Nasdaq said it will spin off its private company exchange and transform it into a joint venture with SVB Financial, Citi, Goldman Sachs and Morgan Stanley.
The exchange operator established the Nasdaq Private Market in 2014 to help people trade private company stocks. It said on Tuesday that the joint venture will “develop a complete liquidity solution for private companies.”
Employees of start-up companies usually get part of the shares, which is difficult to trade before the company goes public. SVB, which specializes in technology and life sciences, said that active private company stock markets will help these companies retain employees.
Greg Becker, CEO of SVB, said: “Innovative companies take longer to privatize and need to be able to provide employees with a safe and easy way to generate liquidity as they build their business.”
The joint venture established a secondary trading venue that will “provide our customers with a way to retain employees in an environment where talent acquisition is one of the biggest challenges.”
The two companies did not provide financial details of the transaction.