Secondary Sale

Also called Secondaries and Secondary Market

A sale of existing shares from one holder to another, rather than the company issuing new shares. Lets founders or early employees and investors take some money off the table before an exit.

Why it matters

Secondaries give founders and early team liquidity without waiting for an IPO or sale, which can relieve pressure and reduce the urge to sell the whole company early. Terms and buyer approval usually run through the company.

For example

At Series C, a founder sells 2 crore of their existing shares to an incoming investor in a secondary, taking some money off the table without the company selling.

Worth your time

Related terms

Right of First Refusal Liquidity Event Exit

Go deeper

See how founders actually handle this on Raising your first round, part of the Starting Up hub.

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