Explainer
Secondary Market
Trading of existing private shares
Where existing shareholders sell private-company shares to other buyers.
In a primary sale, a company issues new shares and receives the money. In a secondary sale, an existing shareholder sells shares they already own, and the company receives nothing.
Secondary markets give employees and early investors a way to get liquidity before an IPO. They also let new investors buy into well-known private companies, usually at negotiated prices and with transfer restrictions.
Prices on the secondary market can be above or below the last funding round, which makes them a useful signal of demand.
Illustrative explainers. Figures in examples are hypothetical.