Secondaries
Key points to help you spot value and avoid pitfalls in secondary deals.
March 10, 2025
·
X
min read
Secondary investments offer a way to access promising startups, usually with lower risk than early-stage deals. Instead of betting purely on future potential, you’re working with real traction and tangible performance data - often at a discount compared to future valuations.
Still, lower risk doesn’t mean no risk. While secondaries reduce some of the speculation, thorough research remains crucial, especially since liquidity is not instant once you make a purchase. Whether you’re a savvy investor or exploring this market for the first time, here’s what to look for before committing to a secondary deal.
Your first priority is to assess the company's fundamentals.
Pro tip: Use publicly available reports, investor updates, and market research to gather insights into the company’s trajectory. The company’s Press Room is a great starting point.
Not all shares are created equal. The type of equity you’re buying determines your rights and protections.
Pricing is a critical factor in secondary investments.
The broader economic environment can significantly impact a startup’s prospects.
Action: Research industry-specific trends and macroeconomic factors that could influence the company’s performance.
A secondary transaction’s structure can make or break its attractiveness. Carefully review the deal terms:
Action: Work with a legal or financial advisor to evaluate the fine print and avoid surprises.
Secondary investments often appeal because of their relatively shorter time to liquidity, but it’s essential to assess this carefully.
Action: Look for evidence of a clear path to liquidity and analyze the startup’s potential for achieving exit milestones.
Be cautious of:
Secondary investments can unlock exciting opportunities, and are a great way to invest in high-growth startups while potentially shortening your path to liquidity. But success - as you define it - depends on your ability to thoroughly evaluate deals. From analyzing financial fundamentals to understanding deal structures and exit timelines.
At SeedBlink, we’re committed to helping investors navigate the secondary market with clarity and transparency. Explore our platform to discover vetted secondary opportunities that align with your investment goals.