You’ve heard about venture capital investing in startups. But there’s another market you might not know about: the secondary market where people buy and sell existing stakes in private companies.

The mechanics are similar to when when you buy a stock on the NYSE, you’re usually buying from another investor, not directly from the company. The VC secondary market works similarly, except you’re trading shares in private companies that aren’t publicly listed.

The Size of the Secondaries Market

The US VC secondary market reached $61.1 billion in annual transaction volume as of Q2 2025. That sounds huge, but to put it in perspective: it represents only 1.9% of total unicorn value and about 32% of traditional VC exit value, which is usually achieved through IPOs and acquisitions.

This gap highlights there is massive demand for liquidity in private markets, but supply remains limited.

Why Timing is Critical for Investors

Here’s a key insight from the data: companies that raised money recently trade much more actively and at better prices. Startups with funding rounds in the past 18 months capture 68.8% of trading volume and trade at discounts of only 0% to 8.5%.

If you compare that to companies that last raised money during the 2020-2022 boom, they trade at discounts of 31% to 59%.

The rationale behind this is that market is repricing these companies to reflect the current reality 

Access to Secondaries Remains Limited

Most secondary trading concentrates on a few big names. In Q2, just 20 companies accounted for 88.4% of transaction volume. Why? Information asymmetry. When investors can’t easily access company financials, they stick with recognizable names.

However, this creates an opportunity. As the market matures and more information becomes available, trading should spread to a broader range of private companies.

What This Means for Investors

The secondary market is evolving from a small, concentrated marketplace into an important liquidity channel for venture capital. If you’re thinking about private market investing, understand that liquidity depends heavily on company quality, recent fundraising activity, and available information.

The secondaries market is expected to keep growing significantly as operational improvements reduce friction and more investors gain confidence. Nonetheless, one must remember that discounts often signal problems, not bargains. In venture capital, quality matters more than price.

Ready to go deeper?

Understanding the secondaries market is just one piece of the venture investing puzzle. At GSA Ventures, our training sessions give aspiring investors the tools to navigate opportunities like secondaries with confidence—covering valuation, deal structuring, and how to spot quality startups beyond the hype.

Join our upcoming investor training sessions and start building the knowledge to make smarter investment decisions.