Booming Public Markets Drive Surge in Startup Share Secondary Market

The secondary market for startup shares is getting a boost lately, thanks to warming public markets. Startups that raised capital during the previous venture boom are finally being valued by late-stage startup markets. Tiger Global Management is an example of a firm that has had to sell individual stakes in its portfolio companies after failing to sell a basket of its stakes. This market trend
has resulted in venture investors snapping up secondary shares in startups. According to a report by Insider, some VCs are even looking to secondary markets to buy shares in the hottest AI startups. Although this uptick in secondary market activity is not new, the volume of shares being offered by sellers greatly outweighs interest from buyers, institutional buyers are slowly coming back to scoop up secondary stakes.
Data from secondary exchange Caplight shows that bids for secondary shares perked up after tech stocks plummeted in early 2023. The seller pessimism and modest buyer optimism combination has seemingly done the trick to improve tech valuations slightly. As a result, there is a smaller bid-ask spread between buyers and sellers of secondary shares. So, as a buyer, you can buy stakes in startups for cheap, why not pick and choose?