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SecondMarket Shifts Post-Facebook

SecondMarket made a name for itself as a destination for trading shares of private companies like Facebook and Zynga before their IPOs. So it's no surprise that in the past quarter — with all those once-high flying companies public — SecondMarket's trading has fallen dramatically.

In the third quarter SecondMarket completed $77 million in trades. That's about a $100 million less than the prior quarter.

And post-Facebook , consumer web and social media companies were just 1 percent of SecondMarket's deals — 70 percent were in consumer electronics companies and nearly 20 percent were in e-commerce companies. (Read More: How SecondMarket Is Staying Relevant, Post-Facebook.)

But recent IPO disasters, like Groupon , Zynga and Facebook, are encouraging some companies to wait to go public. Instead, they are turning to SecondMarket to give employees liquidity. The median company trading on SecondMarket is seven and a half years old, with 609 employees and a market cap of $538 million.

"Companies are staying private longer and need a solution to facilitate liquidity for employees, whose net worth is tied up in company stock," said the platform's head of private company markets, Adam Oliveri.

Instead of going public or selling, Oliveri said companies are offering liquidity events as an employee benefit, giving employees an opportunity to sell 10 to 20 percent of their stock.

Now 80 percent of buyers are companies and 75 percent of sellers are current employees, a stark contrast to the Facebook era, when 90 percent of sellers were former employees cashing out and companies were just 9 percent of buyers. (Read More: Facebook Drops as Employees Sell Shares.)

"It's something that enables an employee to work at a startup where cash compensation might be lower than at a big public company and continue to have the possible equity appreciation, while still getting the cash they need," Oliveri said.

So what do accredited investors want to buy on SecondMarket? For the first time in the company's three year history consumer web and social media companies are no longer driving the stop demand. Now Biotech and Pharma companies are in first place, with over $77 million of interest from potential investors.

Click here for SecondMarket's full quarterly report.

—By CNBC's Julia Boorstin
@JBoorstin

Questions? Comments? MediaMoney@cnbc.com

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.