An overview of trading of equity securities of private, pre-IPO companies in the secondary market. This note examines how and why this trading sharply increased on secondary marketplaces such as SecondMarket and SharesPost, who stands to win and lose and the myriad issues that active secondary trading creates for companies. In addition, this note addresses the securities law issues raised by such trading, including the available registration exemptions and the practical steps companies can take to protect against some of the consequences of active secondary markets.