Secondary

Selling existing shares, not issuing new ones

What it is

A secondary is the sale of EXISTING shares from one investor or employee to another buyer, rather than the company issuing new shares to raise money (that is a "primary"). The cash goes to the seller, not into the company. It is how early shareholders get liquidity before an IPO or acquisition.

Why it matters

Secondaries let founders and early employees take some money off the table during long pre-exit periods, and let new investors buy in. They do not raise capital for the company, which is the key distinction.

Resources

Investopedia, Secondary Market

investopedia.com

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