2015 saw a decrease in global IPOs and sharp increase in large late-stage funding rounds. Since the JOBS Act in 2012, private companies are increasingly remaining private for longer durations. Furthermore, the profiles of private companies conducting tender offers appear more mature than ever. In 2015, typical clients averaged 9 years of age, with over 400 employees, $350 million in primary capital raised, and a valuation of $1.8 billion. These characteristics look similar those of a traditional mid-cap, public company.
Nevertheless, while the private market has quickly evolved since 2012, it still has a long way to go. Standards for company disclosure are starting to develop, and the frictional cost of transacting is decreasing. The future of the private market depends on companies continuing an active role in the secondary market, placing structure around liquidity strategies that meet their level of maturity, and focusing on what is most important to them – developing quality products as quickly as possible. Best practices are coming to the forefront, and NASDAQ Private Market is proud to be leading the effort.
In our 2015 Year-End Private Company Report- the first since NASDAQ Private Market acquired SecondMarket- we take a look at the growing phenomenon of private company liquidity. Using data from programs on both the NASDAQ Private Market and SecondMarket platforms, we analyze the top-line trends, including how and why private companies use tender offers to deliver liquidity to their shareholders.
The information contained herein is provided for informational and educational purposes only. None of the information provided is an offer or solicitation to buy or sell any securities, or to provide any legal, tax, investment or financial advice.
The NASDAQ Private Market, LLC is not: (a) a registered exchange under the Securities Exchange Act of 1934; (b) a registered investment adviser under the Investment Advisers Act of 1940; or (c) a financial or tax planner, and does not offer legal advice to any user of the NASDAQ Private Market website. Securities-related services offered through SMTX, LLC, a registered broker-dealer and a member FINRA/SIPC and a wholly-owned subsidiary of The NASDAQ Private Market, LLC. Securities offered through SMTX, LLC are not listed or traded on The NASDAQ Stock Market LLC, nor are the securities subject to the same listing or qualification standards applicable to securities listed or traded on The NASDAQ Stock Market LLC.
Data collected from the SecondMarket platform may include transactions conducted through current and former affiliates of SecondMarket.
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