secondary sale

Definition

Selling existing shares to other investors rather than the company issuing new shares, allowing early shareholders to get liquid without diluting anyone. The financial equivalent of sneaking out the back door.

Example Usage

I did a $500K secondary sale in the Series C, which my co-founder interpreted as 'abandoning ship' but I call 'rational liquidity.'

Origin

Securities trading terminology adapted to private markets in the 1990s

Fun Fact

Secondary sales exploded in the 2010s as unicorns delayed IPOs, creating a whole ecosystem of firms like SharesPost and EquityZen.

Source: Private securities trading terminology

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