As startups stay private longer, the market for buying and selling shares in venture-backed companies before they go public has become increasingly active — and heated.
EquityZen has been operating in that market since 2013. The New York-based company operates a marketplace for shares of privately held companies, giving employees and other shareholders a way to sell stock before a company goes public or is acquired.
Morgan Stanley announced plans to acquire EquityZen in October 2025 and completed the deal in January 2026, bringing the company under the investment bank’s umbrella.
Phil Haslett, who co-founded EquityZen and serves as its chief strategy officer, has had a front-row seat to the secondary market’s evolution. Crunchbase News spoke with Haslett about what secondary-market pricing says about today’s most sought-after startups, why AI companies are commanding premiums while many older startups trade at discounts, what the IPO market looks like beyond its biggest names, and why investors are taking a closer look at hard tech.
The following conversation has been edited for length and clarity.
Crunchbase News: The second quarter was one of the strongest venture-backed IPO quarters since 2021, but SpaceX drove much of that activity. If you remove SpaceX, how open is the IPO market for the typical late-stage startup?
Phil Haslett: Generally, I’d say it’s better than it was three or six months ago. If you were a private late-stage technology company, you probably were going to wait until after SpaceX anyway, so that hurdle is gone.
Tech markets are also doing well. The stock market is at an all-time high, and there’s been a strong recovery in tech stocks overall. I assume that we’re gearing up for a busier summer than usual.
Another thing to consider is IPO performance beyond SpaceX. Some have had initial enthusiasm followed by a slowdown. Cerebras has come down a bit. So companies may see it as a good time to go public, while post-IPO performance has been, in a word, “meh.”
But within AI, I think we’ve seen that there’s opportunity up and down the production curve — from energy for data centers, to the technology inside them, to orchestration of compute, to efficient spending on training and inference. There are a lot of interesting companies along that spectrum, and I think that bodes well for companies in the space that want to go public.
A few companies entered your Top 20, including Figure AI, Project Prometheus, Redwood Materials and Scale AI. Does that reflect a durable shift away from traditional software, or are investors chasing a small group of scarce, high-profile hard-tech companies?
Haslett: I think it reflects a thematic shift. The companies entering that list generally fall into AI infrastructure, space tech and robotics.
If those are industries we think will have generational growth opportunities, the logical conclusion is that each sector will have winners. SpaceX gets people thinking about opportunities in space and space tech, and by extension defense tech.
The same applies to AI infrastructure. If the market is that big, and we’ve seen companies go public over the last year or so, it stands to reason investors will be interested in other companies in that space. I think that’s more important than simply chasing scarce supply.
These businesses tend to be more capital intensive and may take longer to reach predictable revenue than a traditional SaaS company. How are secondary investors underwriting them?
Haslett: If a company needs more capital, investors have to decide whether the overall opportunity is big enough to justify waiting longer and having the company raise more.
If you have to build a factory or get regulatory approval, that can delay the company’s ability to increase its valuation or reach an exit. Investors discount that into what they’re willing to pay.
Secondary investors are making the same calculus as primary venture and growth investors, so you’d imagine much of that is already baked into headline valuations from primary raises.
What’s changed is that capital-intensive companies now have more financing options. Five or six years ago, a battery company or new chip manufacturer might have had little choice but to raise equity. In 2026, more credit and asset-based financing options are available.
That matters because if one of these companies underperforms or has a distressed asset sale, creditors and lenders get paid first. Secondary investors have to factor that in, too.
EquityZen says the average transaction occurred at a 38% discount to the last funding round, while many AI transactions traded at premiums. What does that say about how bifurcated the private market has become?
Haslett: I don’t know if it’s a mispricing. There are essentially two vintages of private companies right now.
Some companies weren’t built AI-first and have had to adapt. Many raised during the go-go years of 2021, at very high valuations, and may not have raised since. They’ve had to rethink their strategies, which can slow growth and execution. That gets reflected in the discount.
Then there’s a new wave of companies, from 2023 and beyond, that were built with an AI-first mentality. They started from a clean slate, may operate more efficiently, and have a cleaner story for the market.
Some of those companies are raising rounds in quick succession at higher valuations. Secondary investors may pay a premium because they believe the company’s trajectory is clear and the next valuation increase could happen quickly.
Airtable is an example from the 2021 cohort. It raised at roughly a $10 billion-plus valuation and just sold for substantially less. It’s still a good business, but when investors compare 20% growth with newer companies going from zero to hundreds of millions in revenue in just a few years, you can understand why their appetite changes.
We may see more companies from that era sell for less than where they raised in 2021.
Over the past few years, many private companies have conducted secondaries because they weren’t ready to go public. When should founders consider establishing a company-approved secondary program?
Haslett: Historically, companies started thinking about liquidity programs after they’d been around five, six, or seven years, largely to reward employees for their patience and provide liquidity to early investors.
Now we’re seeing younger companies engage in controlled liquidity and tender offers.
One reason is talent retention. There are only so many engineers and data scientists, and companies need to compete for them. Secondary liquidity has become more normalized.
More solutions are available than before. Morgan Stanley, for example, has significantly grown its tender-offer activity as investor interest and available tools have expanded.
There’s also more investor appetite. Investors are increasingly willing to gain ownership through tender offers or secondary transactions. Five years ago, that was far less common.
Right now, it’s a very founder- and employee-friendly environment, and investors are willing to support secondary liquidity because they want access. If markets turn, that pendulum could shift back.
For investors considering private-company shares, what does a secondary-market price tell them compared with the valuation at the company’s last fundraise?
Haslett: I think it gives them the true price.
A primary valuation is a point-in-time measure of what investors were willing to pay, and those investors generally received preferred stock with additional rights and liquidation preferences.
The secondary market is more telling of what you could actually get in your pocket now. For companies that embrace secondary liquidity, those prices help employees, former employees and early investors understand what their shares are actually worth.
How does EquityZen calculate popularity and distinguish durable investor demand from curiosity or hype?
Haslett: Our platform allows investors, typically retail accredited investors, to tell us what they’re interested in. They can browse companies, review our analysis, and indicate which companies they would invest in, if shares became available, and at what size.
That gives us a real-time metric of what our user base wants to invest in and how much. It helps guide where we spend our time bringing opportunities to clients.
The last thing we want is to work with a shareholder when we can’t find a buyer, or with a buyer when we can’t find shares for sale.
What does the recent consolidation in the secondary market tell you about how the market is evolving?
Haslett: There was a lot of attention toward the end of 2025 around consolidation in the secondary-market space. Forge went to Charles Schwab, and EquityZen went to Morgan Stanley.
To me, that reflects market growth, increasing adoption of secondary liquidity, and the fact that the biggest financial institutions are paying attention. I don’t expect that to change.
Your data showed that some software companies began trading at premiums again in the second quarter. What separates those gaining investor confidence from those still trading at deep discounts?
Haslett: Execution. Leadership and execution.
It’s about a company’s ability to take a legacy SaaS business and turn it into something AI-enabled across the business. Are you using AI tools to improve internal tasks? Are you building AI into your product for clients?
Companies that can combine the stickiness and customer loyalty they’ve already built with their domain expertise and AI are going to do just fine. The ones that are slower to adopt are going to get pummeled.
Six months ago, there was concern that when a company like Anthropic announced a cybersecurity or legal tool, companies in those sectors would immediately lose value. I think some of that was a knee-jerk reaction.
Customers already using your software have some patience, but they also expect you to keep improving the product and give them a reason not to switch. The companies that are slow to react, or too proud to react, are the ones I think will get hit hardest.
SAP, Oracle and Salesforce 1 are examples of software that is deeply ingrained in large enterprises. If companies can keep their products working well and keep adapting them, they still have a shot at being successful standalone businesses. It comes down to management execution.
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Illustration: Dom Guzman
