The secondary activity in Facebook resulted in a lot of companies changing their bylaws to restrict trading activity, either by explicitly blocking sales or making it more difficult to sell.
While it used to be the Wild West, now companies insist on structured secondaries. They don’t want employees selling to unknown investors like what was happening on SecondMarket and SharesPost in the early days. A lot of companies now have insider trading policies, transfer fees, prohibitions, or more aggressive rights of first refusal to block unwanted sales. Companies put in such various roadblocks and milestones they felt were appropriate in order to prevent investors from buying and flipping their stock within the private market and ensuring that shareholders aren’t selling to people the company doesn’t know or trust.
However, private companies still needed to find a way to give their employees some liquidity while maintaining control. They started bringing in investors who would buy a big chunk of stock from a large number of employee shareholders, which led to the beginnings of company-sponsored secondaries.
As the demand for liquidity increases from their shareholders, companies are increasingly pressured to organize liquidity programs. However, these programs can become a nightmare for companies to facilitate and track. Companies and their law firms need a way to put everything online and view it in real time. Having an automated way to do this, like those services offered by Shareworks, NPM, and Carta, makes it possible for companies to manage tender offers, which in some cases involve several hundred or even thousands of shareholders.