Making private markets look more like public markets. NASDAQ has agreed to buy SecondMarket and combine forces with the NASDAQ Private Market. The group will facilitate the exchange of shares for private companies, including DocuSign, Pinterest, Shazam and Tango.
As startups stay private longer, there is an increased need to provide liquidity for shareholders. Nelson Griggs, executive vice president at NASDAQ, said that giving the employees the option to sell shares helps startups “attract and retain the best talent.” It creates less pressure on the companies to complete an IPO or sale if insiders have access to cash. While the share value generally goes up at the time of the IPO, employees may have an interest in selling some shares beforehand, to buy a home or make other large purchases.