SecondMarket's Second Act: Community Banks?

In the past year, SecondMarket has thrived by enabling investors to buy and sell shares of hot tech companies that aren’t yet listed. With many of the most sought-after companies such as Facebook and Yelp going public, it has set its sights on trading shares in a far less trendy sector: community banks.

Early last spring, Chief Strategy Officer Jeremy Smith and Senior Vice President Caryn Feinberg started looking for new growth and zeroed in on trading the shares of small, private banks with secure and stable business models. “There’s something to be said for the 100-year-old bank that isn’t going anywhere,” says Feinberg, who’s heading the new effort. She says small banks want to make it easier for shareholders—often board members and local business-people—to trade their illiquid shares.