Why AdValorem Built a Research Practice Around Pre-IPO Secondaries: The 2026 Liquidity-Gap Window

The thesis in one sentence: The venture ecosystem holds an enormous stock of privately-held equity that cannot exit through traditional IPO channels fast enough — which means the secondary market for pre-IPO shares has become a structural feature of private markets, not a temporary workaround. That is why pre-IPO secondaries are a primary research vertical for AdValorem, and why we publish on this topic weekly.

1) The deployment-exit mismatch: a $267B problem in a single quarter

According to the Q1 2026 PitchBook-NVCA Venture Monitor, Q1 2026 saw $267.2 billion in venture deal value — exceeding every full-year total in history except 2021 and 2025. Q1 2026 exit value hit $347.3 billion, the highest quarter on record. Those numbers look healthy until you strip the outliers: without the five largest deals and exits, deal value falls by 73.2% and exit value falls by 86.6%. The underlying market remains deeply concentrated, and for the vast majority of venture-backed companies and shareholders, liquidity is still tight.

The IPO window reflects the same bifurcation. Forge Global's January 2026 analysis counted just 24 IPOs in 2025 — a modest improvement, but a far cry from the exit velocity needed to clear a decade of venture formation. The companies that could list in 2025 (Figma, Klarna, Circle, CoreWeave) are not representative of the broader late-stage portfolio. For every Figma — which ended its first trading day up 250% — there are hundreds of companies holding 2021-vintage valuations with no near-term IPO path. The potential mega-listings of SpaceX, OpenAI, and Anthropic could generate nearly $2.5 trillion in exit value, but those are singular events for singular companies. The rest of the market needs other solutions.

2) Secondary platforms are growing into the gap

The secondary platforms that operate in this space — Forge Global, EquityZen, Hiive, Caplight, and others — have collectively seen dramatic volume growth as the liquidity gap has widened. The broader private market secondary ecosystem reached $240 billion in total transaction volume in 2025, a 48% year-over-year increase, according to Jefferies' 2025 Global Secondary Market Review. First-half 2026 volume is expected to exceed $100 billion based on transaction backlog alone, with annual volume potentially approaching $300 billion within the next 12 to 24 months.

At the company-share level — the pre-IPO secondary market specifically — the growth signals are equally striking:

• EquityZen reported that deal volume on its platform nearly doubled from the first half of 2024 to the first half of 2025, with AI, information technology, and fintech leading activity in Q3 2025.
• Hiive saw monthly active users grow 398% year-over-year in 2024, with institutional users up 106%. The ratio of bids to listings rose to a record 1.3x in December 2024, indicating that buy-side demand is meaningfully outpacing available supply.
• Caplight, which focuses on institutional-grade pricing and data for late-stage private companies, has tracked over $10 billion in proprietary VC secondary trade data and $3 trillion in VC funding round data — building the price discovery infrastructure the market has historically lacked.

The structural driver is straightforward: investors and employees who hold private company equity accumulated during the 2019–2022 venture boom need exit paths, and the public markets are not absorbing it at scale. Secondary platforms are providing the alternative infrastructure.

3) The discount-to-last-round math and what NAV resets look like

One of the most important mechanics in pre-IPO secondary investing is the relationship between transaction prices and the company's last primary funding round — the "discount to last round." EquityZen's Q3 2025 Secondary Spotlight data found that only 14% of deals on the platform closed at a premium to the last round. The average company traded at a 29% discount to its last round of funding in Q3 2025.

That 29% figure requires context. For companies with strong fundamentals and active investor demand — particularly in AI, infrastructure, and high-growth SaaS — secondary trades have been clearing at or above the last primary round. Forge Global's December 2025 data showed median trade premiums of -11% (a discount, but narrowing from -15% in November), with the 90th percentile of trades clearing at a 91% premium in December. The market is not uniformly discounted — it is dispersed.

The NAV reset story is really a tale of two cohorts. The 2021 vintage — companies that raised at peak multiples on forward revenue projections that have since been rationalized — often retain internal marks that still reflect those elevated round prices. The secondary market has, in many cases, already repriced these companies to reflect current-year growth rates and revised public market comparables. A company marked at a $10 billion valuation on its last round may be clearing in the secondary market at $6–7 billion, reflecting a genuine reset that primary marks have not yet captured. For investors who can source and underwrite these transactions with current data (Caplight's pricing feeds, Forge's market indices, EquityZen's transaction history), that gap between the stale primary mark and the live secondary price is the research opportunity.

Jefferies' data adds another layer: venture and growth LP fund interests traded at an average of 78% of NAV in 2025, compared to 92% for buyout and 91% for credit. That 22-point discount-to-NAV for venture reflects the market's view that the vintage-year markdowns have not fully flowed through to LP statements — and that secondary buyers expect to be compensated for taking on that uncertainty.

4) Tender offers and structured liquidity programs: the issuer-led channel

The third leg of the pre-IPO secondary market is the issuer-led liquidity program — most commonly, a tender offer through which the company (or a large outside investor) purchases shares from employees, founders, and early-stage holders at a company-determined price. This channel has grown substantially as companies have recognized that liquidity is a retention and recruitment tool, not just a capital markets event.

The data on adoption is striking. PitchBook data cited by Hiive indicates that approximately 25% of unicorns have publicly disclosed a secondary transaction since 2020. In 2024 alone, five companies in Hiive's top-50 index disclosed formal tender offers; three additional companies were reportedly planning tenders for 2025. OpenAI ran a $1 billion tender in 2023 and a $1.5 billion SoftBank-led tender in 2024. SpaceX ran tenders at $400 billion (July 2025) and $800 billion (December 2025) valuations, with Caplight's secondary market tracking consistent institutional demand between those events. Databricks conducted a $10 billion non-dilutive investment that functionally served as a structured employee liquidity program.

The regulatory environment has also shifted in favor of faster execution. On April 16, 2026, the SEC's Division of Corporation Finance issued an exemptive order reducing the minimum tender offer period from 20 business days to 10 business days for qualifying private company issuer self-tenders. That change — effective immediately — directly reduces the administrative burden and valuation-fluctuation risk for companies running structured liquidity programs, and is expected to encourage more private issuers to adopt the format. It is a concrete example of market infrastructure catching up to market practice.

Company approval rates for third-party secondary transfers have also improved: Hiive's data shows approval rates rising from 67% in 2023 to 72% in 2024, and 90% of submitted transfers resulting in successful transactions for sellers. The issuer-permissiveness trend is real and directional.

5) Why AdValorem covers this — and what we publish

Pre-IPO secondaries sit at the intersection of three things AdValorem tracks: (1) structural dynamics of the late-stage venture market, (2) mechanics of private market pricing and valuation, and (3) the practical tools available to sophisticated participants who want to understand — not just observe — how private equity gets priced and transferred before a public listing.

Our research on this vertical includes:

• Weekly Secondary Spotlight notes — short-form analysis of platform data (Forge, EquityZen, Caplight, Hiive), transaction trends, notable tender offers, and pricing observations across high-profile names.
• Deep-dive ebooks — longer-form educational pieces on mechanics: how to read a secondary price signal, how tender offer workflows operate, how to interpret discount-to-last-round data across sectors, and how platform structures differ.
• Discord community threads — ongoing discussion where members share data, debate pricing, and work through real examples from the market.
• Weekly Substack research — narrative analysis of secondary market developments, cross-referenced with primary deal activity, public market comp sets, and regulatory changes.

The reason AdValorem built this practice is not simply that the market is growing. Pre-IPO secondaries are hard to research without continuous attention: data is fragmented, pricing is opaque, platform mechanics vary, and the regulatory environment is actively evolving. The participant who walks into a secondary transaction with an outdated mental model pays for that gap. Our job is to close it.

The window we are watching

The 2026 liquidity-gap window is defined by a specific tension: more venture capital has been deployed in recent years than at almost any point in history, the IPO market is partially open but structurally concentrated, and secondary platforms have scaled to meaningful volume — but the bid-ask spread between seller expectations and buyer pricing still reflects genuine uncertainty about where the cycle goes next. Cambridge Associates' benchmark data shows that since the beginning of 2022, US VC managers have called 1.6x more capital than they have distributed — a ratio that was flipped in the prior decade. That asymmetry is the liquidity gap in quantitative form, and it is why AdValorem has structured its research calendar around this moment.

If this thesis resonates with your portfolio focus, we would love to discuss the research further.