The landscape of private capital markets has undergone a profound transformation, driven by startups choosing to remain private for extended periods. This trend has not only fueled the growth of venture capital but has also ignited a vibrant, and often intense, secondary market for shares in these pre-IPO companies. Navigating this complex and rapidly evolving environment requires deep insight, a quality embodied by firms like EquityZen, which has been at the forefront of this market since its inception.

Founded in 2013, New York-based EquityZen established itself as a crucial marketplace, providing liquidity for employees and early shareholders of privately held companies. Its platform enables these individuals to sell their stock before a public offering or acquisition, addressing a critical need in an ecosystem where traditional exit paths have lengthened. The significance of EquityZen’s role was underscored in October 2025, when financial giant Morgan Stanley announced its intent to acquire the company, a deal successfully completed in January 2026. This acquisition brought EquityZen under the expansive umbrella of one of the world’s leading investment banks, signaling a major institutional validation of the secondary market’s growing importance.

At the heart of EquityZen’s journey and the secondary market’s evolution is Phil Haslett, a co-founder and the company’s chief strategy officer. Haslett has witnessed firsthand the market’s maturation, its shifts, and its current bifurcated state. Crunchbase News recently sat down with Haslett to delve into the intricacies of this dynamic market, exploring what secondary-market pricing reveals about today’s most coveted startups, the stark contrast between the premiums commanded by AI companies and the discounts faced by many older ventures, the realities of the IPO market beyond its marquee names, and the renewed investor focus on hard tech.

The conversation, edited for length and clarity, offered a granular view of the forces shaping private investments.

Crunchbase News: The second quarter saw one of the strongest venture-backed IPO quarters since 2021, yet much of that activity was driven by SpaceX. If we exclude SpaceX, how truly open is the IPO market for the typical late-stage startup?

Phil Haslett: Generally, I’d characterize the IPO market as significantly better than it was three or six months ago. The psychological hurdle of a behemoth like SpaceX dominating the news cycle is now behind us. Many private late-stage technology companies likely adopted a wait-and-see approach, and with SpaceX’s successful debut, that major event is now cleared.

Furthermore, the broader tech markets are demonstrating robust health. The stock market is trading at or near all-time highs, and we’ve observed a strong recovery across tech stocks in general. This positive macroeconomic backdrop naturally fosters optimism for a more active IPO season. I anticipate a busier summer than usual for public listings.

However, it’s crucial to look beyond just the volume of IPOs and consider their post-listing performance. While initial enthusiasm might be high, some companies have experienced a subsequent slowdown. Cerebras, for example, saw an initial surge but has since come down a bit. This mixed performance might lead companies to view the current window as opportune for going public, even if the post-IPO trajectory has been, in a word, "meh."

Interestingly, within the AI sector, the narrative is different. We’re seeing opportunities emerge across the entire production curve – from the fundamental energy infrastructure required for data centers, to the cutting-edge technology powering those centers, to the sophisticated orchestration of compute resources, and efficient spending on training and inference models. There’s a vast spectrum of fascinating companies along this value chain, and I believe this bodes exceptionally well for AI-focused businesses considering an IPO. The depth and breadth of innovation in AI suggest a sustained appetite for public offerings in this domain.

A few companies, notably Figure AI, Project Prometheus, Redwood Materials, and Scale AI, recently entered EquityZen’s Top 20 most popular private companies. Does this signify a durable shift away from traditional software, or are investors simply chasing a limited number of high-profile hard-tech companies due to scarcity?

Haslett: I firmly believe this reflects a fundamental thematic shift in investor interest, rather than merely chasing scarce supply. The companies making inroads into our Top 20 list generally fall into categories like AI infrastructure, space tech, and robotics. These aren’t just buzzwords; these are sectors we anticipate will offer generational growth opportunities.

Consider SpaceX: its incredible success not only validates the space industry but also prompts investors to explore broader opportunities within space tech and, by extension, defense tech. Similarly, the immense potential of AI infrastructure is undeniable. If the market for AI is as vast as projections suggest, and we’ve already seen early AI companies successfully go public over the past year, it’s only logical that investors would seek out other promising ventures in this space. This goes beyond simple scarcity; it’s about identifying the next wave of industry leaders in areas poised for explosive, long-term growth.

These hard-tech businesses, by their nature, tend to be more capital intensive and often require a longer runway to achieve predictable revenue streams compared to traditional SaaS companies. This raises a critical question: How are secondary investors underwriting them?

Haslett: The underwriting calculus for these capital-intensive companies involves a careful assessment of the overall market opportunity. If a company requires substantial capital, investors must determine if the potential rewards are significant enough to justify a longer investment horizon and the need for subsequent funding rounds. Building a factory, securing complex regulatory approvals, or developing entirely new hardware can significantly delay a company’s ability to increase its valuation or achieve an exit. Secondary investors, much like primary venture and growth investors, discount this extended timeline and inherent risk into the prices they are willing to pay. Consequently, much of this consideration is already "baked into" the headline valuations from primary funding rounds.

What has fundamentally changed in recent years is the expanded range of financing options available to these capital-intensive companies. Five or six years ago, a battery manufacturer or a new chip producer might have had little alternative but to rely solely on equity financing. However, by 2026, there’s a much more robust ecosystem of credit and asset-based financing options. This evolution is critical because it alters the risk profile for equity investors. In a scenario where one of these companies underperforms or requires a distressed asset sale, creditors and lenders typically have priority repayment. Secondary investors must meticulously factor this seniority into their valuation models, understanding that their position in the capital stack carries different risks than it might have in a pure-equity financing environment.

EquityZen’s data indicates that the average transaction occurred at a 38% discount to the last primary funding round, yet many AI transactions traded at premiums. What does this tell us about how bifurcated the private market has become?

Haslett: I wouldn’t necessarily label it as a "mispricing"; rather, it reflects the emergence of essentially two distinct vintages of private companies currently operating in the market.

On one side, you have companies that weren’t fundamentally "built AI-first." Many of these raised significant capital during the "go-go years" of 2021, often at very high valuations, and may not have raised new rounds since. These companies have been forced to undergo a strategic rethinking, adapting their existing business models to integrate AI. This adaptation process can inherently slow growth and execution, which naturally gets reflected in the discounts we observe in secondary transactions. Their past valuations are now being recalibrated against current market realities and future growth prospects in an AI-dominated world.

Then, there’s a fresh wave of companies, primarily founded from 2023 onwards, that were conceived with an "AI-first" mentality. They started from a clean slate, often operate with greater efficiency, and present a much clearer, more compelling growth narrative to the market. Some of these companies are securing successive funding rounds at rapidly increasing valuations. Secondary investors are often willing to pay a premium for shares in these ventures because they perceive a clear and accelerated trajectory for the company, believing that the next valuation increase or major milestone could occur very quickly.

Airtable serves as a salient example from the 2021 cohort. It raised at a valuation north of $10 billion and recently sold for substantially less. While it remains a good business, investors are now comparing its roughly 20% growth rate with newer companies that are scaling from zero to hundreds of millions in revenue in just a few short years. This stark contrast understandably shifts investor appetite. We anticipate seeing more companies from that 2021 era eventually selling for less than the valuations they commanded during those peak fundraising periods.

Over the past few years, many private companies have conducted secondaries because they weren’t ready for an IPO. When should founders consider establishing a company-approved secondary program?

Haslett: Historically, companies typically began contemplating liquidity programs after five, six, or seven years of operation. The primary drivers were usually to reward long-serving employees for their patience and to provide some much-needed liquidity for early investors who had been locked in for an extended period.

However, we’re now observing a significant shift: much younger companies are engaging in controlled liquidity events and tender offers. This change is driven by several factors.

One major reason is talent retention. The competition for highly skilled engineers, data scientists, and AI specialists is incredibly fierce. In this environment, offering secondary liquidity has become a normalized and expected component of a competitive compensation package. It allows companies to attract and retain top talent by providing a tangible path to realizing the value of their equity, without waiting for an uncertain IPO.

Furthermore, there are now more sophisticated solutions and platforms available than ever before to facilitate these programs. Morgan Stanley, for instance, has significantly expanded its tender offer activity, reflecting both growing investor interest and the availability of more robust tools and expertise to execute these complex transactions efficiently.

There’s also a noticeable increase in investor appetite for private-company shares via tender offers and secondary transactions. Five years ago, this was a far less common approach for institutional investors. Today, a wider range of investors are actively seeking opportunities to gain ownership in promising private companies through these mechanisms.

Currently, it’s a very founder- and employee-friendly environment, and investors are generally willing to support secondary liquidity because it grants them access to highly sought-after companies. However, it’s important to remember that markets are cyclical. Should market conditions tighten or investor sentiment shift, that pendulum could swing back, making such programs less common or harder to execute.

For investors considering private-company shares, what does a secondary-market price tell them compared with the valuation at the company’s last fundraise?

Haslett: I believe a secondary-market price offers investors the "true price" of a company’s shares in the present moment.

A primary valuation, typically set during a new funding round, is essentially a point-in-time measure of what a specific group of investors were willing to pay. Crucially, these primary investors almost invariably receive preferred stock, which comes with additional rights, protections, and liquidation preferences that common shareholders do not possess. This preferred status means the headline valuation often doesn’t directly translate to the value of common stock held by employees or early investors.

The secondary market, in contrast, is far more telling. It reflects what you could actually monetize and put in your pocket right now for your common shares. For companies that actively embrace and facilitate secondary liquidity, these prices provide a much clearer and more realistic understanding for employees, former employees, and early investors of what their shares are genuinely worth in the open market, free from the complexities and preferences tied to primary preferred rounds. It’s a more democratic and immediate reflection of market sentiment and liquidity.

How does EquityZen calculate popularity and distinguish durable investor demand from mere curiosity or hype?

Haslett: Our platform offers a unique mechanism for gauging genuine investor interest, particularly from our base of retail accredited investors. They can actively browse a wide array of private companies, review our in-depth analysis and research, and, crucially, indicate their specific interest. This isn’t just passive viewing; they can signal which companies they would genuinely consider investing in if shares became available, and importantly, at what approximate size or allocation they would commit capital.

This direct input provides us with a real-time, quantitative metric of what our user base truly wants to invest in and the scale of that demand. It’s a powerful tool that helps us strategically guide where we allocate our efforts in bringing new opportunities to our clients. The last thing we want, or any marketplace wants, is to engage with a shareholder looking to sell shares when we can’t find a buyer, or conversely, to have eager buyers when we can’t source any shares for sale. This popularity metric acts as an invaluable compass, ensuring we efficiently match supply with demand and focus on opportunities with proven, durable investor interest, filtering out fleeting curiosity.

What does the recent consolidation in the secondary market tell you about how the market is evolving?

Haslett: The period toward the end of 2025 saw significant attention on consolidation within the secondary-market space, most notably with Forge being acquired by Charles Schwab, and EquityZen by Morgan Stanley.

To me, this consolidation sends a very clear and powerful message about the market’s trajectory: it signifies robust market growth, increasing mainstream adoption of secondary liquidity as a financial tool, and, most importantly, the fact that the largest and most established financial institutions are now paying serious attention to this sector. These are not minor players making speculative bets; these are major banks integrating secondary market capabilities into their core offerings. I don’t foresee this trend of institutional interest and integration changing anytime soon; if anything, it will likely accelerate as the private markets continue to mature and expand.

Your data showed that some software companies began trading at premiums again in the second quarter. What separates those gaining investor confidence from those still trading at deep discounts?

Haslett: It all boils down to two critical factors: leadership and execution.

The key differentiator for software companies right now is their ability to successfully pivot and adapt. Can a legacy SaaS business effectively transform itself into an "AI-enabled" enterprise across its entire operations? This isn’t just about adding a new feature; it’s about strategically integrating AI tools to enhance internal tasks, streamline processes, and fundamentally build AI capabilities directly into their product offerings for clients.

Companies that possess both the inherent stickiness and customer loyalty they’ve meticulously built over years, combined with the domain expertise relevant to their sector, and critically, the agility to integrate AI, are poised for continued success. They leverage their existing strengths while embracing the future. Conversely, those that are slower to adopt AI, or are perhaps too entrenched in their existing models and too proud to react swiftly, are the ones that will face significant headwinds and ultimately get "pummeled" in the market.

Six months ago, there was a palpable concern that when a company like Anthropic announced a new cybersecurity or legal AI tool, established companies in those specific sectors would immediately see a sharp decline in value. I believe some of that initial fear was a knee-jerk reaction.

Existing customers, especially large enterprises, often exhibit a degree of patience with their current software providers. However, this patience is not infinite; they expect continuous product improvement and compelling reasons not to switch. Companies that fail to keep their products working exceptionally well and are slow to adapt to new technological paradigms will be the hardest hit. Examples like SAP, Oracle, and Salesforce illustrate this point perfectly. Their software is deeply ingrained within large enterprises, forming the backbone of their operations. If these companies can continue to deliver high-quality products and relentlessly adapt them to incorporate the latest advancements, particularly in AI, they still have a strong shot at remaining successful standalone businesses. Ultimately, their fate hinges entirely on the quality and decisiveness of their management’s execution.

The private market, as illuminated by Phil Haslett, is a vibrant mosaic of rapid innovation, strategic adaptation, and evolving investor sentiment. AI is no longer a niche but a pervasive force, reshaping valuations and redefining what makes a company attractive. While the secondary market offers crucial liquidity and a "true price" discovery mechanism, the ultimate success of private companies, whether hard tech or SaaS, rests on visionary leadership and flawless execution in an increasingly AI-driven world.

Illustration: Dom Guzman

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