SecondMarket is looking to tap into growing demand for shares in private companies that are waiting longer to IPO.
We got a sneak peak at its new trading platform it is announcing tomorrow, which aims to overhaul how alternative investments are managed and traded.
The new platform has a clean, Facebook or Apple-style interface, much more public information about each of the companies, and far more companies.
On the revamped site accredited investors can express interest in buying or selling any one of 12,000 companies — before SecondMarket only offered 550. Accredited investors can track share prices, as they always have been able to on SecondMarket. But now they can create a public or private profile, track real-time company news, and set up alerts for when shares become available.
CEO Barry Silbert says he expects this additional information to grow the numbers of buyers, sellers, and the site's trading volume. SecondMarket can track which companies are most watched, or in highest demand, and communicate that information to companies, so they can decide to create a secondary market.
Silbert is trying to make the platform social, by allowing users to connect with real-world friends and see what companies they're following. If you go to Facebook to connect with your friends and LinkedIn to connect with your business contacts, SecondMarket is where you'd go to connect with your alternative investing community. You can't send messages back and forth within SecondMarket's platform, as you can in Facebook, but you can connect with real-world contacts to see what companies they're following or what investments they hold. Certainly not every investor will want to expose their investment philosophies, but SecondMarket insists that this is simply a way to bring real-world relationships online.
This new platform also aims to make SecondMarket mainstream — a destination for everyone interested in alternative investments, even if they're not accredited. Anyone can create a profile, track company news and connect with other investors. They can't see the prices of shares or trade.
SecondMarket's rival Sharespost is also trying to stake a claim as a destination for private company information. This week it expanded its online research tools — available to anyone —to include a monthly report on private company valuations. There's no question, demand for shares in these companies is booming. The question is, as companies stay private longer, will they attract more SEC scrutiny?
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