Market Insight Update: Marketable Secondary Names

Given the market reset which followed the valuation boom in 2021, select secondary issuers are more marketable to investors than others. Companies that have raised a recent round, or adjusted their 409A, in the past two years are more likely to have interested buyers as they have a fresh benchmark in terms of valuation. As no investor wants to purchase shares in a company that potentially could have a down round in the future, no news is bad news in this market.

Companies that disclose ARR numbers are easier to transact, as investors can underwrite using public competitors to arrive at a bid price. Since public company performance directly correlates with private market performance, investors can bid with conviction in names that opt to disclose.

Lastly, companies in broad industry verticals —such as software, fintech, and increasingly, AI —are more likely to transact as they have generalist appeal. Investors can invest based on macro-economic trends and other widely available information. . For more niche industries, an experienced independent broker with deep industry ties and cutting-edge research tools can enable investors to make informed decisions and parse esoteric reporting to better evaluate company performance.

Rainmaker Securities offers a myriad of secondary investment opportunities in later stage growth names. Proceed to RainmakerX to explore these names.