![]() ![]() Preferred and Common Stock in private companies grew dramatically over the last three years – a steady supply of founders, employees and venture funds that hold direct shares in companies (typically 1-3 percent of the direct venture capital market transact in secondary market). ![]() The basis of our estimate is predicated on the steadily growing supply of sellers in the market, coming primarily from the following three sources: A Steady Supply of Sellers to Drive the Market This is being driven by several tailwinds, including growing allocations to venture capital, extended time horizons for startup exits, increased investor demand for liquidity and the proliferation of new secondary deal structures, resulting in a large and expanding venture secondary market. Leveraging publicly disclosed data, along with our proprietary internal information, we believe the venture secondary market will grow to over $130 billion in 2023. Having operated as one of the leaders in the venture secondary market for over 20 years, we’ve watched this market evolve first-hand as different investment structures developed, different seller types began seeking liquidity and various sources of supply emerged. Different reports use different methodologies, which result in a wide range of estimates. 1,2 Internally, we continue to see both seller supply and transaction volumes grow and believe the market is still underpenetrated by almost any measure.ĭespite increased attention, the venture secondary market remains difficult to size compared to other financial markets secondary transactions occur in many forms including share transfers, LP transfers and fund recapitalizations, continuation funds, etc., and none of these are consistently reported or publicized. We believe the global total addressable market for venture secondary transactions reached $100 billion in 2021 and is on track to exceed $130 billion in 2023. Since the US now only accounts for less than half of the global venture capital market, we’ve broadened this report to include the international market as well. In Q3 2019, Industry Ventures published “ How Big is the Secondary Market for Venture Capital?”, which detailed our estimate of the size of the US secondary market for venture capital as well as a discussion around the driving forces behind the market’s growth.
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