Private-market financing guide

Pre-IPO and restricted-share financing

A diligence and lender-comparison framework for shareholders evaluating finance against private-company or transfer-restricted securities.

Answer first

How do you find and evaluate financing against pre-IPO or restricted shares?

Begin with the security and its legal transferability. A credible financing request documents ownership, issuer rights, restrictions, valuation, liquidity, existing liens, borrower recourse and repayment. Suitable lenders can then be screened by structure, jurisdiction, advance rate, pricing, control rights and downside protection.

Underwriting gates

What determines financeability?

Verified ownership

Chain of title, beneficial ownership, custody and existing liens.

Transferability

Issuer rights, ROFR, lock-ups, contractual restrictions and required consents.

Value and liquidity

Pricing evidence, concentration, exit routes and downside scenarios.

Enforceability

Jurisdiction, security control, remedies and specialist legal analysis.

Term	What to compare	Downside question
Advance rate	Initial proceeds against eligible collateral value	How does it change after a valuation decline?
Recourse	Borrower, guarantor and collateral exposure	Which assets and parties remain liable?
Valuation	Source, frequency and lender discretion	Who determines a margin-call event?
Control	Custody, pledge, transfer and issuer interaction	Can the security package be enforced?
Economics	Interest, fees, warrants, prepayment and default pricing	What is the all-in cost under delay?
Exit	Maturity, refinancing, secondary sale or liquidity event	What happens if the expected exit is postponed?

Financing review

Assess the security before approaching lenders

Provide issuer, ownership, restriction, valuation, jurisdiction, financing amount, use of proceeds, timing and available legal documentation.

Discuss the financing route

Questions, answered

What decision-makers ask

Potential structures depend on ownership evidence, transfer restrictions, issuer rights, enforceability, valuation, concentration, liquidity, borrower recourse and jurisdiction. Availability must be confirmed with suitable capital providers after diligence.

Expect verified title and chain of ownership, issuer and security details, transfer documentation, valuation support, restrictions, existing liens, borrower information, use of proceeds, repayment source and legal analysis.

Compare advance rate, recourse, pricing, margin calls, valuation rights, custody or control, transfer remedies, covenants, maturity, prepayment and enforcement terms using one downside-tested model.