Pre-IPO Secondaries

The market for secondaries is one of the most interesting alternative investments right now.

Lots of companies are popping up, all with the aim of facilitating investor access to pre-IPO shares of privately held companies (AKA secondaries).

Today, the secondaries market is in flux. After a meltdown in valuations over the past few years, prices seem to be stabilizing.

Investor demand, meanwhile, is higher than ever. Secondaries funds are raising tons of cash – even though average investors still struggle to get access.

Considering how much stronger pre-IPO returns are than post-IPO returns, it’s no surprise that the market is growing.

Traditional VCs have been hesitant to tap the secondaries market to sell startup shares, where valuations can be lower than traditional exits – but investor demand for liquidity often leaves them little choice.

All in all, Silicon Valley hasn’t always made trading startup shares easy. But with new platforms like OpenVC and Sandhill Markets coming online (not to mention Destiny, the world’s first ETF for pre-IPO unicorns), the size of this market looks set to expand significantly in the near future.

Recently Published

jack richardson

Investing in Pre-IPO Secondaries

As startups delay going public, secondary markets have popped up to trade pre-IPO shares. But what are the pros and cons? Is now a good time to buy? Explore in this guest post by Jack Richardson.

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