TC50: ExchangeP to Bring Fantasy Stock Trading to Private Companies


ExchangeP wants to change the way you trade companies. Sure, you can do it with real money for public companies, but ExchangeP wants to let you do that with private companies.

The startup presented today during the Collaboration session of TechCrunch50. You can watch the video of its presentation here.

By default, each company will get 1 million outstanding shares and once users sign up, they will have $100,000 to spend on their investments.

Once the company is added to the listing, it can be traded in the market until a liquidity event — it enters the dead pool, moves to an IPO, or is acquired — occurs. It’s still traded for 30 days after that, at which point it will be removed from the exchange.

Right now, ExchangeP has 75 company listings and it said that it will add more as time goes by. Until then, users can sign up and the best performers each month will win cash prizes in an attempt to coax more people to the service and give them the incentive they need to help the market dictate the real value of the companies.

Expert Panelists

Roleof Botha:

“I think the key question is can you actually have cash at work here? From a consumer point of view, you can take advantage of greed and if you can make real money, people will want to use it. Secondly, people need real money to make it work for realistic valuations.”

Mark Cuban:

“Interesting idea, but wrong business. It never gets big enough for real money and a bunch of people will come in and you’ll make it bigger. Rather than being the business of supplying the tool for one niche, why not become a tool-set that provides exchange for anything? You can leverage what you have instead of hoping some of the things Roleof mentions will come true.”

Answer: “We thought this would be a good place to start because we don’t want to spill the beans on future plans.”

Don Dodge:

“You’re headed in the right direction if you pay money and can make money. I assume your business model is advertising, right?”

Answer: “Early stage targets are to collect eyeballs and generate advertising opportunities. This is a great niche, but it is a niche, and we can make premium fee for what people think about the data collected.”

Don Dodge:

“I was involved in 10 or 15 years ago on public companies and the business model was free to read, but pay to join and comment on other stocks.”