Demand for private company shares declined in the second quarter versus the first quarter but was up sharply year-over-year, according to a new report released today by SecondMarket. The market for private company stock saw $112 million in transactions last quarter, versus $156 million in the first quarter, or down 39 percent sequentially. On an annual basis, however, it was up 120 percent over the second quarter of 2010, which saw $51 million in transactions. And the $268 million worth of transactions in the first half of 2011, was up 75 percent from the first half of 2010 .
Some of the tempering of demand over the past couple quarters can be attributed to the fact that two of the previous most popular stocks on the market, LinkedIn And Pandora, went public so investor demand simply shifted to the public markets. Demand for shares from new startups filled much of the gap, but was not enough to keep transaction volumes growing compared to the previous two quarters.
Nearly 88 percent of completed transactions were for consumer Web companies, and hedge funds accounted for 22 percent of the dollar value, but only 5 percent of the number of transactions. Individual accredited investors were the largest buying group, accounting for nearly 48 percent of total dollar value and 62 percent of number of transactions. Former employees were the biggest sellers (accounting for 94 percent of transactions).
For the first time, SecondMarket ranked the top VC firms based on which ones have the most portfolio companies on its 100 most-watched list. Sequoia tops the VC scoreboard with 11 companies. Accel and Union Square both have 8. Greylock, Kleiner, and Benchmark each have 7. General Catalyst has 6. And Charles River, Khosla Ventures, and First Round each have 5. (See top chart)
The top 10 most watched stocks (members can add any stock to their “watch list”) remained pretty stable, with Facebook, Twitter, Groupon, and Zynga in the top four slots. Foursquare moved up to No. 5, followed by Skype, Yelp, Dropbox (new), Gilte Groupe, and LivingSocial (new). LinkedIn and Pandora fell off the list as a result of their successful IPOs.
The Rising Stars gaining the most watchers were Kickstarter, PopCap, SharesPost (SecondMarket’s biggest competitor!), LegalZoom, and Lending Club. PopCap was just bought for $1.3 billion by EA, and LegalZoom raised $66 million from Kleiner and IVP.
SecondMarket also tracks a group called “Newbies” which are showing early traction in terms of attracting investor attention. The Newbies in the second quarter were SurveyMonkey, Coupons, Hipmunk, Justin.tv, and Yousendit.
Finally, the report also pulls out the most watched international companies. These include Skype and Spotify (of course), Rovio, Soundcloud, and the Alibaba Group.
SecondMarket is the leading marketplace for alternative investments. It has become the online destination for building your investor network, discovering interesting investment opportunities, and transacting in assets such as private venture-backed companies and private community banks, fixed income products, public equity and bankruptcy claims. SecondMarket simplifies secondary market activity by connecting buyers and sellers and providing world-class market and operations expertise. Since 2004, SecondMarket has brought together more than 100,000 individuals and institutions and completed billions of dollars in...
Sequoia Capital is a venture capital firm founded by Don Valentine in 1972. The Wall Street Journal has called Sequoia Capital “one of the highest-caliber venture firms” and noted that it is “one of Silicon Valley’s most influential venture-capital firms”. It invests between $100,000 and $1 million in seed stage, between $1 million and $10 million in early stage, and between $10 million and $100 million in growth stage. The firm has offices in the U.S., China, India and...
Accel Partners is a global venture capital firm with offices located in Silicon Valley, New York, London, China, and India. They typically make multi-stage investments in internet technology companies. Founded in 1983, Accel Partners has a long history of excellence and innovation in the venture capital business and is dedicated to partnering with outstanding entrepreneurs and management teams to build world-class companies. Accel today invests globally using dedicated teams and market-specific strategies for local geographies, with offices in Palo...
“Union Square Ventures is an early stage venture capital firm based in New York City. We invest in young companies that use information technology in innovative ways to create high growth business opportunities in the Media, Marketing, Financial Services, Telecommunications, and Healthcare industries. Our venture capital firm was conceived as a place where a small number of very experienced investment professionals, working collaboratively from a single office, could build a portfolio of promising startup companies and then put our experience...
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