In my previous newsletter, I dealt with the mechanics of selling your membership in an SPV. We are no longer in a “buy and hold for 10 years” world as we see the dawn of the era of secondary syndicates and the secondary market for private assets. Funnily enough, SyndiCat seems to have missed this window to replace his baby toys with big boy toys!
Investors have been extensively tapping the secondary markets for liquidity as the secondary deal volumes in 2025 surged 41% y-o-y to $226 billion (per Evercore Inc. report on private secondaries)! So why did this happen?
2025, the breakout year for Secondaries
According to the Evercore report, the following set the trend for secondaries going forward:
- Pricing Realism: Unlike previous year, in 2025 the market reached an equilibrium on the “Magnificent Seven” centicorns of private tech (SpaceX, OpenAI, Stripe, Databricks, Fanatics, Canva and Anthropic). Venture stakes in them started trading at a consistent 10–15% discount to their last primary rounds. This has likely set the market standard for the rest of the secondaries.
- GP-Led Continuation SPVs: A large portion of secondary deals has started to flow from fund managers moving their best companies out of an aging fund into a new SPV / fund, with the intention to hold it for another 5 years.
- The Rise of “Solo Secondaries”: Platforms like Propel(x) have made it so easy to spin up an SPV that individual syndicate leads are now competing with the giant secondary funds to buy $5M–$10M blocks of shares from early employees.
But what differentiates the Primary SPV from a Secondary?
Primary vs. Secondary
In a primary SPV, the asset pricing is often about signaling and “up rounds” and future potentials. In the secondary market, the price is about the reality of current market demand for the asset. The second point of difference, like I already mentioned, is that secondaries are typically priced at 10%+ discount to the last primary. This discount is possibly also reflective of a more moderate risk in the secondary compared to that in the primary. Finally, an important distinction is in the speed of their respective closings with secondaries typically being much faster (4-8 weeks) compared to primaries that could take months of negotiations.
Talking about the speed of closing for secondaries, there is one catch. The secondary deals get done faster ONLY if the asset comes free of ROFR. Here’s why…
The ROFR Survival Guide
The biggest threat to your Secondary SPV is the Right of First Refusal (ROFR). ROFRs are built in by the underlying companies to protect their right to control who gets on their cap table. While it may be reasonable for them to ask for ROFRs, this could allow them to “snatch” your secondary deal.
So the smartest move for syndicators might be to negotiate away these ROFRs to start with. However, if they are in place, then best play nice with the company CFO and launch your capital call only after you have a soft waiver from them. If the company wants the shares, they’ll tell you early, saving you the embarrassment of returning capital to your LPs.
Final Remarks
The secondary market is no longer a ‘nice-to-have’; it’s the release valve for the next era of venture capital. Keep an eye out for secondary deals; they bring their own set of opportunities, both for exits and entries!
Being alert makes you a cat with the cream, not a cat in the box!
If you’re looking for more information, you are welcome to browse Propel(x) SPVs page. If you want to discuss starting your own SPV…
Cheers!
