Startups Using Secondary Markets: 'It's Almost Like I'm A Mini-Public Company

CHICAGO (Reuters) - With IPOs out of fashion for many companies, Scott Painter, the CEO of TrueCar, did the next best thing.

Earlier this year, TrueCar, a seven-year-old web company based in Santa Monica, California, turned to SharesPost, an online secondary market for private company stock sales. True

Car organized a $245 million private placement sale of its shares and used SharesPost to help attract attention.

For TrueCar, which provides pricing information to consumers shopping for new cars, the benefit was clear: SharesPost connected the company to an extensive network of institutional and high-net worth investors it may not otherwise have reached. Though secondary markets have been criticized for their lack of transparency, TrueCar used SharesPost to selectively boost its disclosure.

The company hosted an online road show, educating potential investors about the business, offered up its financials and, in the process, eliminated the need for management to knock on doors. By opening up its books to investors, TrueCar was able to secure about $20 million in investments through SharesPost in September.

"It's almost like I'm a mini-public company, because we run it like a public company," Painter said. "We publish deep financial data."

Startups are having a much tougher time going public these days, thanks in large part to costly compliance rules enacted under the 2002 Sarbanes-Oxley legislation.

According to Dealogic, the number of IPOs valued at $10 million to $200 million dropped to 36 this year to date from 76 in 2006. As a result, secondary markets like SharesPost and Second Market have stepped in to fill what entrepreneurs have long lamented as a restrictive funding gap.

"We've got a market that works really great for the large companies," said James Angel, an associate professor specializing in financial markets at Georgetown University's McDonough School of Business.

"If you're a tiny little company that nobody ever heard of, you're totally ignored by the market," Angel said.

The dilemma has done much to boost interest in secondary markets for private company stock. Shares in tech titans Facebook and Zynga have provided much of the buzz around secondary markets of late, as sky-high valuations have caught the eye of investors.

The markets work like online trading platforms - for a fee, they match buyers and sellers of private company stock. Disclosing audited financial information is not always a requirement, which has led to criticism over the markets' lack of transparency.

But proponents say secondary markets give entrepreneurs visibility and help create demand for their stock.

"I've got 50 public-company-style investors that are watching every move we make," Painter said.

An evolving market

Wall Street banks have caught on to the buzz around private stock offerings.

Earlier this year Goldman Sachs offered its high-net-worth clients the chance to own stock in Facebook, with a reported minimum investment of $2 million, a transaction said to have valued the social network site at more than $50 billion.

Facebook's reported valuation has greatly fluctuated since that time. Facebook wasn't required to disclose its financials, and critics charged that the Goldman Sachs deal was an end-run around SEC regulations. The agency is reportedly investigating the rules governing private markets.

To be sure, SharesPost and SecondMarket are not public markets.

In accordance with SEC rules, only institutional investors and high-net-worth individuals can participate as buyers.

"What we're trying to do is fill that gap between the venture capital system and the public markets," said David Weir, SharesPost CEO.

"You're not really ready to go public yet, but we can help you kind of cross that chasm to become a big enough, mature enough company so you can become a viable public company if that's what you choose to do," Weir said.

SharesPost charges a commission of 3 percent of the total transaction amount or $5,000, whichever is greater, for buyers and sellers who opt to retain a transaction specialist. Second Market, which handles a variety of illiquid securities, charges commissions of 3 to 5 percent on private company stock transactions. SharesPost has executed more than 1,000 transactions this year, up from "several dozen" in 2010, said Weir, who declines to provide dollar volume figures.

Several companies, including Tesla and LinkedIn, have since gone public, commanding stock valuations priced higher than those in private trading on the site, he added. SecondMarket, which launched its private company stock market in April 2009, has executed more than 800 transactions to date involving about 50 private companies and amounting to roughly $1 billion, according to Jeremy Smith, its chief strategy officer.

A double-edged sword

Secondary market standards are still a work in progress, which has made them murky territory for entrepreneurs.

There are different rules for the time frame for investors to buy shares, the amount of financial disclosure required and the minimum size of investments. SecondMarket, for example, allows companies to dictate the terms of transactions in what Smith called "controlled liquidity" programs.

"They decide who the buyers are that are allowed to be bidding on their stock," Smith said. "They set rules for the sellers - how much can sellers sell. (They) may set different rules for different types of shareholders."

Allowing top employees to sell a portion of their shares on secondary markets can be a boost for morale, Smith added, noting Silicon Valley companies now struggle to attract and retain talent.

Companies often give themselves the right of first refusal to buy back stock when insiders sell. In addition, a good valuation in the secondary markets could be used as a benchmark when entrepreneurs return to the VC and private equity markets for subsequent rounds of financing. But Georgetown professor Angel said secondary markets can be a double-edged sword.

"You may be hot one year, cold the next," Angel said.

"When you go to a VC and try to argue what the valuation should be for this round, they point to that really low number and say, ‘You gotta be kidding.'"

SecondMarket's Smith said companies typically must have an enterprise value of at least $200 million.

"You pretty much have to be a company that's on a trajectory to get a big valuation and a public offering," said J.B. Pritzker, a Chicago-based venture capitalist who heads the technology investment firm New World Ventures.

An eventual IPO is exactly what Painter is aiming for, and he hopes the exposure from SharesPost will help.

"I didn't need help raising $20 million," he said. "It helped me to educate the market."

ROWE: The Grown-Up Version Of Work

There's something naturally incorrect with the way we work.

That's the idea behind Cali Ressler and Jody Thompson's Results-Only Do the job Atmosphere (ROWE) project. They believe the present day work environment is chaotic with rules, goals and old methods that have nothing to do with the real work we're expected to be doing. Actually, these elements usually conflict with it.

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ROWE looks for to modify this by working on the one and only element that really matters: getting the work done, and doing it well.

What ROWE is (and isn't)

ROWE is different than flex-time and work-from-home applications, which still work on common achievement of your energy and effort following and reputation. It's more of an anti-program, really. There's no time-keeping, no essential work, no need to describe yourself if you work better in the times or want to take an day off to enjoy your children enjoy competitive softball.

In a ROWE, the only element staff are tested by is the effects they generate. How they do their work, where they do their work, and when they do their work is their option. Provided that the manager recognizes assignments carried out well and promptly, it's no hassle.

When you quit and think about it, it seems type of absurd that everyone doesn't already work this way.

What ROWE does differently

Here's a quick description of the positive aspects of working on effects only:

Workers are more effective. It's a usually recognized simple proven reality that work increases to complete time assigned for it. If you have to be at the work environment for eight time each day, you'll find a way to keep yourself quick paced, whether it's pulling out that record you're composing or a bit of your energy and effort in Mafia wars. It's a spend of both the businesses some time to yours.

Disruptions go away. Gone are the factors of "work" that conflict with actually doing your work. So much of our day is packed with potential distractions that have nothing to do with developing effects. Co-workers avoiding by to chit-chat. Events that last permanently but solve nothing. Hour-long trips in rush-hour visitors. All this rubbish is removed in a ROWE, so you're free to concentrate on merely doing the job you were used to do.

Employees get their existence back. In this age of 24/7 availableness, the collections between work and house are confused. (Ask anyone with a Rim attached to their work mail.) ROWE gives staff the capability to management their work-life stability whatever way will work best for them.

Attend a business telephone by cellular as you select up your dry washing. Produce a record on your pc while you look at your children at the gemstone. Instead of trying to compartmentalize "work" and "personal" time on a person's conditions - and sensation accountable when neither region gets your complete interest - staff are able to stay whole, built-in existence on their conditions.

Adults are handled like parents. Do we really need someone informing us when to take our meal time or how many times we're "allowed" to get sick? We're people. We handle people, money and family members, all with no administration and no worker guide to keep us in series. Being handled like we're 10 and can't be reliable is disparaging - and anger doesn't energy an worker's best operation.

Sure, some staff really do need someone looking over their shoulder muscles, but ROWE is excellent for that, too, as you'll come across in the next position.

The rice is cut from the chaff. One of the greatest issues about ROWE is that individuals will take positive aspects of the program (or shortage thereof). But the awesome element is that in a ROWE, those types of individuals are revealed really quick.

Let's experience it: some staff are really excellent at enjoying the 9-to-5 activity. They're experts of work environment nation-wide politics, nodding swiftly at every conference, cracking in for every birthday/retirement/shower present, returning in 15 mins previously and being 15 mins more time than everyone else (and making sure you know exactly who isn't as prompt as they are). What do they actually do all day? Who knows? But they're style employees!

Refreshingly, none of this is truly worth a wood dime in a ROWE. If you don't generate effects, you're out. And as an company, wouldn't you want to know who your "good" staff really are?

Employers win, too. Pleased staff are better staff. Dissatisfied and burnt-out staff won't give much more than the least wanted to gather their paychecks. But energized, fulfilled and well known staff have a tendency to actually proper value their work, to experience like their work topic and to want to provide the best effects possible.

It's a win-win.

Want to explore ROWE? Look at out Ressler and Thompson's publication, Why Do the job Hurts and How to Fix It: The Results-Only Movement, or have a look at the ROWE web page.

Kelly Gurnett, a.k.a. "Cordelia," operates the site Cordelia Calling It Leaves, where she records her endeavours to rid her daily lifetime of the elements that don't topic and concentrate more on the elements that do. You can adhere to her on Tweets and Myspace.

Math, Science And Engineering Graduates Pick Other Careers

Governments are desperate to lure children into science, technology, engineering and math (STEM) subjects at school. STEM, after all, will be the driving force of the 21st century economy. But it turns out, getting students to study asymptotes and dynamic semantics in college isn't enough. At graduation, a good chunk of those students abandon their STEM skills forever.

According to the U.K.'s Higher Education Statistics Agency, one in seven of the country's 57,645 STEM graduates last year went to work in retail. 11 percent pursued property development and 8 percent became teachers, reports The Telegraph.

In contrast, only 6.5 percent went into transport and communications, slightly less entered manufacturing, just 450 took jobs in the utilities industry, and a combined 1 percent pursued either agriculture, forestry, fishing, or mining and quarrying

"People don't think of working in engineering as a very interesting or sexy career," Lynn Tomkins, U.K. operations director at engineering and manufacturing skills council Semta, told The Telegraph.

This impacts female STEM students in particular. Already rare in their fields, only half of them will end up in a job where they use their technical skills.

According to a study published last week, when women are cued to think about romance, they become less interested in STEM jobs. Lab coats, coding, and axle grease don't mesh well, apparently, with common ideas of feminine sex appeal.

The problem, according to Tomkins, is that smaller, less-known businesses fail to recruit students. As a result, new graduates, if they're rejected from the big, popular companies like Rolls Royce or BAE Systems, simply enter a different field.

A fifth of U.K. companies are worried that they won't be able to hire enough qualified engineers, technicians and IT staff in the next year, according to the Institution of Engineering and Technology (IET), partly because applicants don't have enough "practical experience."

This could be solved, however, if more than one in four engineering companies offered apprenticeships.

If the U.K. and other countries hope knowledge economies of the future, they don't just have to encourage children to study math and science. They have to make it easy and appealing for students to make it theircareers.

Ohio Shale Drilling Spurs Job Hopes In Rust Belt

YOUNGSTOWN, Oh (AP) -- A unusual look in hard-luck Youngstown, a start up business place, has designed hope that a increase in oil and all-natural gas discovery across a multistate location might jump-start a growing in Corrosion Gear creating.

The $650 thousand V&M Celebrity work, located along a desperate reach that once was a present for United states marketplace, is to open by seasons end and generate easy material plumbing for going shale structures.

It will mean 350 new work in Youngstown, a northeast Oh metropolis that is experiencing 11 % joblessness.

V&M Star's parent or guardian business Vallourec, based in Boulogne-Billancourt, Italy, wants improved desire in shale structures will generate a ready-made market place.

Vast stores of all-natural gas in the Marcellus and Utica shale structures have set off a speed to get renting and secure allows to routine. Industry quotes display the Marcellus period could offer effective job numbers for Half a century.

Similar wants are in existence in Lorain, Oh, where U.S. Steel will add 100 work with a $100 thousand update of a place that makes easy tube for the engineering, oil-gas discovery and creation sectors. Erin DiPietro, a small business speaker in Pittsburgh, said the growth will develop the Lorain function more aggressive and help it tap into broadening shale improvements.

The mayors of both Oh places see a chance to restore creating through shale discovery.

"For every creating job there are between five and seven additional work designed within the local community that service those creating work," said Lorain Gran Tony a2z Krasienko. His metropolis has a 10.6 % joblessness rate.

Companies are trying to rewrite off more work from shale progression, and every bit will be a plus, according to Youngstown Gran Charles Sammarone. "I just know this: the money they will spend will help the economic system," he said.

Those enjoying shale progression include United states Railcar Industries of St. Charles, Mo., with an order backlog that is the most significant since 2008. The company enterprise, with businesses across the U.S, was assisted by demand for products motors used in the shale marketplace.

One of the greatest creating assignments on the shale creating skyline is the plan for a multibillion-dollar Cover Oil Co. petrochemical refinery. California, Oh and American Va are rivalling for the place, which would turn all-natural gas fluids to other substance substances that go into everything from materials to wheels to antifreeze.

"What they're dealing with at this level is, you're looking at the next precious metal speed," said Martin Abraham, science-engineering dean at Youngstown Condition Higher education.

One study guaranteed by the oil and gas marketplace estimated creating oil and gas materials could create or service more than 200,000 work in the next Four years just in Oh, where Hess Corp. lately created a line of mineral-rights buys worth $750 thousand.

But the venture is not without debate.

Susan Associate, a Case American Arrange Higher education lecturer who studies creating issues, said such job forecasts are suppose, in part because the calculate of all-natural gas materials may be filled.

She said the marketplace and political figures have a self-interest in wonderful forecasts. "It's a way of saying to environmentalists and others that say slowly down, `Gee, you're avoiding all this potential great job growth here'," she said.

V&M Celebrity, with creation places in Youngstown, Dallas and Muskogee, Okla., will slam up creation over the next season, creating easy tube to bring gas or oil to the surface.

"Not only do we have an skilled workers but ... our market place is in our lawn," said Fran Mastervich, the businesses leader and primary managing specialist.

Rick Mazza, 52, who has skilled the business decrease direct, wants the initial enhance that V&M Celebrity has designed for his commercial-residential air conditioning business. He's used two more staff in the last season.

"It's going to be a good spillover for us, especially with this depressive disorders or economic downturn, whatever we're in now," said Mazza, who was fired continuously in the Early at the General Engines Corp. place in close by Lordstown.

The Youngstown-Warren location has lost more than 28,000 work in the last Several years, two-thirds of them in creating. The Youngstown populace has dropped to about 67,000, less than half of what it was some 40 in the last, and the metropolis is strongly bulldozing dilapidated residences to reconfigure itself as a smaller metropolis.

The metropolis has a center that nourishes small-business progression and has worked to update the local community around Youngstown Condition Higher education, an important job source with more than 2,000 workers.

Despite the work, there was refurbished information of the municipality's decrease in a Nov. 3 Brookings Organization record that said Youngstown has the country's best attention of lower income among the 100 greatest city areas.

Boosters in the location record additional information of an increasing creating that you are, together with a technical technological innovation organization that enhanced from The state of michigan to Youngstown and the hot-selling Chevy Cruze built in Lordstown.

In May, the U.S. Geological Study said the Marcellus Shale location from New You are able to to Oh contains some 84 billion cubic feet of hidden, recoverable all-natural gas, far more than thought nearly a decades ago. Some geologists have put the figure even higher, but those quotes are debatable .

The Utica development protects much of southern Oh and noise through New You are able to, New Jacket, California, Md, American Va, The state of kentucky and Tn.

Permits enabling gas fracturing in Ohio's part of the Marcellus and the further Utica Shale have improved from one in 2006, to four last year, to at least 32 this season, state information display. California has nearly 3,500 Marcellus water wells sunk, most since 2008, and more than 500 allows have been supplied this season in American Va.

Environmentalists are critical of the procedure, which uses chemical-laced water and fine sand to enhance deeply into the earth and free the shale gas. Experts anxiety the procedure itself or the discovery fluid, which can contain toxins, could poison water materials, either below surface, by spots, or in got rid of wastewater.

Mark Brownstein, an lawyer with the Environment Security Account, said it's up to specialists and drillers to develop sure shale marketplace work are designed while preserving the environment.

At a family-owned pub in Youngstown maintained by Ray Maffitt, the talk is aimed on a better work future.

Steel staff coming off changes 24 / 7 had the place stuffed three deeply in the last, but there were just 10 people on a recent day.

With the new place across the road, the community's spirits "is all positive," said Maffitt, 59. "Every day we've got something to look forward to."

Top 25 Companies for Work-Life Balance

Our men would have chuckled at the strategy of work-life stability, but the days of 70-hour operate months are so Nineties. Now, organizations understand that workers reduce up out swiftly if their existence are absorbed by their work, and a well-rounded personnel is a pleased personnel. In an attempt to identify organizations that really get it right, Glassdoor.com asked workers and came up with the top 25 organizations offering the best stability between operate and individual lifestyle.

The top five organizations in this class, according to workers, include: Nestle Purina Petcare, MITRE, SAS Business, FactSet and Joined Room Partnership. Why was Nestle Purina Petcare ranked so large in work-life balance?

Employees said that they appreciate rewards like the business retail shop, gym, on-site childcare and bank, as well as the independence to bring their household pets to operate. Staff also mentioned on the adaptable operate times and managements' knowing of non-company relevant repayments. Nestle Purina Petcare gotten the best work-life stability record (4.6 on a 5-point scale) from its workers over the past year.

"At Nestle Purina, we identify the benefits that work-life stability performs in our associates' achievement at operate. This is why we have placed such a powerful stress on offering facilities and sources to help our contacts obtain a stability, a element that we experience results in the company large doing lifestyle," said Nestle Purina Petcare CEO W. Meat McGinnis.

"As technological innovation has made it simpler to operate distant and the strains around the 9-to-5 day have confused, we experience it's important to focus on those organizations that identify employees' needs beyond the needs of their work. This record from Glassdoor awards those organizations where workers experience work-life stability is motivated and sought after," said John Hohman, co-founder and CEO of Glassdoor.

Here's a record of the Glassdoor 2011 top 25 organizations for work-life balance:

Nestle Purina PetCare

MITRE

SAS Institute

FactSet

United Room Alliance

Slalom Consulting

Facebook

Morningstar

Susquehanna Worldwide Group

Colgate-Palmolive

Mentor Graphics

Autodesk

Sheetz

Agilent Technologies

Turner Broadcasting

DuPont

Southwest Airlines

General Mills

Biogen Idec

Scottrade

Chevron

Synopsys

MTV Networks

Intuit

National Instruments

It's awesome to be aware that even in the aftermath of the financial crisis and major job discounts, a lot of workers (54 percent) record good work-life stability while 43 % wish they had better work-life stability, according to the study performed by Harris Involved.

It tested how pleased workers are with person leaderships' service and knowing for managing operate lifestyle and individual lifestyle, and for how adaptable companies are in supplying workers the time off they need to deal with everything from car repair to home-life concerns.