Fund Structure
Secondary Market
The market for buying and selling existing private company shares or LP interests in VC funds — providing liquidity before traditional exit events.
The secondary market enables investors to sell private company shares or fund LP interests before a traditional exit (IPO or acquisition). Secondary transactions have grown significantly: from $10B in 2012 to $100B+ annually. Key players: secondary funds (HarbourVest, Lexington Partners, Greenspring/StepStone), direct secondary platforms (Forge Global, Nasdaq Private Market, Carta), and broker-dealers facilitating large block trades. For LPs, secondaries provide liquidity and portfolio rebalancing. For employees and founders, secondaries allow early liquidity without waiting for IPO. For buyers, secondaries offer lower risk (companies are more mature) and potentially better pricing (sellers accept discounts for liquidity). Secondary transactions require company consent (ROFR) and proper documentation.