[sohailprasad]

"It exists for one reason only - shareholders of pre-IPO companies don't want to wait years and hence are willing to trade their shares for immediate cash."

Yes, secondary markets are designed to provide liquidity to shareholders in pre-IPO companies. At the same time, most investors who want access to pre-IPO stocks have no ability to participate. Value creation has increasingly shifted from the public markets toward private markets. Consider eBay, which was valued at $32 million in 1996 and went public with a $1.9 billion valuation in 1998 (a 60x gain), compared to Twitter which went public in 2013 at a $24 billion valuation, a 657x gain from their $35 million valuation in 2007.

Why should those who are extremely wealthy and well connected be the only investors with access to such investments?

[maaku]

Because you cherry-picked the examples and chose not to mention the vast majority of companies who's value went to zero?

[sroussey]

Indeed, if one could pick so well, then the public market is a great place and more liquid.