Startup Exchange FAQ
Q: What is Startup Exchange?
A: The VentureBeat Profiles Startup Exchange is a simulated stock exchange for privately held startups. As the first prediction market for private companies, the Startup Exchange leverages the wisdom of the VentureBeat Profiles community to determine the valuation of companies in the exchange. The prices of the companies in the exchange represent the community's view on the valuations for these companies. Depending on whether our community members think the prices are too high or too low, they will buy or sell the stocks, which will change the prices accordingly. Each player in the Startup Exchange gets VB$100,000 to be invested in various startups in the exchange. Each player's portfolio value changes over time based on how well the player is able to predict the likely movement in price of the stocks in the exchange (or predict the likely valuation change of these companies). The goal of the exchange is to provide a fun way to aggregate the wisdom of our community to help determine the valuation of these companies.
Q: What does the price of a company mean?
A: The price of each company in the exchange represents the community's take on the valuation of the company. Each company in Startup Exchange has one million shares outstanding. If the price of Company A is VB$50, then it means the community currently values Company A at $50 million. Depending on whether you agree with the valuation, you would either buy or sell (short) Company A.
Q: How are prices determined?
A: The price for a given company in Startup Exchange is determined by the trades (buy, sell, short sell) for that stock, as well as a proprietary algorithm which incorporates other factors which should drive changes in valuation.
Q: Is there a commission for placing a trade?
A: We do not charge a commission for placing trades. You should feel free to trade as often as you'd like.
Q: Do I earn any interest on cash held in my account?
A: We do not currently offer interest for cash held in the account. The only way for a player's portfolio to increase in value is by investing the cash in companies that increase in value (or short sell companies that decline in value).
Q: Can I add a company to the exchange?
A: Currently the companies in the exchange are chosen by VentureBeat Profiles. We will periodically have "IPO's" to add companies to the VentureBeat Profiles Startup Exchange. You can suggest companies to be added to the exchange by emailing us at feedback[at]venturebeatprofiles.com.