This Week in Startups - Barry Silbert, CEO and Founder of SecondMarket Inc. | Summary and Q&A

TL;DR

Second Market aims to revolutionize the stock market by creating a global platform for trading alternative investments, addressing a $50 trillion market opportunity.

Key Insights

• 🔒 Second Market is revolutionizing the stock market by creating a platform for trading alternative investments, such as restricted stock in public companies and private company stock.
• 💦 The company works closely with the companies involved to maintain compliance and create a controlled trading environment.
• 🛄 Second Market aims to address a $50 trillion market opportunity by becoming the go-to platform for trading all alternative investments.

Transcript

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Questions & Answers

Q: What is Second Market and how did it start?

Second Market is a marketplace for trading alternative investments, including both restricted stock in public companies and private company stock. It was founded by a former investment banker who saw the need for a more efficient way to trade these types of assets.

Q: How does Second Market ensure the legitimacy of trades and protect against insider trading?

Second Market works closely with the companies involved to ensure compliance with regulations and to maintain a level playing field. Both buyers and sellers must meet certain qualifications, and the companies have control over who can participate in trading.

Q: What is the potential impact of Second Market on the stock market?

Second Market aims to provide an alternative to traditional stock market listings and create more liquidity for private companies. It also gives investors an opportunity to access shares in high-growth companies before they go public. This could have a significant impact on the IPO process and change the way companies raise capital.

Q: How do venture capitalists view Second Market?

Initially skeptical, venture capitalists have started to embrace Second Market as a way to provide liquidity to their investments. They can sell shares in private companies and demonstrate their involvement in successful companies when fundraising for future investments.

Summary & Key Takeaways

• Second Market was founded by a former investment banker and initially focused on trading restricted stock in public companies. It later expanded to include private company stock, creating a market for pre-IPO shares.

• The company works with private companies to enable controlled trading of their stock, providing liquidity for employees and investors.

• Second Market plans to expand into primary fundraising for later-stage companies and become the go-to platform for trading all alternative investments.