Banking & Finance

Nasdaq Launches New Market for Private Companies

Paul Ausick

Source: bfishshadow via Wikimedia Commons
The Nasdaq OMX Group Inc. (NASDAQ: NDAQ) on Wednesday morning launched its capital marketplace for private companies, the Nasdaq Private Market. The new market joins the likes of SecondMarket and SharesPost as places where non-public companies may list shares and raise capital.

According to the announcement, “NASDAQ Private Market will provide qualifying private companies the tools and resources to efficiently raise capital, control secondary transactions, and manage their equity-related functions.” Securities-related services will be offered through an SEC-registered alternative trading system, NPM Securities, a member of both FINRA and SIPC.

Nasdaq’s CEO said:

A critical component of the NASDAQ OMX mission is providing support to the innovators and entrepreneurs in today’s marketplace. For over 40 years, NASDAQ OMX has been committed to serving the needs of companies for their entire life cycle — whether emerging growth companies or mature corporations. We are excited to support the launch of NASDAQ Private Market and to extend our product offering to private companies with this new efficient and transparent market.

In order for a company to qualify for a listing on the new marketplace, it must meet one of five requirements:

  • The company must have received funding of at least $30 million in the past two years and have an enterprise value of at least $50 million.
  • Total assets and annual revenue must be at least $50 million each.
  • Annual net income must total at least $750,000.
  • Shareholder equity must total at least $5 million, and the company needs to have a two-year operating history.
  • A listed company could have a sponsor that is a “recognized financial investor(s) with a track record of successful venture investments.”

Nasdaq OMX shares traded down 0.4% early Wednesday, at $39.66 in a 52-week range of $27.47 to $40.74.