How to invest in unicorn shares on the secondary market

Founders of successful startups are often wealthy only "on paper." In reality, many founders continue to live on a salary that may be incommensurate with the theoretical value of their stake, which is only available for sale in 3–5 years at IPO.

The secondary stock market gives founders the opportunity to partially monetize their stake before exit. By selling a small portion of their shares (typically 5–15%), founders can address basic financial needs while maintaining control and interest in growth.

Experienced founders often synchronize the sale of part of their shares with major funding rounds, which allows them to minimize negative perception by the market and investors. However, information about such deals rarely becomes public, since it can be perceived as a signal of the founder's lack of confidence in the company's prospects.

Like founders, ESOP holders often become active participants in secondary deals when liquidity needs arise, such as when purchasing housing, obtaining education, or due to personal financial circumstances.

Employee share sales often encounter corporate barriers. The boards of directors of many startups actively resist secondary transactions, fearing dilution of shareholder structure and potential conflicts of interest. Companies implement mechanisms restricting share transfer and requirements for right of first refusal to the company itself.

Some large startups, such as Stripe, Airbnb, and Carta, have employee share buyback programs, organizing regular liquidity windows during which option holders can sell a certain percentage of their shares to company-approved investors.

Early investors (angels and venture funds) often become active participants in the secondary market due to objective economic constraints of the venture model. A typical venture fund has a lifespan of 10-12 years, after which it must return funds to its investors (LPs). When companies remain private for longer periods, secondary sales become a necessary mechanism for ensuring liquidity.

Factors prompting early investors to sell shares on the secondary market include the need to demonstrate returns (DPI) to raise funds for subsequent funds, portfolio diversification and risk management, as well as capital reallocation to new projects with potentially higher returns.

Financial intermediaries form the secondary market infrastructure and include investment banks, specialized funds, and marketplaces such as EquityZen, Forge Global, and Nasdaq Private Market. Intermediaries not only connect sellers and buyers but also provide pricing, legal deal structuring, and regulatory compliance.

The economic model of intermediaries is based on agency fees ranging from 2% to 10% of the transaction amount depending on complexity and deal size. Additionally, many intermediaries develop supplementary services such as comprehensive private company analytics, syndicated investment organization, and deal structuring advisory, which creates additional revenue streams and strengthens their positions in the secondary market ecosystem.