There's no question — investors want a piece of private companies and the secondary market is booming. SecondMarket, the largest platform for trading private company shares, just released its fourth quarter 2010 numbers, and the growth is striking.
Trading volume more than doubled in the fourth quarter from Q3, to $158 million transactions up from just $73 million the prior quarter. And there are accredited investors and venture funds participating in the second market than ever — it has 35,000 participants up from just 6,500 last year and 2,500 a year ago. (For a primer on how to invest in SecondMarket click here)
Facebook — the most popular company on SecondMarket by far — and other fast-growing, profitable companies are staying private longer than ever, which means this is the only way to snag a piece of the action. A full 39 percent of SecondMarket transactions last quarter were of Facebook — some of them at a $50 billion valuation for the social network. Facebook is seven years old — a decade ago a company of its size and scope would certainly be public.