SeedBlink Blog

But what if you could fast-forward the clock, invest in companies with mature roots, and harvest returns sooner? That’s where secondaries come in—a strategic addition to any portfolio, offering diversification, quicker liquidity, and potentially reduced risk.

Let’s explore how seasoned investors are leveraging secondaries to reset their portfolios, mitigate risk, and maximize returns.

The evolution of startup investment strategies

Traditional startup investing focuses on primary rounds, where investors subscribe new shares directly in a company to fund its growth. These investments are high-risk, high-reward, with timelines stretching 7–10 years or longer before a potential exit. While this approach can yield outsized returns, it also requires patience and a tolerance for uncertainty.

Secondaries, by contrast, offer a different playbook. Instead of investing in companies at their earliest stages, secondary investors acquire shares from existing shareholders, typically in startups that have already achieved significant milestones. This shift in strategy allows investors to recalibrate their portfolios and tap into opportunities with clearer trajectories.

Why Secondaries?

Diversification Across Maturity Stages

Primary investments are inherently speculative, focused on startups in early growth phases. Secondaries allow investors to complement these high-risk bets with shares in later-stage companies. For instance, a balanced portfolio might include early-stage SaaS startups from primary rounds alongside pre-IPO fintech leaders acquired through secondaries.

Reduced blind pool risk

In primary rounds, you’re often betting on a company’s future potential. With secondaries, you’re investing in known quantities—startups with established revenues, solid customer bases, and proven business models. This transparency reduces uncertainty and enhances decision-making.

Faster liquidity

Secondary investments often involve companies closer to exit events like IPOs or acquisitions. While primary investments may take a decade to mature, secondaries can deliver returns in 2–5 years, resetting the clock for investors seeking quicker capital recycling.

Access to market leaders

Many market-leading startups are no longer raising primary funding but offer secondary opportunities through platforms like SeedBlink. These deals provide exposure to top-tier companies that might otherwise be inaccessible.

Portfolio Strategies for Secondary Investors

1. Start with a Mix

Combine primary and secondary investments to create a balanced portfolio. Primaries provide exposure to early-stage innovation, while secondaries add stability and liquidity. For example, if your portfolio includes early-stage investments in AI startups, consider secondaries in established AI unicorns to diversify risk.

2. Focus on sector trends

Secondary markets allow investors to capitalize on sector-specific trends. In 2023, for instance, fintech and climate tech dominated secondary deal flow, reflecting broader shifts in venture capital priorities. Aligning your secondary investments with these trends can position your portfolio for future growth.

3. Leverage discounts

Secondary shares often trade at a discount to net asset value (NAV). This can be particularly advantageous during market downturns when liquidity pressures lead to more favorable pricing. In 2023, late-stage startups offered average discounts of 10–20%, presenting attractive entry points for savvy investors.

4. Rebalance regularly

Use secondary transactions to rebalance your portfolio and free up capital for new opportunities. If a startup’s valuation has plateaued, selling through the secondary market can help you lock in gains and reinvest in higher-growth companies.

Looking Ahead: Secondaries in 2025

As the secondary market matures, its role in portfolio construction will continue to expand. Industry forecasts suggest global secondary deal volume could surpass $130 billion in 2025, driven by increased demand for liquidity and growing participation from institutional investors.

In Europe, platforms like SeedBlink are democratizing access to these deals, allowing individual investors to participate alongside institutions. With the rise of dedicated secondary funds and innovations like GP-led transactions, secondaries are poised to become an indispensable part of the venture capital ecosystem.

Secondaries are a strategic lever for building resilient, high-performing portfolios. By incorporating secondary investments, startup investors can balance risk, access mature companies, and achieve faster returns.

At SeedBlink, we’ve designed our Secondaries platform to empower investors with access to Europe’s most exciting growth-stage startups. Whether you’re new to secondaries or looking to refine your strategy, the time to reset your clock is now.

Explore secondary investment opportunities with SeedBlink.