Secondary Transaction (Secondaries)
A secondary transaction is the sale of an existing stake in a fund or startup to a new buyer, giving early investors, founders, and employees liquidity before an IPO or acquisition.
A secondary transaction in venture capital is the sale of an existing stake, whether a limited partner's position in a fund, a founder's or employee's shares in a startup, or a fund's own stake in a portfolio company, to a new buyer rather than through a company's own fundraising round. Secondaries give early investors, founders, and employees a way to gain liquidity years before an IPO or acquisition, when most of a startup's paper value would otherwise stay locked up.
Vintage Investment Partners, founded roughly two decades ago as a $63 million secondary fund focused on Israel, built its business specifically around buying these stakes from limited partners, founders, and employees who want liquidity earlier than a fund's typical 10-year lifecycle allows. The secondary market has grown alongside the broader venture industry, since later exits and longer holding periods before IPOs have increased the demand for interim liquidity options.