Investors are turning to private exchanges, like Second Market and SharesPost, to buy shares of non-public companies such as Facebook or Twitter.
This is causing the Securities and Exchange Commission to take notice.
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The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC.
"We're in a constant dialogue with the SEC about what is happening on our platform and how we are building it so that we are able to support these sorts of private companies," Greg Brogger, president of SharesPost told CNBC's "The Strategy Session" on Wednesday.
"I wouldn't obviously comment on a particular conversation we're having with the SEC, but it's a constant conversation we are having," Brogger said.
SharesPost is an online platform for buying and selling of private equity, with a primary focus on emerging growth, usually venture capital-backed companies, he said.
"Essentially what we've done is taken all those same securities laws that have always protected investors buying private company securities and we just wired them into a web interface—a 2.0 type platform that allows a certain amount of efficiently, transparency and scale to what used to be a very backroom industry where private companies shares would trade," Brogger said.
But some investors have asked for more volume history and greater transparency.
"We would all prefer that. We're sort of working within the world of the possible, and private company securities will never be traded in the same volumes, with the same degree of research and transparency as those that are on the public market," he said.
"These are usually longer-term investors who feel that whatever the value of Facebook today, it's going to be worth substantially more tomorrow, based on there appraisal of non-financial information," he said.
"What we are trying to do is make a marketplace in which there was essentially no information into a marketplace where there is some information," Brogger concluded.
Watch CNBC's "The Strategy Session" weekdays at Noon ET.
