Business

Nasdaq plans to incubate young tech companies

Nasdaq CEO Bob Greifeld isn’t sweating Twitter’s stock listing.

While the exchange boss is expected to lose the high-profile deal to archrival the New York Stock Exchange, Greifeld is looking to get the inside track on the next hot crop of young tech companies before they go public.

As early as next week, Nasdaq OMX is expected to win approval from the Financial Industry Regulatory Authority to operate a private listing venture, Nasdaq Private Market, through a partnership with SharesPost Inc.

SharesPost is among a handful of second-market companies that allow for trading of privately held company shares, in particular startups such as Facebook and LinkedIn.

Nasdaq is hoping the private market will serve as a D-league, allowing it to aggressively recruit Silicon Valley startups before they enter the big leagues.

“We see [Nasdaq Private Market] as a huge benefit to companies as they transition from the incubation phase to the public markets of their growth,” Bob McCooey, head of listings at Nasdaq, told The Post.

Nasdaq also views the private market platform as a way to beat back the NYSE, which is eager to nab Twitter and heighten its tech allure.

Nasdaq has long been the preferred exchange for tech companies, but the NYSE has been making inroads, particularly after Nasdaq’s handling of Facebook’s market debut. The glitch-filled IPO prompted lawsuits and led to a $10 million fine by the Securities and Exchange Commission.

Last year, private markets got slapped for running afoul of SEC regulations, including SharesPost, which was sanctioned for failing to file as a broker-dealer. Since then, regulators have been working on new ground rules for operating private markets.

Meanwhile, Nasdaq is looking to capitalize on the JOBS Act, which allows companies to stay private longer and avoid public scrutiny while they grow their business.

The act increased the investor limit to 2,000, excluding employees, up from 500, before a company has to register with the SEC. The lower threshold is part of what pushed Google to go public in 2005.

“What we want to do with [the private market] is use the benefits of the JOBS Act and put the power in the hands of the companies so they can control their own destiny,” McCooey said.

Nasdaq’s private market venture will lavish pre-IPO companies with many of the same benefits and perks the exchange has bestowed on bigger publicly traded clients, including news wire services and access to proprietary data rooms.

While companies on the Nasdaq Private Market won’t be obligated to go public through the exchange operator, Nasdaq is betting that the nascent companies will spurn rivals after it has catered to their needs.

Nasdaq official Nelson Griggs is heading up the private share listing project.

The exchange operator is trying to put mishaps like the botched Facebook IPO and a string of recent technology glitches behind it. Currently, Nasdaq is on pace to have its best IPO year since 2007, with 81 public offerings completed so far.