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What Secondary Positions Are Actually Being Bought via SPVs?

The private secondary market has evolved dramatically over the past few years, with special purpose vehicles (SPVs) becoming the dominant mechanism for trading positions in private companies. 

But what exactly are investors buying and selling through these syndicated deals? 

We frequently talk about the buying aspect of secondaries, but have never really talked about who is selling or what shares are typically available to be purchased via SPVs.

Recent data from Sydecar, a leading SPV platform, provides fascinating insights into the types of securities changing hands in today's secondary market. Between May 2024 and May 2025, Sydecar facilitated 345 secondary deals with an average size of $1.8 million, revealing clear patterns in how different stakeholder groups monetize their private company positions (before an IPO or M&A). The data shows a striking preference (and opportunity) for multi-layered structures, with 73% of deals on Sydecar structured as LLC/LP interests in SPVs rather than direct secondary purchases.

Let’s get into this week's post!

Who's Selling What?

There’s a lot of different types of stock to purchase via secondary transactions. In this section we will break down the most frequently available options to buy via SPVs.

1. Early Employee Common Stock 

Common shareholders from early employees represent one of the most active seller categories in the secondary market. These individuals typically joined startups when equity compensation offered substantial upside potential if the company performed well. Years later, as companies mature and remain private longer, these employees face a classic dilemma: significant paper wealth with no immediate path to liquidity (unless the company is doing tender offers, which is rare).

Employee common stock sales often involve smaller individual positions ranging from $50,000 to $500,000, though senior employees or those who joined exceptionally early may have positions worth many millions. Complicating matters, these options are sometimes non-transferable, or must be exercised to transfer ownership—which can be expensive for the employee. The challenge for employees is that their common stock sits at the bottom of the liquidation preference stack, typically forcing these shares to trade at a discount versus preferred, putting some sellers off. 

According to Sydecar, 19% of all secondary transactions on the platform purchased common stock, however of the direct secondary SPV’s 67% purchased common stock.

2. Founder Common Stock: 

Founders selling common stock face unique considerations beyond simple liquidity needs. Unlike employees, founders must navigate board approval processes and the delicate politics of selling while asking employees and investors to remain committed to the long-term vision. In short, founders would prefer not to signal anything negative when they are partially cashing out (some portion) of their own company.

Founder secondary sales typically occur in later-stage companies where the founder's percentage ownership has already been significantly diluted through multiple funding rounds. A founder who once owned 20-30% of a company might find themselves with 2-5% after Series C or D rounds, making partial liquidity less threatening to their control position. 

At Riverside, we’ve bought founder secondary as early as Series A, but more likely in Series B rounds or later, or at least that’s when it starts to be common for founders to sell a small position. The positions typically being sold to our syndicate at the A or later has been $100k to $500k, and likely a VERY small portion of a founder's ownership here. 

3. Early Angel Investors

Angel investors from a company's earliest rounds often hold preferred stock. Angels are also individual investors rather than institutional funds, making them potentially more flexible on pricing and timing for secondary sales.

There are many angel investors who invested in companies very early (pre-seed/seed) so by the time the company hits Series B or later, and there is a meaningful markup, they are frequent candidates to sell a portion or all of their position to a syndicate lead as a secondary transaction.

We’ve bought secondary from a number of notable and not-so-notable angel investors who invested very early in some of the most high growth companies. 

4. Pre-Seed/Seed/Early-Stage Fund Positions

Smaller funds that invested at pre-seed, seed or Series A rounds often become sellers in the secondary market for portfolio management reasons rather than conviction issues (although it could be lack of conviction in some cases). A $50 million fund that made a $1 million investment in a company's Series Seed/A might find that position has grown to represent 15-50% of the fund's net asset value as the company has appreciated.

Fund managers in this situation face concentration risk and may need/want to provide liquidity to their own LPs. Selling a portion of an appreciated position allows the fund to lock in gains while maintaining upside exposure. 

These preferred positions can become attractive to secondary buyers like us and other syndicates depending on the company.

5. Growth Stage Fund Positions

Large growth-stage funds like Tiger Global, Coatue, or General Atlantic often make substantial investments in later rounds, sometimes investing $50-200 million in a single company. When these funds decide to sell secondary positions, the transaction sizes can be enormous, often requiring multiple layers of SPVs to accommodate the capital requirements. These larger institutional investors may face portfolio construction pressures, fund lifecycle requirements, or shifts in investment thesis that drive secondary sales providing buying opportunities in the private markets.

We’ve once put together a direct SPV (~$1m) to buy a position from a multi billion dollar fund, however this is obviously rare as our block sizes are too small to transact with funds of this size. As stated, the exception is when we are doing $500k to $2m+ into a double layer SPV that is doing $10m or $50m or $100m to buy a much larger block of preferred shares here. 

Market Implications and Future Trends

For syndicators and secondary market participants, understanding the motivations and constraints of different seller types is crucial for successful deal sourcing and execution. 

The data suggests that the secondary market is becoming increasingly institutionalized, with SPV structures providing the infrastructure necessary to make illiquid private positions more accessible to a broader range of investors. As this market continues to mature, we can expect to see further innovation in structuring and syndication approaches that balance the needs of sellers seeking liquidity with buyers seeking exposure to private market growth.

The secondary market's evolution from a niche liquidity solution to a sophisticated financial infrastructure reflects the broader transformation of private markets. With companies staying private longer and traditional exit pathways becoming less predictable, secondary transactions facilitated through SPV syndications (and beyond) are likely to become an increasingly important component of private market investing strategies.

If you enjoyed this article, feel free to view our prior posts on adjacent topics 

• Why Syndicate Leads Don’t Survive 

• The Syndicate LP Churn Problem 

• What Really Drives Investment Interest in SPVs

Last Money in is Powered by Sydecar

Sydecar empowers syndicate leads to manage their investments more effectively. Organize, manage, and engage your investor network effortlessly with Sydecar’s management and communication tools. Their platform also automates banking, compliance, contracts, tax, and reporting, freeing up syndicate leads to focus on securing deals and strengthening investor relations. Elevate your syndicate operations with Sydecar.

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✍️ Written by Zachary and Alex