Venture Secondaries Are Growing. The Market Is Also 86% Concentrated in 20 Companies.

The venture secondary market set records in 2025 — by nearly every measure, volume is up, platforms are proliferating, and institutional interest is accelerating. But the growth narrative obscures a structural reality that most allocators evaluating this space haven't yet fully reckoned with: nearly all of the trading volume concentrates in a handful of elite names, the asset class doesn't fit cleanly into any existing allocation framework, and the infrastructure to support a broader market is still being assembled.

This article explains what the venture secondary market actually looks like right now — not the headline that gets written about it, but the structure underneath — and what it will take for this to become the recognized, investable asset class it is on a trajectory to become.

Why the Market Exists: The Structural Pressure

Venture secondaries aren't a new financial innovation. They're a response to a structural breakdown in the traditional VC liquidity cycle.

US VC-backed IPO listings fell from 198 in 2021 to 42 in 2022, recovering only to 48 by 2025, per IMD's analysis of PitchBook data. Meanwhile, US venture capital assets under management grew from under $400 billion in 2015 to over $1 trillion by 2025. The companies that were supposed to IPO — releasing capital back to LPs who could redeploy it — have instead stayed private, often for a decade or more. Over 40% of active unicorns raised their first venture round more than ten years ago.

The result at the LP level: cumulative cash flows from US venture funds to limited partners have been negative by approximately $197 billion since 2022. Distribution yields fell to 7.5% in 2023 against a historical 15% average. LPs who once expected regular distributions are instead sitting on a decade of illiquid positions with no clear exit horizon. Managers under pressure to return capital — and shareholders who've been waiting years for an IPO that keeps receding — found each other through the secondary market.

This is why volume is growing. Not because anyone designed it to — because the primary exit mechanism collapsed, and something had to fill the gap.

The Scale of the Direct Market

Venture secondary activity occurs across several mechanisms. For allocators evaluating the asset class, the relevant market is the direct secondary: the sale of actual shares in a private company, which is the mechanism through which employees, founders, and early investors access liquidity, and through which buyers purchase exposure to specific private companies.

PitchBook estimated the US direct venture secondary market at approximately $91.7 billion in 2025 — though the opacity of the market means credible estimates range from $62.5 billion to $120.9 billion depending on methodology and what transactions are counted. What's not in dispute: the market has grown materially, and the trajectory points up.

The Concentration Problem: 20 Names, 86% of Volume

Here is the number that reframes the growth story: in Q4 2025, the top 20 companies accounted for 86.4% of global secondary trading value, with the top five alone representing 55.6%, per Hiive platform data cited in IMD's analysis. A single OpenAI tender offer represented 6.2% of full-year US secondary volume. Only 70 new companies saw their first secondary trade across all of 2025.

The companies at the center of this concentration are a known set: SpaceX, Anthropic, Databricks, Anduril, and a small number of others with dominant positions in AI infrastructure, defense technology, and scaled software. These names share a specific profile: enormous private valuations, institutional demand that outstrips available supply, and established secondary markets where buyers and sellers find each other reliably. They are, in the language of the market, meaningfully more liquid than everything else.

Everything else is the important part. The vast majority of the private venture ecosystem — companies that are well-known, well-funded, and in some cases genuinely valuable — exists in a market where trading is thin, pricing is opaque, and liquidity is conditional on finding the right buyer at the right time. These assets aren't simply discounted relative to their theoretical value; many are effectively untradeable at any reasonable clearing price. Companies with 2021-era valuations trade at average discounts of 68%. And the population of companies seeing any secondary trading at all is remarkably small: 70 new entrants in a year when over 1,000 US companies hold unicorn-or-above valuations.

The distinction that matters is between discounting and illiquidity. A company at a 40% discount to its last round has a market, just not a favorable one. A company with no credible buyers isn't discounted — it's untradeable. Most of the private venture universe sits closer to the latter than market growth headlines suggest.

The Allocation Bucket Problem

Set aside for a moment the question of whether venture secondaries represent a good investment. There's a prior question that most allocators — particularly those at family offices, endowments, and RIAs — are still working through: where does this fit?

Venture capital (primary) sits in the "private equity — venture" bucket. It has recognized performance benchmarks, established managers, and decades of data on return profiles, J-curves, and vintage-year comparisons. Private equity (buyout, growth) sits in its own bucket with its own benchmarks. Neither framework maps cleanly onto venture secondaries.

Venture secondaries are not primary venture capital: you're buying existing shares from current holders, typically at a discount, rather than funding a company's next round. You're not exposed to the full duration of the company's private life — you're buying mid-stream, after much of the risk and reward profile has already been set. The J-curve dynamics are different. The IRR profile is different. The due diligence process is different.

Venture secondaries are not traditional private equity buyouts either: you have no control, the assets are common or early preferred stock in companies that may not exit for years, and the governance protections available in buyout structures simply don't exist here. The discount dynamics and return drivers are distinct.

And venture secondaries are obviously not a liquid asset: secondary transactions settle over weeks to months, are constrained by right of first refusal provisions, require company consent in many structures, and have no public market exit. They cannot be sized or managed the way a liquid alternative can be.

The result: many allocators who are genuinely interested in the asset class don't have a bucket for it. They can't size a position without knowing which benchmark to use. They can't evaluate a manager without a peer group. They can't explain to their investment committee how this fits next to the rest of the portfolio without a framework that doesn't yet fully exist in the industry. The interest is real — for many allocators, the opportunity to purchase shares in AI infrastructure leaders at prices unavailable in any public market is genuinely compelling. The institutional infrastructure to act on that interest is not yet fully there.

What's Limiting Breadth: The Infrastructure Gap

The concentration in a few names isn't accidental — it's the predictable result of how the market's infrastructure has developed so far.

Pricing infrastructure is primitive outside the top names. For SpaceX, Anthropic, and Databricks, there are enough transactions, enough platform data, and enough institutional interest that secondary prices are reasonably discoverable. For most other private companies, they are not. A shareholder at a $2 billion venture-backed company — a company that by any measure is not small — often has no reliable way to know what their shares are worth in the secondary market. Without reliable pricing, buyers can't underwrite, platforms can't list efficiently, and sellers can't evaluate whether an offer they receive is fair. The market defaults to the names where pricing already exists.

Right of first refusal complexity concentrates activity where companies cooperate. Most secondary transactions require navigating the company's ROFR provisions — the company's right to match any purchase offer before it closes. For top-tier companies, ROFR processes are established, timelines are known, and experienced buyers have navigated them before. For other companies, the process can be slower, less predictable, and in some cases effectively blocking. Companies that actively support secondary liquidity — running formal tender processes, engaging secondary platforms, waiving ROFR in specific programs — see more volume. The rest don't.

Information asymmetry is severe for most companies. Secondary buyers in the top-tier names benefit from significant public information — press coverage, benchmarked comparables, and in some cases direct disclosure from the company. For most companies, buyers rely on limited available data and must underwrite against uncertainty that only makes sense at a steep discount. That discount deters sellers who believe it understates their actual value — which is often true — and liquidity doesn't clear.

Platform infrastructure is optimized for names that generate volume. Secondary platforms — for-profit businesses that need transactions to survive — naturally build their systems, marketing, and relationships around the assets that generate the most activity. The infrastructure to efficiently facilitate transactions in the long tail of the private market is thinner, less funded, and less mature. The proliferation of SPV structures around the top names is partly a consequence of this: SPVs are how the current market distributes access to the few names where deals actually clear.

The Path to a Real Asset Class

None of the above means venture secondaries won't become a recognized, institutionally investable allocation category — the trajectory is clear. But the path is a build, not a discovery. Specific infrastructure must exist before the market can broaden meaningfully beyond the names that define it today.

Pricing infrastructure must expand to the long tail. Reliable, share-class-specific pricing for a broad universe of private companies — not just the top 20 — is the prerequisite for a functioning market. When a shareholder at a mid-stage company can get a credible estimate of what their shares are worth, and when buyers can underwrite against a pricing framework that goes beyond instinct and comparable guesswork, transactions can happen at scale beyond the elite names. This infrastructure is being built, but it is early.

Standardized reporting and benchmarks must emerge. Allocators need performance data that can be compared across managers and vintages. The same infrastructure that makes buyout benchmarking possible — standardized reporting, audited performance figures, recognized peer groups — needs to exist for venture secondaries. The relevant datasets for this market are nascent. Building them requires years of reported data and institutional adoption of common reporting standards.

Regulatory clarity must settle. Secondary transactions in private securities occur in a regulatory environment that is still evolving — accredited investor definitions, broker-dealer requirements for platforms, disclosure standards for SPVs, and the treatment of various transaction structures all carry ongoing uncertainty. The FINRA 2026 Annual Regulatory Oversight Report's flagging of misrepresentation and disclosure failures in pre-IPO investments signals that this remains a live issue, per IMD's reporting. Regulatory clarity doesn't mean deregulation; it means settled rules that sophisticated market participants can plan around.

More companies must engage with secondary activity. As company-organized tender processes become more common — and as more companies recognize that secondary liquidity is a retention and cap table management tool — the universe of companies where secondary transactions are practical will expand. The growth in company-friendly secondary programs is real and accelerating. It won't be universal soon, but the direction is clear.

Earlyasset's view: this is a three-to-five year build, not a twelve-month event. The infrastructure being assembled now — pricing platforms, regulatory frameworks, standardized reporting, established deal flow — will determine the breadth and depth of the market in 2028 and 2030 more than anything that happens in secondary trading volume in 2025 or 2026. The market is real. It is also early, concentrated, and still building the plumbing it needs to become the asset class that the headline growth numbers imply it already is.

Earlyasset, Inc. does not provide investment advice and is not a registered investment adviser. Pricing estimates are algorithmic and do not constitute an offer to buy or sell securities. All transactions respect the company's right of first refusal (ROFR) and any transfer restrictions in your equity agreements. Direct liquidity is provided by Earlyasset Capital, LLC, a separate entity from Earlyasset, Inc.

Source note: Market size, volume, and concentration data in this article is sourced from PitchBook's 2025 Annual US VC Secondary Market Watch, as cited and analyzed by the IMD (International Institute for Management Development) in their research piece on the rise of venture capital secondaries (April 2026). Hiive platform data cited in IMD's analysis covers Q4 2025 trading activity. Company-specific references (SpaceX, Anthropic, Databricks, Anduril) reflect publicly reported information as of April 2026. Earlyasset is not affiliated with any of the companies named in this article and has no non-public information about any of them. Shareholders and allocators considering transactions should consult their own legal, tax, and financial advisors before acting.

Not investment advice. This article is general analytical content. It is not a recommendation to buy, sell, or hold any specific security, nor an endorsement of venture secondaries as an investment for any particular allocator's portfolio.