SecondMarket Launches Private Company Marketplace

Also Unveils Unique Program to Private Company Management Teams, Combining Shareholder Custody, Administration and Communication Tools

NEW YORK, April 23 /PRNewswire/ — SecondMarket, the largest marketplace for illiquid assets, announced that it has expanded its online trading platform to include private company securities after a year of development and pilot testing. This effort is designed to offer the first viable and sustainable marketplace for private company shareholders.

“Today’s announcement is the culmination of dozens of meetings with venture capital firms, institutional investors, private company employees and, most importantly, fellow entrepreneurs. Our goal is simple: to help private companies thrive, thereby generating enhanced returns for their stakeholders,” said SecondMarket CEO Barry Silbert. “We are in the middle of a massive restructuring of our capital markets and I’m thrilled that SecondMarket is taking the lead in the development of innovative, value-creating solutions to the systemic problems that exist in our capital markets.”

This new marketplace is designed to offer a unique liquidity model for private company stakeholders, including founders, angel investors, current and former employees, venture capital firms and private equity funds. The system will also enable accredited and institutional investors to gain access to unique private company investment opportunities not available anywhere else, while providing private companies an effective way to control secondary market activity. Leading the company’s efforts in this area is M. Adam Oliveri, the Managing Director of the Private Company Market.

“I have been saying for years that we need a new path to liquidity for private companies,” said Fred Wilson, Managing Partner of Union Square Ventures. “SecondMarket’s novel approach to creating a centralized secondary market helps make this a reality.”

Access to the SecondMarket platform is free. To date, 3,000 participants managing more than $1 trillion in assets have become part of the SecondMarket network. More than 600 accredited investors have specifically expressed interest in private company securities.

As part of the marketplace launch, the company has released the SecondMarket WatchList, a compilation of private companies that SecondMarket participants identified as some of the most interesting and fastest growing in the country. SecondMarket participants can access free, aggregated public data on the WatchList companies and indicate their interest in purchasing securities in these companies through SecondMarket. The WatchList can be found here (http://www.secondmarket.com/watchlist.php).

SecondMarket is also pleased to unveil a set of shareholder administration tools to private company management teams. This innovative program, which includes shareholder custody, recordkeeping, and secure communication tools, will save companies the time and expense associated with managing shareholders. In connection with this program, private companies will also have the ability to set up and manage their own “MicroMarket” on the SecondMarket platform – thereby giving management complete control of the secondary market for their securities.

“The lack of a functional IPO market and sluggish M&A activity has caused investors’ average holding periods in VC-backed companies to double. The result has been reduced returns for investors, financial hardship for founders and employees, and consequently, a very difficult financing market for private companies,” said David Weild, Former Vice Chairman of NASDAQ, current Chairman of Capital Markets Advisory Partners, and an advisor to SecondMarket. “It’s time for innovation,” added Weild. “There needs to be a third path to exit, and the SecondMarket private company marketplace is blazing that path.”

About SecondMarket

Founded in 2004, New York-based SecondMarket (member FINRA | MSRB | SIPC) is the largest marketplace for illiquid assets, such as auction-rate securities, bankruptcy claims, collateralized debt obligations, residential and commercial mortgage-backed securities, limited partnership interests, private company securities, restricted securities and blocks in small capitalization companies, and whole loans. SecondMarket, which has conducted more than $1 billion in transactions since the launch of the company, has 3,000 participants, including global financial institutions, hedge funds, private equity firms, mutual funds, corporations and other institutional and accredited investors that collectively manage over $1 trillion in assets available for investment. For more information, visit www.SecondMarket.com.

    CONTACT:

    Pinar Posluk
    Weber Shandwick
    212-445-8242
    pposluk@webershandwick.com

    Sergio H. Morales
    Weber Shandwick
    212-445-8018
    shmorales@webershandwick.com

SOURCE SecondMarket