SecondMarket’s activities to focus on technology

‘Forbes’ calls CEO Barry Silbert ‘The Lord of Liquidity’; recently selected by the World Economic Forum as a 2011 Technology Pioneer.

By SHMULIK SHELAH
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.
One such 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 operations.
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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 product.
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 change.
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 said.
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 sides.”
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 market.
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.