Sandhill Markets - Robinhood for Private Markets

Company & Team Introduction

Sandhill Markets (formerly stonks.com) offers a platform for accredited investors to easily buy and sell shares of the top pre-IPO companies in the world. The high-growth startup was founded in 2020 by serial entrepreneur Ali Moiz @ali_moiz. Moiz has had numerous successful exits including Streamlabs, a podcasting software that allows streamers to broadcast their content to multiple platforms at once (Twitch, Facebook Live, Youtube Live) and customize streams with banners and widgets. Moiz is also a prolific angel investor with 75+ investments including Jar and JustPoint and understands the life-changing opportunities that startup investing can provide and set out to make it more accessible for everyone. Sandhill Markets team currently sits at ~25 employees and is headquartered in San Francisco, California.

Product Overview

After the company recently pivoted their product from stonks.com, a platform that connected founders and investors through online demo days due to the quality level of the startups. In startup investing a small number of outlier investments will create the majority of a fund’s returns, so having access to the absolute best companies is crucial. To fix this issue they introduced Sandhill Markets, a private market investment platform with tradable SPVs of the top startups in the world such as Stripe, Anthropic, SpaceX, OpenAI, Anduril, Epic Games, and more. Invest in startups without the massive investment minimums and don’t wait for liquidity events like an acquisition or IPO, buy and sell anytime on Sandhill’s platform.

Total Addressable Market

Sandhill has pivoted to a massive industry and is tackling it with a simple and unique value proposition. Estimates of the total addressable market for secondary startup transactions in 2023 is upwards of $130B, up from just $100B in 2021. Secondary transactions are high friction which deters a lot of sales with ROFR, laws, etc. Sandhill's easy-to-use platform could unlock a new wave of secondary investors and broaden the market as a whole with new liquidity and investment minimums.

Business Model & The Numbers

Just as Robinhood revolutionized the public markets with their commission-free trading model, Sandhill is now following suit for the private markets with the following business model:
- 0% management fee
- 0% transaction fee
- 0% SPV admin fee
- 0% carry
- $5K minimum investment (Well below the industry avg. typically 100K+.)

How do they monetize? A flat rate membership fee of $149 USD/month with a minimum 12-month commitment. Just one simple subscription, no hidden fees when buying or selling shares. Over $30M has been invested into some of the most groundbreaking companies in the world through Sandhill’s platform.

Traction

Sandhill has already built a strong brand and network through its former demo days. The company had 60 partners, over 1500 deals done, and 40k+ users, all organic with no paid marketing. With strong early demand for Sandhill and an engaged community with a social following of 28k followers on X and 6k on Linkedin will be invaluable to them while rebranding. The company has also done a fantastic job to quickly gain access to top-tier startups which are extremely difficult to get access to as a smaller investor/fund.

Competitors

Sandhill’s competitors are large traditional secondary platforms like EquityZen and Forge Global. EquityZen is a private company based in New York City with over 35,000 transactions completed through their marketplace. Forge Global (NYSE: FRGE) is publicly traded with a market cap of ~450M and ~60M in TTM revenue. Secondary transactions that take place on both of these platforms are high friction. Large investment minimums make it difficult for most to adequately diversify, ROFRs, impossible to access top deals, and the lack of liquidity ties capital up for potentially over a decade.

Deal Terms

Sandhill is backed by an all-star roster of Venture Capital firms including Andreessen Horowitz (Andrew Chen led the pre-seed/seed round), Floodgate (Mike Maples), Matrix Partners, Pioneer Fund and top-tier angel investors such as Naval Ravikant, Immad Akhund, Tim Chang, Howard Lindzon, and many others. The company has raised over $15M in funding to date.