An IPO drought pushes investors to a murky marketplace

Behind the Money

In Silicon Valley, the promise of a massive payday for a start-up’s early employees and investors has hinged on those companies eventually going public or being sold off. But with the slowdown in initial public offerings and acquisitions, a different marketplace is set to heat up this year. It is called the venture secondary market, and it’s where both investors and early employees can trade their stakes in privately-held companies. The FT’s venture capital correspondent George Hammond explains the potential pitfalls of this opaque marketplace and why investors will be rushing to it in 2024.

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For further reading:

Investors raise billions to buy discounted stakes in start-ups

Carta customers say platform tried to trade their shares without consent

Carta shuts trading platform after data privacy breach allegations

Staying private: the booming market for shares in the hottest start-ups

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On X, follow George Hammond (@GeorgeNHammond) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.

Read a transcript of this episode on FT.com

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