-moving markets). Bids matter, and offers matter, but so do the underlying amounts, structures and the credibility and trading history of the party claiming to have those orders. It should also matter where the hundreds of reporting investors that own these companies mark them. Finally, pricing should also include and reflect the observable movements of peers and comparables in the public equity markets.

The weighted output of these, and other factors, is what sets the Notice Price apart.

SpaceX, Epic Games, Stripe. source:

SpaceX, Epic Games, Stripe. source:

To return to the point I made at the very beginning, the cost of confusion, given the size of this market, is difficult to calculate, but simply ask:

  • How many transactions happen at the wrong price?

  • How many transactions fail to happen in the first place because there is a lack of confidence in price, or a missed liquidity window?

  • How many financing rounds are mis-priced because there is no, or no good, information about where peers are trading?

  • How many funds fail to mark on a timely basis, or mis-mark their investments using bad information?

  • How many people make significant decisions for themselves and their families, negotiating compensation packages without the benefit of knowing the actual value of the equity underlying them?

  • How many products and services are either not offered, or are expensive, because banks and boutique lenders cannot accurately price collateral?

And that’s just the short list. There’s a lot that can be fixed with accurate, freely available pricing.

Notice has been operating quietly for some time now, refining our processes so that we can offer anyone interested what we believe is the best and most current price data in the market — bar none. We count 70 boutique investment advisory firms, marketplaces, and independent brokers as partners already.

Notice members have come to appreciate and rely on the breadth, depth, and integrity of our data, and while we’re young as a company, we believe — based on the clear need for, and value of, what we do — we’ve got a lot of room to grow.

We’re hoping you — and a lot of people like you — will benefit from Notice.

— Tyson Hendricksen

If you want to know what’s going on in the private markets, then create a free account. If you want to learn more about joining us as we endeavor to inform this massive market, then please check out our open positions.

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