THE SECONDARY MARKET BOOM

How startup employees are cashing out without an IPO – and why private liquidity is the new exit

DENVER, Colorado – For most of startup history, there was only one way for employees to turn their stock options into real money: wait for an IPO.

That could take a decade. If it happened at all. And if the company succeeded. Many did not.

But that brutal calculus has changed.

Over the past three years, a new ecosystem of secondary markets has emerged – platforms that allow employees, early investors, and even founders to sell their shares to private buyers long before a public offering. The result is a revolution in startup liquidity, one that is reshaping compensation, retention, and the very meaning of "building for the long term."

The numbers are staggering. According to Forge Global, one of the largest secondary trading platforms, $60 billion in private shares changed hands in 2025 – up 150% from 2023. Carta and Hiive have seen similar growth. And the trend is accelerating.

"Employees used to have one lottery ticket: the IPO," says Kelly Rodriques, CEO of Forge Global. "Now they have multiple liquidity events along the way. They can buy a house, pay for college, diversify their portfolio – all while staying at the company. That is a game‑changer."

The Problem Secondary Markets Solve

To understand why secondary markets are exploding, you have to understand the pain they solve.

In the old model, a startup employee would receive stock options with a four‑year vesting schedule. They would work hard, watch the valuation go up, and feel rich – on paper. But that paper wealth was trapped. They could not sell until an IPO or acquisition, events that might never come.

The result was "golden handcuffs" : employees stayed at companies not because they wanted to, but because leaving meant forfeiting unvested options or holding illiquid shares. The system discouraged mobility, punished risk‑taking, and concentrated risk in a single stock.

Secondary markets break those handcuffs. Employees can now sell vested shares to accredited investors – often at a discount to the last valuation, but for real cash – without waiting for an IPO. The company usually has the right of first refusal, but many startups now actively facilitate secondary sales.

"We went from 'you cannot sell until we exit' to 'you can sell up to 20% of your vested shares every year,'" says Henry Ward, CEO of Carta, the cap table management platform that now powers secondary liquidity programs for over 2,000 startups. "That is a fundamental shift in the social contract between founders and employees."

The Big Three Platforms: Forge, Carta, and Hiive

Three companies dominate the secondary market landscape, each with a slightly different approach.

1. Forge Global (San Francisco) – The Marketplace Pioneer

Forge (formerly SharesPost) is the oldest and largest secondary trading platform. It operates an exchange where accredited investors can buy and sell shares of private companies. Listings are curated; not every startup is eligible. But the ones that are – Stripe, SpaceX, Databricks, Plaid – see significant volume.

"We have over $15 billion in assets under administration and over 1 million accredited investors on our platform," says Rodriques. "When a SpaceX employee wants to sell $500,000 in shares to buy a house, we can make that happen in days, not months."

Forge went public via SPAC in 2021 and trades under the ticker FRGE. The stock has struggled, but the underlying business continues to grow.

2. Carta Liquidity (San Francisco) – The Integrated Solution

Carta started as a cap table management tool – the system startups use to track who owns what. But the company realized that managing ownership is only half the problem; the other half is unlocking that ownership.

Carta Liquidity allows companies to run tender offers – structured secondary sales where the company or a third‑party investor buys shares from employees at a set price. Unlike Forge's open marketplace, Carta Liquidity is controlled by the company, ensuring that sales do not disrupt the cap table or violate securities laws.

"We have facilitated over $10 billion in liquidity for employees across 500+ companies," says Ward. "And we are just getting started. Every startup with more than 50 employees should have a liquidity program. It is table stakes for recruiting."

3. Hiive (Vancouver / San Francisco) – The Challenger

Hiive is the new kid on the block, founded in 2022 by a team of former investment bankers. The platform uses an automated matching engine to pair buyers and sellers, similar to a stock exchange. Hiive claims to offer better pricing and lower fees than the incumbents.

"We saw that the secondary market was opaque and inefficient," says Mike de Andrade, Hiive's CEO. "Sellers did not know if they were getting a fair price. Buyers did not know where to find inventory. We built a transparent, regulated exchange to solve both problems."

Hiive has processed over $5 billion in trades since launch and recently raised a $50 million Series C led by Mosaic Ventures.

The Company‑Led Tender Offer: A Case Study

Not all secondary liquidity happens on public platforms. Many startups run company‑led tender offers – a structured process where a single buyer (often a new investor or the company itself) purchases shares from employees.

SpaceX has run several tender offers in recent years, most notably a $750 million buyback in late 2025. Employees were allowed to sell up to 25% of their vested shares at a valuation of $200 billion – a massive payday for early engineers and executives.

"Elon [Musk] believes that employees should share in the upside without being forced to wait a decade," says a former SpaceX employee who participated in the tender offer. "It is one of the reasons retention is so high. You can sell some shares, buy a house, and still have plenty of upside left."

Other companies that have run successful tender offers include Stripe, Databricks, Canva, and Discord. In each case, the process was carefully managed to avoid flooding the market or signaling weakness.

The Downside: What Can Go Wrong?

Secondary markets are not without risks. For employees, the biggest danger is selling too early. A share sold at a $10 billion valuation might be worth $50 billion five years later. That is the opportunity cost of liquidity.

For companies, secondary sales can complicate future fundraising. If shares are trading at a steep discount on secondary markets, new investors will demand a lower valuation. And if too many employees sell, it can signal a lack of confidence.

"The secondary market is a thermometer," says Lena Zhao of Menlo Ventures, whom we quoted in our first article. "When we see a startup's shares trading at a 40% discount, we know something is wrong. It is usually high burn or bad unit economics."

There are also regulatory risks. The SEC has been scrutinizing secondary platforms, concerned that they might be operating as unregistered exchanges. Forge, Carta, and Hiive are all registered as broker‑dealers, but the regulatory framework remains unsettled.

The Future: Continuous Liquidity

The ultimate goal of the secondary market movement is continuous liquidity – the ability to trade private shares as easily as public stocks. That is still a long way off. Private companies are not required to disclose financials. Trading is restricted to accredited investors. And most companies still control who can buy and sell.

But the trend is clear. More startups are embracing secondary programs. More employees are demanding them. And more capital is flowing into platforms that facilitate them.

"In ten years, the idea of waiting for an IPO to get liquidity will seem as quaint as waiting for a dividend check," says Carta's Ward. "Employees will expect to be able to sell shares on a regular schedule – quarterly, semi‑annually, or even continuously. That is where we are headed."

The Bottom Line: A New Deal for Startup Employees

The secondary market boom is not just about money. It is about agency – giving employees control over their own financial lives.

For decades, startup employees were told to work hard, trust the process, and wait for a payout that might never come. Many burned out. Some walked away with nothing. Others stayed in jobs they hated because their wealth was trapped.

Secondary markets change that. They allow employees to take some chips off the table while still staying in the game. They reward early contributors without forcing them to gamble everything on a single outcome. And they make startup careers more sustainable, more attractive, and more humane.

"The unicorn dream was always a lottery ticket," says Forge's Rodriques. "Liquidity programs turn it into a salary. That is not just better for employees. It is better for the entire ecosystem."