UPDATE 1-SecondMarket buys InsideVenture

* NY-based SecondMarket buys Silicon Valley InsideVenture

* All-stock deal with NEA, SB Financial Group

SAN FRANCISCO Oct 7 (Reuters) - SecondMarket bought California-based InsideVenture on Wednesday in an all-stock deal, getting into the business of helping late-stage financing in Silicon Valley.

SecondMarket, a New-York based company started in 2004 and best known as a marketplace for illiquid assets, hopes to expand its core business by buying InsideVenture, which helps introduce investors to companies in need of capital.

Under the deal, venture capital firm New Enterprise Associations (NEA) and Silicon Valley Bank [SIVBV.UL] unit SVB Financial Group will together get less than 5 percent equity in SecondMarket, according to Mark Murphy, head of public affairs at SecondMarket.

Further financial terms were not disclosed.

"We look to expand our position as the leading marketplace for private company stock," said SecondMarket Chief Executive Barry Silbert in a statement.

InsideVenture chief executive Mona DeFrawi said the company would aim to match venture-backed companies to investment banks and major investors.

Chuck Newhall, general partner and co-founder of NEA, said in an interview the new arrangement will help those who have left start-ups to sell their shares privately.

It would also help provide a more transparent way for investment banks and investors to do business for growing, young companies that have become profitable but need further investment, he said.

"We believe that SecondMarket has the right model to help fill the gap that exists in the capital formation process as a result of the systemic issues that have arisen in the public markets over the past decade," Mark Heesen, president of the National Venture Capital Association, said in a statement.

SecondMarket said it has facilitated over $1 billion in investor transactions in 2009, and now has over $200 million worth of private company stock available for sale. (Reporting by David Lawsky; Editing by Gary Hill)