Information Gaps Driving Secondary Discounts

The real bottleneck in private secondaries is not lack of buyers, it is lack of trusted information. In practice, many off cycle buyers price stock by applying a blanket discount to the last round because they do not get fresh financials, board materials, or direct company access. In a thin market, that means a company can materially outperform while the bid barely moves, so quoted prices often reflect uncertainty and market structure more than business performance.

• Dan Akivis describes buyers sticking to the same 50% discount even after a portfolio company raised at more than 2x its prior valuation. That is a sign that the buyer is anchoring to stale heuristics, not updating on what changed inside the business.
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• This is common in private markets because most trades are bilateral, low volume, and slow to settle. Buyers and sellers can agree on a price, then still wait weeks or months for approvals and transfer mechanics, which makes each quoted level a weak signal compared with a public market price.
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• The market has responded by moving toward issuer controlled tenders and aligned platforms. EquityZen argues fragmentation across brokers, SPVs, and side deals distorts price and slows liquidity, while recurring company supported programs create cleaner price discovery and more confidence for both buyers and sellers.
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The direction of travel is toward more structured liquidity windows, tighter issuer involvement, and better data layers around private companies. As that infrastructure improves, discounts should become more company specific and less formulaic, which will make secondary prices more useful as signals and make off cycle liquidity easier to execute.