Nasdaq has acquired SecondMarket Solutions, Inc., an innovator in facilitating liquidity for private company securities, which will be combined with the NASDAQ Private Market. Bill Siegel, CEO of SecondMarket, will lead the business, with bi-coastal headquarters in New York and San Francisco.
Prior to this transaction, SecondMarket had raised over $34 million in funding from FirstMark Capital, Li Ka-shing, Social Capital and Temasek Holdings.
As startups stay private longer, there is an increased need to provide liquidity for shareholders. While the share value of startups generally goes up at the time of an IPO, employees may have an interest in selling some shares beforehand, to buy a home or make other large purchases. There is also demand for shares of these fast-growing companies. The NASDAQ Private Market will be working with institutional investors to help them gain access to these pre-IPO startups, according to TechCrunch.
The combined management and business development teams of NASDAQ Private Market and SecondMarket include pioneers in private company liquidity and equity management, serving a diverse client portfolio of over 200 of the world’s most innovative private companies including DocuSign, Pinterest, Shazam, and Tango.
“The combination of NASDAQ Private Market and SecondMarket provides an exceptional platform for private companies to manage their equity and provide liquidity events for employees and investors,” said Nelson Griggs, Executive Vice President, Nasdaq and board member, NASDAQ Private Market. “Nasdaq has been synonymous with innovation in the capital markets for over 40 years, and this transaction, along with our blockchain efforts, creates new opportunities to serve the equity needs of companies throughout their time in the private arena.”
The addition of SecondMarket will bring increased opportunities to private company customers, including expanded member benefits, equity management solutions via the ExactEquity™ platform and access to Nasdaq’s corporate solutions offerings.
“As companies extend their pre-IPO lives, they face increasing pressure to provide liquidity to employees and early investors,” said Bill Siegel, CEO of SecondMarket. “Our combined offering strives to give private companies a comprehensive, company-controlled solution to attract and retain talent, while also providing tools to effectively manage their equity ownership and secondary liquidity for their employees and shareholders.”
The entire SecondMarket team has joined NASDAQ Private Market as a result of the acquisition.
“This transaction validates the role SecondMarket, and the team, have played in the evolution of the private market,” remarked Barry Silbert, Founder, SecondMarket.
Separately from this transaction, Nasdaq now holds full ownership of NASDAQ Private Market following its recent acquisition of a minority stake held by SharesPost, Inc.
NASDAQ Private Market, LLC is the premier equity services provider to private companies. Its end-to-end solution enables private companies to digitize, integrate, and control all of their equity-related functions, including cap table management, shareholder liquidity, investor relations, and capital raising. Whether a company seeks to optimize an eventual IPO or remain private permanently, NASDAQ Private Market provides comprehensive capital market support to meet its needs. For certain eligible investors and shareholders, NASDAQ Private Market is a place to discover and engage with some of the most exciting private companies. The NASDAQ Private Market, LLC is not: (a) a registered exchange under the securities exchange act of 1934; (b) a registered investment adviser under the investment advisers act of 1940; or (c) a financial or tax planner, and does not offer legal advice to any user of the NASDAQ Private Market website. Securities-related services are offered through NPM Securities, LLC, a registered broker-dealer and alternative trading system, which is a member FINRA/SIPC and a wholly-owned subsidiary of the NASDAQ Private Market, LLC. Securities offered through NPM Securities, LLC are not listed or traded on the NASDAQ Stock Market LLC, nor are the securities subject to the same listing or qualification standards applicable to securities listed or traded on the NASDAQ Stock Market LLC.
SecondMarket Solutions, Inc. is a New York-based technology company that provides software solutions for streamlining private securities transactions. The firm’s software enables private issuers and attorneys to save time and money by bringing scale, efficiency and unmatched user experience to private company secondary and private M&A transactions.
Since 2013, over $2.5 billion in transactions have been facilitated using SecondMarket’s software. SecondMarket Solutions was a sister company to Digital Currency Group, Inc. which the Founder of SecondMarket, Barry Silbert, also founded and currently leads.