Like some of the best startup success stories, Raleigh-based Equity Shift was founded based on the founders’ firsthand experience with a problem. Co-Founders Will Duckett and Tom Gordon formed Equity Shift in 2019 based on years of operating experience in private and public companies, seeing up-close the challenges both in raising equity capital—and in turning that equity into cash.
The hypothesis for Equity Shift came in the hopes that the two could build something that would have alleviated the problems they saw. Even beyond making it easier and more streamlined for companies to raise capital, Equity Shift aims to make private equity markets more efficient through process automation to help investors as well.
“I think all great companies start with great problems,” said Gordon. “The problem that we’re solving is a problem that affects a tremendous number of companies in the U.S. If we can conquer some of that, we would become one of the largest companies in the United States.”
Equity Shift’s software helps private companies simplify the process of raising money, managing ownership over time and ultimately selling those interests in a way that is beneficial to everyone, Duckett said. The company’s patented software platform allows companies to control transactional activity—fundraising, secondary transfers, vesting, awards, and more—in a way that has never been possible before.
Equity Shift also enables multiple ways for investors to monetize their private equity holdings at any stage of a company’s life cycle, rather than having to wait for an IPO or another low-probability traditional exit event to receive a payday. In exchange for these services, the startup charges both monthly and transaction fees.
After conducting more than 200 customer discovery interviews, Equity Shift now has two U.S. patents granted with more in the works and is in the process of obtaining regulatory licenses with FINRA (the Financial Industry Regulatory Authority) and the SEC. Equity Shift will also present at CED’s Venture Connect summit (March 23-25).
The angel investors who helped Equity Shift raise $1.63M saw the problems the startup is addressing firsthand themselves. In the big picture, Gordon said, Equity Shift will enable secondary trading of private equity.
“Because of the legal hurdles, the technical hurdles and other issues, they just can’t do it now,” Gordon said. “We’re going to unlock all that transaction activity.”
In just a few years, the co-founders believe, this will be a trillion-dollar market. Unlocking the money wrapped up in these private companies is a big vision not for the faint-hearted, but they believe Equity Shift is the right company to do it.
Says Duckett, “We’re democratizing access to private equity and making it easier for people to participate, and increasing the ability for freedom of movement.”
In their pursuit to professionalize the rules around private equity, Equity Shift hopes to become one of the most valuable private businesses in North Carolina—or even the “next unicorn.”
The pandemic did not slow Equity Shift down and actually provided opportunities to become more successful, Duckett said.
“During the time when everyone was paused and figuring out how their businesses would survive, we were able to sprint down this regulatory path to become better-prepared than we would have otherwise, without losing momentum to the others in our space,” Duckett said. “While everybody else was waiting, we were getting closer to them.”