Secondary market volume for private company shares hit a record $85B in 2026, according to Forge and Nasdaq Private Market data. That’s up from $52B in 2024 and reflects a perfect storm: LP liquidity needs, founder and employee desire for early liquidity, and a growing buyer base of family offices and crossover funds willing to take on illiquid exposure at a discount.
The surge has been driven partly by the extended IPO drought. With fewer companies going public, secondary sales have become the primary liquidity mechanism for early shareholders. Companies like Stripe, SpaceX, and Databricks have run structured tender offers to provide liquidity without a full IPO.
When Founders Should Consider Selling
Founders should consider secondary sales when: (1) they’ve been building for 7+ years with no near-term exit, (2) they hold a large percentage of the company and want to de-risk, (3) the company has strong traction and can attract buyers at reasonable prices, or (4) they need liquidity for personal reasons. Selling 5–15% of holdings is common; selling more can signal lack of conviction.
The optimal timing depends on company trajectory. Selling when the company is performing well often yields better prices—buyers pay for growth. Selling during a downturn or before a difficult round can lock in lower prices. Some founders use secondary sales to diversify without reducing their operational commitment; others use them to address personal financial needs like buying a home or funding family expenses.
Pricing and Process
Secondary buyers typically demand 20–40% discounts to the last primary round. For companies with uncertain prospects, discounts can exceed 50%. The process usually involves a broker (e.g., Forge, SharesPost) or a direct tender. Companies can run company-led tenders to control the process and set minimum prices.
The 2027 Outlook
Secondary activity is expected to remain elevated as the IPO window stays narrow. For more on founder secondary strategies, see our playbook. Founders weighing liquidity options should model scenarios carefully. The private markets are maturing, and secondary liquidity is a key part of that evolution.
Practical Considerations
Before pursuing a secondary sale, founders should: get board approval, understand tax implications (consult a tax advisor), and consider the signal to employees and investors. Selling a small percentage (5–10%) is rarely controversial; selling 25%+ may raise questions. Time the sale to coincide with positive company milestones when possible—it supports better pricing and sends a confident signal. The $85B secondary market represents a fundamental shift in how private company shareholders access liquidity.
Forge and Nasdaq Private Market data shows secondary volume up from $52B in 2024 to $85B in 2026. The surge reflects the extended IPO drought—secondary sales have become the primary liquidity mechanism. Companies like Stripe, SpaceX, and Databricks run structured tender offers. Secondary buyers typically demand 20–40% discounts; for uncertain prospects, discounts can exceed 50%. The process usually involves a broker (Forge, SharesPost) or direct tender. Company-led tenders let you control the process and set minimum prices.
The optimal timing depends on company trajectory. Selling when the company is performing well often yields better prices—buyers pay for growth. Selling during a downturn or before a difficult round can lock in lower prices. Some founders use secondary sales to diversify without reducing operational commitment; others address personal financial needs. The key is alignment: get board approval, understand tax implications, and consider the signal to employees and investors. Selling 5–15% is common; selling more can signal lack of conviction.
What This Means for Capital Allocation
The implications of secondary markets surge founders extend beyond individual deal dynamics. At the portfolio level, fund managers are rethinking concentration versus diversification, adjusting follow-on reserves, and recalibrating exit timelines. The most successful allocators are those who combine rigorous quantitative analysis with deep sector expertise and founder relationship networks. As the Indian venture ecosystem matures, these structural shifts will increasingly determine which funds deliver top-quartile returns and which fall behind. Smart capital — not just more capital — will define the next chapter of Indian venture investing.
Dive deeper: This article is part of our comprehensive guide — Startup Exit Strategies: IPO, M&A and Beyond.
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