Fund Structure
Secondary Sale
The sale of existing shares by founders, employees, or early investors to new investors without the company issuing new shares.
A secondary sale (or secondary transaction) involves existing shareholders selling their shares to new buyers — no new capital goes to the company. Common secondary scenarios: early employees or angels who want liquidity before an IPO, founders taking some chips off the table in a large growth round, or VC firms selling stakes in portfolio companies to secondary buyers. Secondary transactions have grown into a large, institutionalized market. Major secondary buyers include Lexington Partners, HarbourVest, and Coller Capital for VC fund stakes; and firms like Forge Global, Carta, and Equityzen facilitate individual share transactions. Companies typically have right of first refusal (ROFR) on secondary sales, allowing them to buy shares before they're transferred to an outside party.