For more than a decade Apple paid its then CEO Steve Jobs, who has sadly just passed away, an annual salary of just a dollar a year. Sure, he'd get the odd bonus, like the $90m Gulfstream jet he was given in 1999 and a quarter of a million a year or so in expenses, and his stock holding is now worth some $2.3bn. All richly deserved some would say given his contribution. But what if you're an employee of some hot new tech company and, while your salary is solid, you've got an equity stake in the private company you work with and you could really do with getting some cash to buy a house without waiting five years for a possible IPO?

And what if there's an investor somewhere who likes the look of the start-up you work for, but for want of being a VC or investment bank can't get exposure?

What you need - and what Europe needs - is a secondary market for stakes in private companies. The US has a number already, chiefly SecondMarket in New York and SharesPost in San Bruno, California. The online platforms, which also offer institutional investors the opportunity to trade restricted securities in public companies, loans and bankruptcy claims, have filled a glaring gap in the securities market. Companies such as Facebook and Twitter are traded on the exchanges and the transactions are sizeable - in August, for instance, the advertising firm Interpublic sold about half of its holding in Facebook on SecondMarket, realising a $133m profit on its early investment.

A market such as this in Europe would free early investors' balance sheets to invest in new projects. As a result, it would go some way to alleviate the capital malaise that is blighting economies as banks have battened closed their doors to lenders due to the European sovereign debt crisis, venture capital has fallen away sharply and angel investors have lost their wings. A second market in Europe will help improve the visibility of SMEs and, as well as provide capital, would for many be a valuable bridge to the public markets for those that choose to continue the trajectory.

For Europe's small-cap markets are experiencing stolid trading at the moment - even those of the UK, the junior markets AIM and PLUS, which are themselves better developed than many of the European counterparts. Combine the sluggishness of these markets and the current difficulty in getting initial public offerings away with the fact that Europe is less culturally oriented to IPOs than the US and there's an argument that Europe could have a more vibrant secondary private company share market than the already-busy US platforms. Volumes on the US "shadow markets" are expected to hit nearly $7bn this year, up from $4.6bn last year, according to Nyppex Holdings LLC, an American research firm and broker-dealer.

Because these secondary markets are traded upon by accredited investors, they also offer a way for companies to issue fresh capital. At the beginning of September, Santa Monica-based TrueCar, a vehicle price data company, raised $200m in an offering of new private stock through SharesPost.

With a public listing costing a small to mid-sized company some $5m or so, the opportunity to raise money more cheaply is valuable, as well as the advantage of not having to comply with the costly regulatory demands made of public companies. There's every reason to suppose there would be great demand for such a trading platform in Europe as well.

Patrick Gruhn 

FirstPEX

www.firstpex.com