Longer Private Timelines Drive Secondaries
Ani Banerjee, co-founder of Andromeda Group, on secondary diligence and companies staying private
Longer private timelines turn startup equity from a clean promise of future upside into a liquidity management problem that companies have to actively solve. Once a company stays private for 10 plus years instead of 4, early angels, seed funds, and long tenured employees start needing cash for fund cycles or life events, which is why secondaries become a core part of late stage financing rather than a side market.
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The shift is visible in market structure. The median company going public was taking about 10 years, and 11.5 years for tech, versus 4 years in 2000. At the same time, 2019 had 237 private rounds of $100M or more versus 76 VC backed IPOs, so companies that once would have listed are instead raising giant private rounds.
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That is why sellers in secondaries are often not distressed. They are early angels, seed funds, and ex employees whose mandate or personal timeline no longer matches a multibillion dollar company. Secondary sales let later investors replace them without issuing new shares, which helps refresh the cap table without dilution.
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The practical consequence is a new class of infrastructure. Brokered trades, tender offers, and issuer controlled platforms exist because long private lives create two needs at once, partial cash outs for existing holders, and real price discovery before an IPO or direct listing. Spotify is the clearest example of using repeated private liquidity events to build that pricing history.
The market is heading toward more companies operating in the middle ground between fully private and fully public. As late stage rounds stay large and private ownership periods keep stretching, the winners will be companies that can offer regular liquidity, keep control of who buys in, and use those trades to prepare for eventual public market scrutiny on their own timeline.