Private Secondary Trades Set Market Price
Andrea Walne, GP at Manhattan Venture Partners, on getting on the cap table
This is really about shifting price setting power away from bankers and toward the company’s own trading history. When a company lets shares change hands privately before going public, it gets a live record of what real buyers will pay, who is buying, and how demand moves over time. That matters most for direct listings, where the exchange uses a reference price and opening order flow instead of a traditional IPO bookbuilding process.
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Secondary trades create an audit trail. Instead of one negotiated funding round setting the headline valuation, management can look at repeated employee, founder, and investor sales across time. That gives finance teams a trend line, not just a snapshot, and helps them judge where a public market opening price will clear.
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This became especially important as direct listings emerged. NYSE describes the direct listing opening price as being determined from buy and sell orders, with the reference price only as a starting point. Prior research on Spotify and Slack points to heavy private secondary activity before listing, which helped establish that starting point.
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The deeper implication is that private secondaries are not just employee liquidity anymore. They become part of the company’s market structure. Platforms like Forge, EquityZen, Zanbato, Nasdaq Private Market, and Carta were built to make these trades easier to organize, settle, and control, while still letting issuers manage who gets onto the cap table.
Going forward, more late stage companies will treat secondary liquidity as a standing finance function, not a one off exception. The companies that run orderly, repeated private trading programs will enter direct listings, tender offers, or other public paths with a clearer sense of fair value and more control over how price discovery happens.