BARRY SILBERT 58.
(photo credit: Courtesy)
The pursuit of funding for start-ups has generated creative new forms of raising
capital. One such type of initiative has been private-company stock exchanges,
which serve as a staging post en route to an exit.
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private-company stock exchange, New York-based SecondMarket, which bills itself
as the world’s largest centralized marketplace and auction platform for
alternative investments, has announced that it is launching Israel
SecondMarket founder and CEO Barry Silbert was recently
selected by the World Economic Forum as a 2011 Technology Pioneer and will be
recognized at the Annual Meeting in Davos, Switzerland. This was a surprising
award for a man who has not developed an earth-shattering technology but rather
devised a financial and business model that has become a successful
Through SecondMarket, Silbert offers a unique model. Using
SecondMarket’s platform, it is possible for buyer and seller to trade directly
in the shares of private or public companies.
This makes SecondMarket a
genuine alternative for the market’s need for liquidity.
Even if for many
start-ups it is still a very long way before capital can be obtained via
SecondMarket, it nevertheless portrays itself as a major hope for
Not for nothing was Silbert called “The Lord of Liquidity” in an
article in Forbes four months ago.
“The focus of activities in Israel
will be around technology industries,” he said in a recent interview with
Globes. But there would also be activities around the other financial assets
that are traded on his market, such as complex ARS debt products, which many
Israeli companies have been successfully exposed to, as well as investments in
private-equity funds, he added.
“We have attracted a lot of interest in
Israel over the past six months from two groups: shareholders in companies and
leading technology companies that thought that SecondMarket will help
shareholders obtain liquidity and locate sources of financing,” Silbert
SecondMarket plans to initially hold talks with Israeli companies
and investors, he said, and would rent offices in Herzliya Pituach. Activities
would begin in earnest by the end of the year, he added.
“There are 4,000
companies backed by venture capital in Israel, and many of them will remain
private for a long time,” Silbert said.
“Many investors want to take
their money off the table, and there are investors in Israel and the US that are
interested in being more involved. We want to provide the bridge between the two
According to SecondMarket vice president Ra’anan Lachman, who
will coordinate the company’s Israeli efforts, “Israel is a hub of technology
and entrepreneurship, so it is only natural for SecondMarket to build and
cultivate an Israeli presence.”
Lachman previously worked at Oppenheimer
& Co, where he was involved in fund-raising and taking public numerous
Israeli private companies. In addition to Lachman, SecondMarket will have a team
in Herzliya and New York focused exclusively on the Israeli
SecondMarket has more than 20,000 participants including global
financial institutions, regional and community banks, hedge funds,
private-equity firms, mutual funds, corporations and other institutional and
accredited investors. SecondMarket’s shareholders include FirstMark Capital, New
Enterprise Associates, SVB Financial Group, the Li Ka-Shing Foundation and
Dunearn, a subsidiary of Singapore’s Temasek Holdings.