Secondary Transaction

A secondary transaction (or “secondary”) is any sale of ownership in a startup (typically common or preferred stock) where the seller is anyone other than the company itself.

For instance, an investor may purchase Series Seed stock and then resell it to another investor several years down the line prior to the company going public or getting acquired (known as an “exit”).

For a longer overview of secondaries, including regulatory and tax considerations, check out our Secondaries Guide.