I admit it, I screwed up. While the transition of SecondMarket from a telephone broker of illiquid assets in 2005 to the technology-driven reinvented stock market that we are today has been quite successful, I have done a poor job managing our cost structure during this transition. As a result, there are a number of high quality, hard-working SecondMarket family members who are now looking for their next challenge.

So what went wrong? Reflecting on the past few years, the biggest mistake that I made was treating our cash in the bank and top line revenue as the ultimate gauge of the health of the company. The problem with that approach is that it helped obfuscate the bloated cost structure that we had in place from the period in our history when our model involved collecting a transaction fee by connecting buyers and sellers. Great business, but not predictable, not very scalable and requires substantial infrastructure costs – regardless of transactional volume.

Today, SecondMarket is solely focused on delivering a robust suite of capital, liquidity and communication tools to issuers (private companies, community banks, funds and student loan issuers). With this more scalable, predictable business model, we have decided to double down on what is working, eliminate any unnecessary costs and get our company back to the lean, mean, high performing organization that we once were before hubris took over. Basically, we need to act more like a startup and less like the large, bloated, slow moving organizations that we’re trying to disrupt.

This cost rationalization process has been gut wrenching for me, stressful on my leadership team and, quite frankly, the worst experience of my professional career. Yet I know it is the right thing to do and it is the right time to do it. Emerging from this process will be a company with over $25 million of cash in the bank, an expected break-even bottom line and a rapidly growing list of companies, banks, funds and student loan issuers that are joining SecondMarket. I remain extremely optimistic about SecondMarket’s future and the important role we plan to play in reinventing the stock market and redefining the modern company.

Finally, as I mentioned, there are a number of fine individuals who are now searching for an opportunity. Smart, capable people who would be an asset to any organization. I encourage those of you looking to add talent to consider welcoming them onto your teams.

Thank you for your continued support and encouragement.

Barry Silbert, Founder & CEO