Secondaries are turning locked-up wealth into real liquidity

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For years, owning startup equity meant playing the long game. You’d wait (often a decade or more) for an IPO or acquisition to cash out. That’s changing. Secondaries are turning illiquid paper gains into real money, and fast.

What was once a closed-door negotiation among VCs is becoming a viable liquidity path for founders, employees, and early investors alike. And in a market where exits are fewer and later, secondaries are becoming the exit.

What are secondaries?

Secondaries are when someone sells their shares in a private company to another investor before the company goes public or gets acquired.

That could be a founder who’s been building for 8+ years and needs cash to buy a home. Or an early employee who took a lower salary in exchange for equity -and now wants to finally access some of that value. Or it could be an early investor who’s ready to de-risk and rotate capital into new deals.

In other words: secondaries turn paper wealth into real liquidity.

Until recently, the only way to get paid for your equity in a startup was to wait for an “exit” - usually an IPO or a big acquisition. But exits are taking longer than ever. And life doesn’t wait.

Secondaries solve that.

They allow existing shareholders (founders, employees, early investors) to sell some (or all) of their stake to a new buyer. That buyer could be a VC doubling down, a secondary fund, or a new investor who wants access to a hot late-stage company that’s still private.

These aren’t new in theory, but until recently they were tightly controlled and rarely accessible. Now, with startups staying private for 10–15 years, secondaries are becoming a standard feature of the startup lifecycle.

And if you’re a private market investor? It opens up a new lane: backing high-growth companies before they go public, without having to be in the earliest rounds.

Why secondaries are booming now

The rise of secondaries isn’t just a trend, it’s a necessity.

Startups are staying private longer than ever. In the early 2000s, a tech company might IPO in 4–5 years. Today, it's closer to 10–15. That’s a long time to ask employees, founders, and early investors to sit tight with no liquidity. Especially when personal financial milestones (buying a home, starting a family, diversifying your assets) don’t wait for an IPO.

At the same time, the IPO window is all but shut. The public markets have become more cautious, more scrutinised, and frankly, less appealing. Going public means more regulation, more pressure, and often lower valuations. Many companies just… don’t bother anymore.

So what happens to all that wealth trapped in private company shares?

Enter secondaries.

They give people a way out (or at least a way to realise part of the value they’ve helped create). And demand is growing on both sides:

• For sellers, it’s a chance to unlock real value from equity that might otherwise stay illiquid for years.

• For buyers, it’s a way to back proven, late-stage startups at a (sometimes) more rational price than those overheated early rounds.

And let’s not forget: secondaries aren't just about exits. They’re increasingly part of funding rounds themselves. Investors are writing cheques that include both primary capital (for the company) and secondary (to buy out early stakeholders). It keeps founders motivated, rewards early employees, and brings in new strategic capital - all without going public.

That’s why secondaries are booming. They're no longer the exception. They're fast becoming part of the playbook.

The new secondaries market looks different

The secondaries game used to be hush-hush. A few insiders trading favours behind the scenes. Founders might quietly sell a sliver of equity to a friendly VC. Employees often didn’t even know it was possible. And even if they did, 82% of companies didn’t allow it.

But that’s changing, fast.

A new class of platforms and buyers has emerged, making secondaries more transparent, more structured, and more common. Think of them as the "exchanges" of the private markets: they connect sellers with buyers, help manage compliance, and even help determine fair prices. Still far from perfect, but miles ahead of where the market was a few years ago.

On top of that, we’re seeing companies themselves embrace secondaries more strategically.

Founders are baking liquidity into late-stage funding rounds - not just as a perk, but as a retention and motivation tool. VCs are pushing for structured secondary programs to clean up messy cap tables and double down on winning companies. Employees at unicorns are negotiating for periodic liquidity windows, especially as the dream of a near-term IPO feels more distant.

And perhaps most importantly: the buyers are different now.

It’s no longer just old-school funds or late-stage VCs. Family offices, institutional investors, even retail-aligned secondary funds are getting involved. Why? Because secondaries offer access to high (growth private companies without the wait) and often at a discount.

It’s not the wild west anymore. It’s a proper marketplace. Still messy, still evolving - but far more open than it used to be.

What we’re really seeing with secondaries isn’t just a new liquidity option - it’s a fundamental shift in how private markets operate.

Secondaries used to be a workaround. A last resort if you couldn’t wait for an IPO. Now, they’re a feature.

That signals something important: private markets are finally growing up.

We’re moving from a system where liquidity was binary (you were either stuck or you exited) to one where liquidity is dynamic. Where you can unlock value along the journey, not just at the end.

And that changes everything:

• For founders, it means you don’t have to wait a decade to benefit financially from the company you’re building.

• For employees, it means stock options actually become real money—not just a theoretical upside you hope materialises someday.

• For early investors, it means you can rebalance, take chips off the table, or recycle capital into the next wave of innovation.

• And for new investors, it means access to late-stage private companies without needing to be on the cap table from day one.

In short: secondaries are cracking open the private market ecosystem. They're helping turn long-term, locked-up bets into more flexible, fluid capital. That makes the entire market more attractive, more investable, and more accessible.

This isn’t just about liquidity. It’s about momentum. Optionality. Control.

And it's one more sign that the old rules of wealth creation are breaking down. The playbook that said “work for 40 years, wait for your equity to mature, retire at 65” is being rewritten, in real time.

What we’ve been working on at Shuttle

• Announcing our latest hire on Linkedin 👨‍🚀 

• Counting down to our first Product Hunt Launch 🚀 

• Rolled out our first ad campaign 📣 

The Unsophisticated Investor is brought to you by Scott & Rob, the founders of Shuttle. We’re both sick of private markets being a playground exclusive to the ultra-wealthy so we started a company to challenge the status-quo. Shuttle’s singular focus is to unlock private markets for Millennial and Gen Z tech professionals and help them build wealth through the highest performing private market opportunities.

Scott & Rob
Shuttle Co-Founders