Nasdaq has said it will expand its exchange to private companies and transform it into a joint venture with SVB Financial, Citi, Goldman Sachs and Morgan Stanley.
The exchange operator created Nasdaq Private Market, which helps people to exchange shares in private companies, in 2014. It said Tuesday that the company “would develop a complete set of liquidity solutions for private companies”.
Employees of start-ups are often paid in part in shares, which can be difficult to trade before companies are listed. SVB, which specializes in the technology and life sciences sectors, said an active stock market in private companies would help those companies retain staff.
“Innovation companies remain more private and need the ability to offer their employees a safe and easy way to generate liquidity while building their businesses,” said Greg Becker, SVB’s chief executive.
The company is establishing a secondary business location that will “offer our customers a roadmap for employee retention in an environment where access to talent is one of the biggest challenges”.
The companies did not give financial details about the deal.