Understanding Pre-IPO Secondary Markets: Mechanics, Platforms, and Cerebras Liquidity
As high-growth technology companies delay public listings, growing their way to billion-dollar valuations in the private sector, investors face a shift in how wealth creation is distributed. Pitchbook data indicates that the median time for a venture-backed tech company to go public is around 11 years. In that time the initial wealth growth can be missed by investors.
Due to the demand for exposure in AI companies like Cerebras Systems, investor interest has grown long before these companies file to go public. This creates a need for over-the-counter equity trading prior to public listing. These types of transactions require an evaluation of platform specific structures. Below is an August 2026 assessment of five primary secondary platforms facilitating private share liquidity today.
1. Forge Global
Pricing/fee structure: Forge Global imposes fees of 2% to 5% for each side of a transaction, typically with a minimum investment of $100,000
Accredited investor requirements: To prove accreditation, buyers need to submit tax forms or a CPA statement to the SEC.
SPV structures vs direct share transfer: Forge Global allows share transfers on a direct cap table, along with grouped SPV structures so the issuer can manage cap table restrictions.
409A valuations and pricing benchmarks: Transactions are based on the company’s most recent 409A valuations: Forge Global has listed billions in secondary trade volume.
ROFR and company transfer approval process: When a trade is executed, a ROFR window will open for 30-300 days, after which the company can transfer the shares.
Lock-up periods and holding requirements: SEC Rule 144 applies restrictions to bought shares, plus IPOs typically include an 180-day lock-up per underwriter.
Use Cases: Used for institutional portfolio rebalancing, venture investor exits, and late-stage executive liquidity.
Pros of secondary marketplaces:
- Early entry into the investment at the private valuation stage.
Cons of secondary marketplaces:
- Illiquidity risk and ROFR cancellation by issuer boards.
Cerebras-specific context: Forge Global has tracked secondary Cerebras Systems activity, reflecting its venture funding rounds and AI chip market position.
Escrow and settlement process: Funds are placed in a neutral third party’s escrow account, settling between 30 to 90 days later.
Tax implications: Sellers face capital gains tax, however certain early-stage holdings may qualify for QSBS tax exclusions under section 1202 of the Internal Revenue Code.
2. Hiive
Pricing/fee structure: Hiive charges buyers a transaction fee in a standard range of 2% to 5% using the live bid, and ask structure. Investors can follow company updates on Hiive’s LinkedIn page.
Accredited investor requirements: Buyers must be accredited as per SEC Regulation D to participate, certifying that they have sufficient income ($200,000 or more) and net worth ($1 million or more, excluding property) prior to any bidding.
SPV structures vs direct share transfer: The platform uses predominantly direct share transfers between cap table entities but will assist if an SPV is used.
409A valuations and pricing benchmarks: Trades align with 409A valuations with Hiive hosting 3,000 plus companies on its live order book and billions of dollars in live orders.
ROFR and company transfer approval process: Trades are subjected to normal corporate ROFR process through legal departments working directly with the companies and transfer agents.
Lock-up periods and holding requirements: SEC Rule 144 imposes illiquidity in secondary markets, and post-IPO lock-ups typically last 90 to 180 days.
Use Cases: Monetizing employee stock, completing seed round or earlier investment exits, and allowing accredited buyers to invest in high-growth private tech companies.
Pros of secondary marketplaces:
- Access to price discovery and public bid/ask quotes of private market tech securities.
Cons of secondary marketplaces:
- Private market operational risks can create company ROFR blockages and other systemic issues.
Cerebras-specific context: Investors can gain investment insights for Cerebras via Hiive’s cerebras liquidity report.
Escrow and settlement process: All trades settle through a qualified escrow entity and then funds are released upon final issuer approval of the transfer of ownership and title.
Tax implications: Secondary sales incur capital gains tax, sellers must review holding periods and potential QSBS eligibility.
3. EquityZen
Pricing/fee structure: EquityZen charges a fee of 3% to 5% of the investment, with a typical minimum for deals being $10,000 or more.
Accredited investor requirements: Investors accredited status must be verified via financial statements, income tax returns, or letters from a third-party professional.
SPV structures vs direct share transfer: EquityZen uses managed SPVs almost exclusively, with accredited investors contributing funds in a group account.
409A valuations and pricing benchmarks: The 409A value dictates pricing for their secondary market platforms and they have closed 49,000+ secondary transactions for over 450 private companies.
ROFR and company transfer approval process: Corporate right of first refusal for each underlying sale needs to be resolved before the allocation of SPV entity interests is final.
Lock-up periods and holding requirements: Investors will maintain SPV membership interest until a liquidating event occurs and their SPV membership interests are still subject to 180 day post-IPO lock-ups.
Use Cases: This is useful for investors wanting to participate in fractional amounts, for liquidity out of existing investment funds, and for former employee share sale events.
Pros of secondary marketplaces:
- Minimum investment thresholds are accessible.
Cons of secondary marketplaces:
- Multi-tiered SPV service fees and continued administrative infrastructure required.
Cerebras-specific context: The SPV offering for hardware and AI companies such as Cerebras Systems are structured according to EquityZen’s valuation benchmarks.
Escrow and settlement process: Investors will deposit capital into a designated escrow account, where it will be released to the sellers after SPV equity transfer becomes board approved.
Tax implications: Shareholder reports (K-1) detailing the investor SPV’s investment results will be provided, and the capital gains tax realized as soon as shares have been sold.
4. Nasdaq Private Market
Pricing/fee structure: Nasdaq Private Market offers customized fee arrangements based on the specific program, like employee liquidity or secondary offerings initiated by the company.
Accredited investor requirements: Buyers are processed by strict, institutionally accepted accredited investors verification in line with FINRA and SEC regulations.
SPV structures vs direct share transfer: Nasdaq Private Markets handles direct share transfers, where shares are directly reflected on the issuer’s cape table.
409A valuations and pricing benchmarks: Programs are based on corporate 409A valuations and Nasdaq Private Market’s experience, having helped over 775 companies trade over $60 billion on their platform.
ROFR and company transfer approval process: These processes are pre-structured into the company-sponsored liquidity event, as such ROFR waivers and board approvals are integrated upfront.
Lock-up periods and holding requirements: Shares purchased are still subject to Rule 144, so they are not liquid in the way a public company share is, with an underwriter lockup usually in place.
Use Cases: Used for employee stock options and tenders, company-facilitated tender offers, and secondary liquidity offerings.
Pros of secondary marketplaces:
- Official corporate authorization reduces legal uncertainty.
Cons of secondary marketplaces:
- Trading access is restricted to corporate liquidity windows.
Cerebras-specific context: Nasdaq Private Market’s infrastructure enables privately held, late-stage companies like Cerebras to conduct employee secondary liquidity offerings.
Escrow and settlement process: Settlement occurs using an automated institutional clearing and escrow system that interfaces with the transfer agent.
Tax implications: If a seller sells via an employee stock option tender, capital gains tax or ordinary income tax may apply.
5. Caplight
Pricing/fee structure: The company charges a combination of subscription fees for its market analytics software and transaction fees for trades that are personalized for broker-dealers.
Accredited investor requirements: Access to trade is only granted to investors who have met and been confirmed as accredited investors or qualified purchasers after the completion of all regulatory clearance and confirmation requirements.
SPV structures vs direct share transfer: Caplight supports direct share transfers alongside synthetic SPV structures designed for institutional risk hedging.
409A valuations and pricing benchmarks: Caplight has more than $300 billion of proprietary secondary-market data covering more than 100,000 private companies and investors.
ROFR and company transfer approval process: Standard issuer right of first refusal process for direct deals and synthetics will have prices hedged with a contract.
Lock-up periods and holding requirements: Restrictions will be imposed on transactions by way of private contracts as well as SEC resale constraints and post-IPO lockups imposed by underwriters on the company.
Use Cases: Caplight is used by institutional funds that need an advanced tool for valuation tracking, pre-IPO hedging, and secondary market price discovery.
Pros of secondary marketplaces:
- Advanced institutional price tracking and risk management tools.
Cons of secondary marketplaces:
- Difficult to use because of product mechanics and requires an advanced financial understanding.
Cerebras-specific context: Caplight tracks the secondary pricing and valuation benchmark data for Cerebras Systems within the AI hardware industry.
Escrow and settlement process: A qualified escrow agent, linked to contractual stock clearing procedures or derivative clearing procedures, is used to settle transactions.
Tax implications: Transaction format will dictate tax implications, ranging from capital treatment on equity sale or derivative related tax treatment depending on the structure used.
Secondary Market Platforms Comparison
|
Platform |
Pricing/Fee Structure |
Key Feature |
Best For |
Limitation |
|
Forge Global |
2%-5% per side |
Institutional liquidity |
Large block trades |
High transaction minimums |
|
Hiive |
2%-5% buyer fee |
Live bid-ask order book |
Price transparency |
Accredited investors only |
|
EquityZen |
3%-5% platform fee |
Managed SPV investment pools |
Lower investment entry |
Ongoing SPV admin fees |
|
Nasdaq Private Market |
Custom corporate fees |
Company tender offers |
Employee liquidity |
Restricted off-program trades |
|
Caplight |
Subscription and trade fee |
Derivative and data analytics |
Price discovery hedging |
Complex product mechanics |
Frequently Asked Questions
What is the pre-IPO secondary market and how does it function?
The pre-IPO secondary market is where pre-IPO shareholders may privately sell equity at a desired price to accredited investors prior to a future IPO.
What types of investors are permitted to buy private shares from secondary marketplaces?
Only accredited investors who meet specified SEC requirements (e.g. individual income above $200,000 annually or an individually owned net worth above $1 million.
What is the effect of the right of first refusal (ROFR) on transactions?
Right of first refusal is a provision that allows the company or a specified designee to buy back shares of stock at the previously established selling price, as part of a transfer with an outside third party buyer.
Conclusion
The Problem: Delayed public listings lock up early wealth creation, restricting investor access and leaving employees without liquidity.
Key Takeaways: Secondary marketplaces provide crucial pre-IPO access, though platforms differ widely regarding fee structures, SPC versus direct transfers, and investment minimums.
Next Steps:
- Verify your SEC accredited investor status.
- Select a platform matching your capital limits.
- Review company-specific ROFR and lock-up restrictions.
