- SecondMarket continues to dominate trading in the private stock market, trading almost 4 times more in 2014 than all of 2013. - Private stock trading this year is expected to total over $17 billion, nearly 30 times more than a decade ago and double the previous peak in 2011. - The Jumpstart Our Business Startups Act of 2012 increased the number of shareholders allowed in private companies, fueling more activity in the secondary market. However, companies are now asserting more control over private stock trades by restricting which buyers they will approve. As a result, the most promising tech startups are increasingly difficult for retail investors to access through the secondary market.

1. Private
Investments
in
the
Secondary
Market

2. SecondMarket
con5nues
to
dominate
secondary
trading
volume
during
2014.

3. The
company
has
already
traded
almost
four
5mes
more
in
2014
than
it
had
for
all
of
the
previous
year.

4. The
900
million
dollars
that
SecondMarket
has
traded
in
secondary
stock
sales
con5nues
to
rise
as
the
year
wears
on.

5. Secondary
market
transac5ons
this
year
are
expected
to
total
over
$17
billion,
a
number
that
is
nearly
30
5mes
greater
than
the
secondary
volume
from
a
decade
ago.

6. It’s
also
double
the
volume
of
the
2011
peak
-­‐
when
a
variety
of
internet
companies
(such
as
Facebook
and
LinkedIn)
went
public.

7. SecondMarket
has
carved
out
a
niche
in
the
trading
world,
facilita5ng
the
trades
of
private-­‐
company
stock
—
mostly
shares
that
are
pre-­‐ini5al
public
offering.

8. Barry
Silbert,
founder
and
chairman
of
SecondMarket,
says
that
he
“wouldn’t
be
surprised
if
turnover
among
its
private
stocks
was
similar
to
turnover
in
some
publicly-­‐traded
stocks.”

9. Many
are
aTribu5ng
the
Jumpstart
Our
Business
Startups
Act
of
2012
as
a
reason
for
why
the
secondary
market
has
been
so
ac5ve.

10. The
act
helped
rise
the
number
of
shareholders
in
a
private
company,
increasing
its
threshold
from
500
shareholders
to
2,000.

11. By
also
expanding
investors
ability
to
buy
private
company
stock,
the
JOBS
Act
helped
startups
raise
more
money.

12. However,
companies
started
placing
restric5ons
on
secondary
trading
by
placing
a
right
to
veto
trades
in
the
contracts.

13. This
changes
the
landscape
of
the
secondary
market
as
private
companies
are
hos5ng
the
secondary
transac5ons
-­‐
seZng
their
own
price
and
choosing
those
who
can
buy
the
stock.

14. This
limits
the
startup
employees’
ability
to
cash
in
on
shares
while
also
shuZng
out
retail
investors.

15. Since
the
secondary
market
doesn’t
raise
capital
for
startups,
they
can
afford
to
be
picky.

16. These
companies
are
choosing
buyers
who
are
respectable
ins5tu5ons,
ac5ng
as
a
“stamp
of
approval”
for
the
startup.

17. They
are
also
looking
for
shareholders
who
will
offer
valuable,
unique
advice
to
the
company.

18. As
a
result,
the
most
desirable
technology
companies
are
the
hardest
for
the
average
Joe
to
access.

19. The
ones
that
are
accep5ng
anyones
money
are
the
companies
that
are
young
and
desperate.