Venture firm Industry Ventures reports that the secondary market, an informal venue for buying and selling shares in private companies, is set to handle $122 billion in assets in 2025, up from $25 billion in 2012. Once viewed as a last-resort option for desperate sellers, this market has become a central feature of venture capital investing. Bloomberg notes that the secondary market was once dismissed as costly and opaque. However, it now offers investors a vital route to liquidity. Sam Lawson, Founding Partner at Flywheel Capital, told Bloomberg, “The notion of buyers on the secondary market being mostly distressed asset investors is outdated.”Still, the secondary market faces a persistent challenge with transparency. Private firms often disclose far less than public companies, forcing secondary buyers to operate with limited insight into financials or upcoming funding plans. This lack of visibility makes it harder to price deals accurately, especially when buyers and sellers have conflicting valuation expectations.
Additionally, external market volatility is accelerating interest in secondaries. U.S. tariffs have unsettled financial markets, prompting companies like pay-later provider Klarna and ticketing platform StubHub to delay their IPOs. Even before this, IPO activity was underwhelming. Bloomberg reports that IPOs raised $164 billion last year, a steep drop from a peak of $641 billion three years earlier. Mitchell Green, CEO of Lead Edge Capital, told Bloomberg, “We’re expecting our secondaries team to become increasingly active, as the secondary market remains one of the few viable paths to liquidity.” QED Investors’ Amias Gerety added in a conversation with PYMNTS, “These are big, real companies, but can they be aggressive right now? No. Everyone’s sitting on their hands and saying, ‘Let’s wait and see.’” For CFOs, this shift signals the need to rethink liquidity strategies. As public exits stall, secondaries offer both opportunity and risk, demanding tighter control over valuation, investor mix, and exit timelines.
