SecondMarket just released its second-quarter report from 2011 and by the looks of things, secondary market investors are as frothy-in-the-mouth as public ones. In the first half of the year, the online platform completed $268 million in private company stock transactions, a 75 percent year-over-year increase from the first half of last year. Considering SecondMarket typically takes a three to five percent fee, a back of the envelope calculation means that brought in about $8 million to $13.4 million in gross revenue from those trades. Although SecondMarket’s Girl Friday, Aishwarya Iyer told Betabeat, the that percentage is very general. “It depends on the amount of leg-work required, and numerous other factors.”
As is befitting the current boom, in the second quarter, consumer web and social media companies, representing 87.3 percent of transactions, thoroughly trouncing business products and services with 7.3 percent of transactions and retail and commerce with just 5.1 percent.
So who are the buyers aggravating pre-IPO founders by trolling SecondMarket for shares and driving up valuations? Zuck can blame accredited investors, who bought 46.7 percent of the dollar amount of transactions, hedge funds with 22.2 percent, and asset managers with 14.7 percent. (VC funds were responsible for a scant 0.2 percent of the dollar amount.)
By the looks of who’s selling, Twitter made the right decision last week to use half its $800 million in funding to buy back employee stock. Ex-employees were far and away the biggest sellers, representing 85.8 percent in Q1 and 94.2 percent in Q2.
Two New York companies ranked among SecondMarket’s most-watched: Foursquare at No. 5 and Gilt Groupe at No. 9. One “Made In NYC” start-up, Kickstarter also showed up in SecondMarket’s list of rising stars, joining up-and-comers like SharesPost and LegalZoom. (No doubt benefitting from the bump in interest from Betabeat’s Kickstart or Kill series.) But homegrown companies failed to make the grade for “newbies” who gained significant traction by the end of Q2, beat out by SurveyMonkey, Hipmunk, and Justin.tv.