Startup Funding Espresso What Are Secondaries
What Are Secondaries Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Secondaries stands for secondary sales which refers to selling privately held stock in startups to other buyers. This arises from several sources such as investors who want to get into the deal after the fundraise is complete or employees who want to sell some of their shares. Secondary sales are on the rise since companies are staying private much longer.\xa0 Investors often want to apply some of their startup capital into companies in the three years before an anticipated IPO as investing in the first three years of the startup\u2019s life translates into a long holding time. There are many sources of secondary shares including: Employees at companies doing well. Websites that match investors to startups. Venture funds that focus on secondary sales. A secondary sale is different from a fundraise as the latter involves issuing more stock thus diluting the existing shareholders. A secondary sale is a transfer of ownership and therefore there\u2019s no dilution to the current investors.\xa0 Most secondary sales come with a three-day lockup before re-selling the shares. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .