Private Shares Trading Above Last Round
Ani Banerjee, co-founder of Andromeda Group, on secondary diligence and companies staying private
A premium in a late stage secondary usually means scarcity has overwhelmed the normal illiquidity discount. In most private deals, common stock changes hands below the last preferred round because buyers are taking transfer friction, weaker rights, and cap table complexity. But in the hottest names, buyers are paying for access to a business they expect to keep compounding into IPO, so demand can push common shares up to, or above, the last round price.
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The baseline is still a discount. Common shares in secondaries often trade 15% to 30% below the last round, and pricing depends on what security is being sold, how deep the preference stack is, and how close the company is to IPO, when preferred and common converge.
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Premium trades happen when access is the real product. In 2020 to 2021, cash flooded into a small set of elite private companies, flipping the old pattern. One example was Stripe secondary trading at a 453% premium to its prior preferred round, showing how rare supply can outweigh structure discounts.
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This is why tender offers often miss the true clearing price. In a dataset of 64 tender offers, 83% were priced at or below the last round and participation averaged 37%, suggesting employees often sold too cheaply while the most competitive off market blocks could command better pricing.
As companies stay private longer, the gap between ordinary secondaries and premium scarcity trades should widen. The best late stage names will increasingly trade like quasi public stocks with private market access constraints, and that makes secondary pricing a live signal of company quality, not just a mechanical discount to the last round.