Equity The rise of retail investors in secondaries, and why delayed IPOs will become the norm
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Apr 30, 2025 Jared Carmel, the founder of Manhattan Venture Partners and a veteran in the secondary market since 2009, discusses the transformative rise of retail investors in secondary markets. He highlights how platforms like EquityZen are democratizing access to private shares, raising questions about risk versus opportunity. Carmel believes this shift is a 'once-in-a-generation opportunity' that could delay IPOs, serving as a 'pressure relief valve' for startups. He also examines how this changing landscape creates a flywheel effect for venture capital.
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IPO Sluggishness Extends Privatization
- The sluggish IPO market acts as a pressure relief valve for startups, enabling them to stay private longer.
- This extended privatization period allows companies to perfect their business models without the pressures of public markets.
Secondary Liquidity Delays IPOs
- Secondary markets provide liquidity for employees, shareholders, and venture funds without forcing IPOs.
- This reduces premature public offerings driven by liquidity needs rather than readiness.
Retail Investors Face Asymmetry Risks
- Retail access to secondary markets is growing but still requires accredited investor status.
- Informational asymmetry and complex share terms make these investments risky for uninformed retail investors.