Late-Stage Secondaries: Improving Liquidity, Pricing Dispersion, and the Importance of Underwriting
The late-stage secondary market is becoming a more established source of liquidity for venture-backed companies, employees, and early investors. Transaction activity has increased, while secondary prices have recovered considerably from the discounts observed during the 2022–2023 market correction.
Recent research from Rainmaker Securities, Caplight, Nasdaq Private Market, and Carta provides evidence of this development.
Rainmaker Securities reported that its Rainmaker 20 Index advanced 7.01% in Q3 2026, although individual company performance varied significantly.¹ Separately, Caplight reported $3.5 billion in secondary trades captured during 2025, its strongest year since 2021.²
In their 2026 market outlook, Rainmaker Securities' Glen Anderson, Founder and CEO, and Greg Martin, Managing Director, highlighted renewed investor participation in pre-IPO trading following a stronger 2025, while identifying the evolving IPO environment as an important consideration for late-stage private markets.³
While these findings point to increased market activity and stronger demand for certain late-stage private companies, liquidity remains uneven across the broader market.
For investors and capital providers, the important questions are where transactions are clearing, which companies are attracting sustained buyer demand, and whether observed prices accurately reflect underlying business fundamentals.
Where Are Late-Stage Secondary Discounts Moving?
Secondary pricing has recovered considerably from the market dislocation of 2022 and 2023.
According to Forge Global, the median secondary transaction on its platform in August 2026 occurred at a 3% discount to the last primary funding round, compared with 7% in July. During the 2022–2023 downturn, median discounts frequently approached 50%.⁴
However, median pricing conceals substantial differences between individual companies.
Rainmaker Securities' Q3 2026 research illustrates this divergence. While the Rainmaker 20 Index appreciated 7.01% during the quarter, five continuing constituents gained more than 25%, while several others experienced double-digit declines.¹
This dispersion suggests that investors are differentiating between companies based on fundamentals, valuation expectations, and market demand.
Several factors influence secondary pricing:
Financial performance: Revenue growth, profitability, cash consumption, and future financing requirements.
Valuation history: Whether the previous funding round remains representative of current enterprise and equity value.
Liquidity expectations: The anticipated holding period before an IPO, acquisition, or subsequent secondary transaction.
Shareholder rights: Preferred versus common equity, liquidation preferences, transfer restrictions, and other security-specific considerations.
A company's last funding valuation provides a useful reference point, but it does not necessarily represent current fair value or the price at which shareholders can obtain liquidity.
For investors, the relevant measure is the expected return from the actual purchase price, adjusted for dilution, security rights, downside scenarios, and the time required to achieve liquidity.
Transaction Volume Is Rising, but Liquidity Remains Concentrated
Late-stage secondary transaction activity is increasing as investors and shareholders seek additional ways to buy and sell private-company equity.
Nasdaq Private Market reported $673 million in settled block trades during 2025, compared with $372 million in 2024. The number of issuers with settled trades increased from 12 to 31 over the same period.⁵
Caplight's 2025 Secondary Market Update reported $3.5 billion in captured secondary transactions and identified 70 companies that traded for the first time during the year. However, established, actively traded companies continued to account for a substantial share of activity.²
Company-sponsored transactions are also becoming an increasingly important liquidity mechanism.
According to Carta, 71 tender offers totaling approximately $3 billion were administered through its platform during the first half of 2026. Transaction value increased approximately 200% year over year.⁶
These transactions allow eligible shareholders, including employees and early investors, to sell shares through company-organized processes, often while the underlying business remains privately held.
The growing volume of secondary activity is encouraging, but aggregate trading statistics do not necessarily establish broad market liquidity.
Investors should distinguish between companies with consistent institutional buyer interest and those with limited, infrequent, or highly restricted trading activity.
Transaction frequency, buyer depth, bid-ask spreads, transfer restrictions, and the number of active counterparties all contribute to an assessment of realizable liquidity.
These factors are relevant not only to shareholders evaluating exit options, but also to lenders assessing financing secured by private-company equity.
What Discounts and Volume Reveal About Underwriting
As secondary markets develop, observed prices provide an increasingly useful reference for investment decisions. However, market pricing should complement, rather than replace, fundamental underwriting.
Consider two late-stage companies whose common shares trade at a 25% discount to their respective last funding-round prices.
Company A has consistent revenue growth, substantial cash reserves, improving profitability, and limited near-term financing requirements.
Company B is experiencing slowing revenue growth, elevated cash consumption, and potential financing needs that could result in further dilution or a lower future valuation.
Both companies offer the same headline discount, but the underlying investment risks are considerably different.
Secondary investors must evaluate each company's financial outlook, capitalization, shareholder rights, potential dilution, and available exit alternatives.
Investment duration also materially affects returns. A 25% discount to a relevant exit value offers a different annualized return if liquidity occurs after two years rather than six. Moreover, a discount to the previous funding valuation does not guarantee a similar discount to eventual realizable value.
For lenders financing private-company shares, additional considerations become important.
The existence of recent secondary transactions may provide evidence of market demand, but it does not necessarily establish the proceeds achievable in a collateral liquidation.
Lenders must assess the depth of the buyer pool, restrictions on share transfers, applicable shareholder rights, collateral concentration, and potential valuation declines under stressed market conditions.
The distinction between an indicative market price and executable liquidity is especially important when determining collateral advance rates, loan-to-value ratios, and downside recovery scenarios.
Ultimately, a discount alone does not determine whether an investment or financing opportunity is attractive. Company fundamentals, capital structure, market depth, and prospective liquidity remain central to underwriting.
What Founders, Investors, and Capital Providers Should Watch
The growth of late-stage secondaries creates additional opportunities for founders, investors, and capital providers, although the relevant considerations differ.
For founders, secondary transactions can provide insight into investor demand and current market pricing. Company-sponsored liquidity programs may also help address the needs of employees and early shareholders while supporting a longer private-company lifecycle.
For investors, secondary prices provide a reference for evaluating relative value and potential returns. Financial performance, future capitalization requirements, security rights, and the expected timeline to liquidity remain essential considerations.
For lenders and capital providers, secondary transactions can inform collateral valuation and liquidity assessments. However, observed prices must be evaluated alongside transaction restrictions, buyer depth, potential dilution, and stressed recovery assumptions.
Across these groups, several market indicators warrant continued attention: transaction volumes, discounts or premiums to previous funding rounds, the number of companies attracting buyers, and the frequency of company-sponsored liquidity programs.
Together, these indicators provide a more complete view of secondary-market conditions than headline pricing or transaction volume alone.
Reading the Secondary Market Beyond Headline Activity
Late-stage secondaries are becoming an increasingly important component of private capital markets.
Narrower discounts, increased transaction volumes, and expanding company-sponsored liquidity programs indicate meaningful development. At the same time, liquidity remains concentrated, and the pricing environment continues to differentiate sharply among individual companies.
For Axis Group Ventures, an important consideration is how secondary-market pricing connects to underlying enterprise value, capital structure, and realizable liquidity.
The evolution of private secondary markets also creates opportunities at the intersection of equity transactions and credit solutions, including financing secured by private-company securities and other structured liquidity arrangements.
As the market matures, disciplined underwriting, reliable price discovery, and a clear understanding of transaction structures will remain central to evaluating investment and financing opportunities.
Sources
Rainmaker Securities, Rainmaker 20 Index Q3 2026: Private Market Momentum Broadens as SpaceX Goes Public, September 2026.
Caplight, 2025 Secondary Market Update, January 15, 2026.
Rainmaker Securities, Rainmaker 2026 Outlook, January 21, 2026.
Forge Global, Private Market Update: The Great Reset Enters a New Phase of Discounted Acquisitions, September 2026.
Nasdaq Private Market, Secondary Scene: 2026 Outlook, 2026.
Carta, Tender-Offer Activity Reaches a Four-Year High, August 20, 2026.
Note: Market data reflects each provider's transaction coverage, pricing methodologies, and reporting periods. Caplight's captured transactions, Nasdaq Private Market's settled block trades, and Carta's tender offers are distinct datasets and should not be aggregated into a comprehensive market-volume estimate. The Rainmaker 20 Index reflects a selected basket of actively traded companies using a proprietary pricing methodology, rather than a broad measure of all private-company transactions.
About Axis Group Ventures
Axis Group Ventures is a boutique investment banking and strategic advisory firm focused on global debt placement and private-market secondaries for venture- and private equity-backed companies. We work with founders, C-suite executives, and investors to develop and execute customized private-market capital solutions.
For more information, visit www.axisgroupventures.com.
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This blog post is provided by Axis Group Ventures for informational and educational purposes only. It does not constitute investment, legal, accounting, or tax advice and should not be relied upon as such. Nothing contained herein should be interpreted as an offer to buy or sell any securities. Any actual offer or solicitation will be made exclusively through formal documentation provided by the relevant issuer or seller.
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