Where is all the money going? Well, it’s easy to find out on SecondMarket these days. The New York-based marketplace for private company stock has just released its second-quarter/first-half results. To check out the infographics from the SecondMarket report, take a look at the slideshow immediately below. Then, dig deeper into the 11 major insights that we have identified from the report. Some of what you see will definitely take you by surprise.
1. The BIG number: SecondMarket completed $268 mn in private company stock transactions in the first six months of 2011. That’s a surge of 75 percent relative to the same period in 2010. Since 2008, SecondMarket has completed more than 650 transactions with a volume of over $750 mn.
2. People are paying to play: do the big institutions dominate the action on SecondMarket? Not quite! In dollar terms, close to half of the year’s transaction (through the end of June) came from accredited investors. By transaction, it was more than half. Hedge funds committed disproportionate dollar amounts relative to the number of transactions, and asset managers were fairly active.
3. Insiders are bringing the deals: More than 85 percent of first-quarter transactions on SecondMarket involved the sale of private company stock by former employees. That percentage shot up to 94.2 percent in the second quarter. Current employees were next, though far behind, at 3.8 percent in the first quarter and 4.4 percent in the second quarter.
4. What investors want: It’s all about social media and the consumer web: 39.2 percent of buyer interest and 34 percent of seller interest fall into this category. Retailing and commerce comes next, while travel and business products and services anchor the other end of the spectrum.
5. No surprises on the watch list: Facebook. Twitter. Groupon. Zynga. The usual suspects are the most-watched companies on SecondMarket. LinkedIn fell off from the first quarter to the second, likely because of its initial public offering. Simply put, action in LinkedIn moved up Broadway (where SecondMarket’s office is) to Wall Street (where LinkedIn trades on the New York Stock Exchange. While Facebook is rumored to be filing as early as October, Twitter remains mum on its future capital markets plans. Groupon and Zynga have filed, drawing much criticism in the process. LivingSocial is said to be planning an IPO.
7. New companies enter the fray: SurveyMonkey, Coupons.com, Hipmunk and Juntin.tv are among the newest companies to see transactions in their stock completed on SecondMarket in the first half of 2011.
8. VC league table: Sequoia Capital has 11 SecondMarket companies in its portfolio – and thus has the lead position among venture capital firms according to this metric. Accel Partners and Union Square Ventures follow, trailed by Greylock Partners, Kleiner Perkins and Benchmark Capital.
9. The rise of gaming: It isn’t surprising to see consumer web and social media and retailing and commerce drawing the attention of SecondMarket members. The gaming sector, however, is coming on strong, and the likelihood of a Zynga IPO is probably a contributing factor.
10. Where do the most-watched companies live? In the U.S., it’s Seattle, Chicago and Orlando. Seattle may not surprise, but the absence of San Francisco, Boston and New York does.