Equity
The rise of retail investors in secondaries, and why delayed IPOs will become the norm
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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Quick takeaways
- Retail investors are now driving the secondary market, comprising 86% of transaction volume, which challenges traditional investment norms.
- The trend of delaying IPOs suggests a shift towards private market financing, positioning secondary markets as vital liquidity options for startups.
Deep dives
Rise of the Secondary Market
The secondary market is experiencing significant growth, driven largely by retail investor participation, which accounted for 86% of transaction volume in the last quarter. As companies are delaying their IPOs, this shift has created a demand for alternative liquidity options, allowing investors to buy and sell shares in private companies. The emergence of platforms like EquityZen and Forge Global aims to democratize access to these opportunities, providing lower barriers for accredited investors to engage in secondary transactions. This trend suggests a transformative shift in how investors can participate in private equity, although it raises concerns regarding the complexities and risks involved.
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