But where does that leave the company? In 2011, SecondMarket was heralded as the latest innovation in employee retention and investment democracy. (Now, anyone can buy pre-IPO Facebook!) SecondMarket even raised $34.2 million in venture funding itself from Social+Capital Partnership, FirstMark Capital and Temasek Holdings.

But then pre-IPO Facebook (FB) share sales descended into utter chaos. As I wrote in Monday’s column, startup CEOs and investors are increasingly saying “no thank you” to secondaries. I spoke with SecondMarket’s interim CEO, Bill Siegel, about that last night. He’s been running operations for SecondMarket since 2011. (The interview has been condensed and lightly edited for clarity.)

How have SecondMarket’s products changed since the Facebook era?

Late 2011 was the fever pitch of pure, over-the-counter, pre-IPO private company stock trading mania, centered mostly around Facebook. We knew Facebook was going public, and that was obviously a large source of revenue. But the market was shifting, starting a year prior to that. A lot of the other private companies didn’t like the way the pre-IPO market was shaping up.

We began to formulate a product around what private companies wanted and desired. The first was a legal solution. You could structure these things as tenders keep them private. The company controls the rules, the price, who can sell and how much, not the external broker or some buyer that is scalping around for shares. Then we productized the user experience.

How has that worked for you?

We have been developing this since the private market wound down [in early 2012]. These are very private transactions. We are having, in 2014, a record year. We’ve done almost $1 billion in private company secondaries in first half of this year.

Do you agree with what we wrote on Monday, that startups are increasingly wary about letting shareholders cash out early?

I can understand why companies are really reticent, and its why we changed our model back in 2011. The companies were being really proactive. We heard from the companies saying, “Quite frankly, [selling shares] should be outlawed because its so distracting. We don’t want anything like [what happened at Facebook] to develop and we’re looking at ways to change the bylaws in our businesses so it can be explicitly outlawed.” Venture firms have said when founders are forming their companies, they’re [outlawing share sales] at that stage. That was when we realized a different solution was going to be required.

The pressure to give employees a little bit of liquidity will not go away. Fast-growing businesses are going to see the pressure increase and its a question of resources. The last thing you want to do when you’re the CFO is to hire three people to do stock plan administration because of all of the employees screaming for liquid equity.

The right-of-first-refusal (ROFR) requests are not going to stop as you grow and get more mature and build up a large ex-employee stockholder base. There are always going to be people looking to buy that stock and looking at those ex-employees. The easiest way is to do a broad-based tender and clean up the cap table. A lot of the tenders are set up to align incentives. For example, a current employee can only sell 10%, but ex-employees have to sell 100% or nothing.

Who are the most common buyers on SecondMarket today?

One third is just the company tendering and using their own cash to buy back shares. Two thirds are third parties. Out of those, the most common are mutual funds—75% are mutual funds, the other 25% are hybrid growth hedge funds. The mutual fund involvement is certainly notable. The sheer fact that these companies are waiting so much longer to go public and that value creation is accruing to venture investors is the main impetus for a lot of these mutual funds.

Are you doing more volume now than you were before Facebook?

This year we’ll do the same amount of private company secondary transactions that we did in the years where Facebook was at its largest. That’s notable because the size and velocity with which Facebook was trading during those years was gargantuan. We’ll do on the order of 50 to 60 transactions this year.

After Facebook, SecondMarket had layoffs and scaled back. Have you expanded back to the same size you were in those days, too?

No, we had a significant team. We’ve refined our sales and marketing model so its not as intensive as it was back them. That was over-the-counter, all phone-brokered at the time. We are not a phone broker anymore, we’re a product and technology company. No longer is the focus on trading, so it’s taking as little labor as possible to transact these secondaries.

You’re VC-backed as well. What’s ultimate outcome for SecondMarket?

We have a big market to get into and a few more products on the slate. It’ll be heads down for at least a couple of years.

What’s the future of secondaries?

The trend is towards repeat and recurring [tender offerings], and that is being messaged to employees at the company. People look at [equity] as a lottery ticker kind of. When you run [a tender offer] every year or twice a year, that shifts the way the employees view that stock. This is actually now compensation. It’s not just a lottery ticket. That’s really meaningful, especially for growth companies. Companies can use that as a retention tool, and it can be a meaningful part of compensation.