How do I make a return on investment (ROI) or sell my CSF shares?
Investing in private and unlisted companies is typically a medium to long-term investment. Shares in these companies cannot be easily transferred or sold and they are not traded through public exchanges (i.e. ASX). Due to this, your shares are generally considered to be 'illiquid' so you may not be able to sell your shares quickly if you need the money or decide that this investment is not right for you.
However, there are numerous possible circumstances that may create an opportunity for you to "exit" your investment (i.e. sell your shares) or otherwise receive returns. Such as:
a trade sale of the company to another company
the company proceeds with an Initial Public Offering (IPO) and listing on a registered stock exchange (e.g. the ASX)
the company organises a buyback of the shares
a private sale of your shares to another person
the company pays shareholder dividends.
Not all of these options may be available to you and these options vary between companies. For information on selling your shares, other exit opportunities or dividends, please refer to the company's Constitution, the Offer Document and reach out to the company directly to access the most up-to-date information.
It is also important to note, investors are not able to sell shares acquired under a CSF offer within the first 12 months of their issue without preparing a prospectus or other disclosure document, unless an exemption under s708 of the Corporations Act applies (e.g. sales to sophisticated or professional investors) or ASIC makes an exemption. To find out more about the rules around CSF, head to ASIC RG 261 and speak to a professional advisor.
How do I track the value of my shares?
As this is an investment into a private company, your share price will be the same price as the day you purchased the initial stock until the company undergoes a re-valuation event. An 'event' may take a couple of years to occur, for example when the company looks to raise further capital, prepare for a sale or list on the stock exchange. Each company is unique, so you should review its constitution and offer document to get an idea of what governance arrangements are in place should one of these events occur.
As shares in private or public unlisted companies are generally considered 'illiquid' and not listed or traded on an open market like the ASX, public information about the performance of the company is not always readily available. The first step is always to contact the company to learn when they will be releasing their next investor update and if they have a current valuation of the business.
Moneysmart has also provided a guide on "Keeping track of your shares" that can help point you in the right direction - although this guide is mostly directed at listed company shares there are useful tips to keep track of unlisted companies as well.
If you are still unsure or want to learn more about investing, we recommend you talk to an accountant, financial adviser or another professional advisor to help you understand your unique circumstances.
How do I get informed about the performance of the company?
Companies should provide investor updates to all shareholders on the performance of the company at least twice per year.
If you believe you've missed an update or believe the company is not providing investor updates - please first reach out to the company using our guide below:
If you don't hear back from the company in a timely manner, let us know by emailing [email protected]