The private market for venture-backed companies, where startups often remain private for extended periods, has become a hotbed of activity, driving an increasingly dynamic and competitive secondary market for buying and selling shares before public listings. This intensified interest stems from a confluence of factors: companies delaying IPOs, a growing need for liquidity among employees and early investors, and institutional investors seeking access to high-growth private assets. EquityZen, a pioneer in this space, has been at the forefront since its inception in 2013, establishing itself as a crucial marketplace for shares of privately held companies. Based in New York, the company provides a vital avenue for employees, founders, and other shareholders to realize returns on their stock before a company reaches a liquidity event like an initial public offering (IPO) or an acquisition. This service addresses a critical pain point for individuals holding illiquid private shares, offering them a pathway to financial flexibility.

The significance of EquityZen’s role in the evolving financial landscape was underscored by its acquisition by global financial giant Morgan Stanley. The investment bank announced its intent to acquire EquityZen in October 2025, with the deal successfully closing in January 2026. This strategic move brought EquityZen under the formidable umbrella of one of the world’s leading financial institutions, signaling a broader institutional recognition of the maturity and importance of the private secondary market. For Morgan Stanley, the acquisition likely represented an expansion of its wealth management and capital markets capabilities, providing its clients with enhanced access to private market opportunities and leveraging EquityZen’s established technology and expertise.

Phil Haslett, co-founder and Chief Strategy Officer of EquityZen, has been a key architect and observer of the secondary market’s dramatic transformation. His unique vantage point offers invaluable insights into the intricate dynamics of private company valuations, investor sentiment, and emerging technological trends. Crunchbase News recently sat down with Haslett to delve into what secondary-market pricing reveals about today’s most coveted startups, the stark contrast in valuations between burgeoning AI companies and more established, older startups, the true state of the IPO market beyond its headline-grabbing names, and the burgeoning investor interest in hard tech. The following conversation, edited for length and clarity, provides a deep dive into the forces shaping the private investment landscape.

Crunchbase News: The second quarter was marked by a significant resurgence in venture-backed IPO activity, presenting one of the strongest periods since 2021. However, much of this impressive performance was heavily skewed by the blockbuster listing of SpaceX. If we strip away the extraordinary influence of SpaceX, how genuinely open and accessible is the IPO market for the typical late-stage startup today?

Phil Haslett: Generally speaking, the IPO environment is considerably more favorable now than it was just three or six months ago. Many private late-stage technology companies were likely biding their time, waiting for a major event like the SpaceX IPO to clear the market, and that significant hurdle has now been overcome. Beyond that, the broader tech markets are showing robust health. The stock market is consistently reaching all-time highs, and we’ve witnessed a strong and sustained recovery in tech stocks across the board. This positive sentiment, coupled with decreasing inflation and more stable interest rate expectations, creates a more conducive environment for public offerings. My assumption is that we are gearing up for a busier summer IPO season than typically observed.

However, it’s crucial to consider the post-IPO performance of companies other than SpaceX. While initial enthusiasm can be high, we’ve seen several recent listings experience a slowdown shortly after their debut. Cerebras, for example, saw its stock price moderate after its initial pop. This trend suggests that while the window for going public might be opening, companies and their investors need to temper expectations regarding sustained post-IPO growth and be prepared for intense market scrutiny. The message is clear: getting public is one thing, but maintaining investor confidence and demonstrating consistent performance is another challenge entirely, often leading to a "meh" outcome for many.

Nevertheless, within the AI sector, the narrative is distinctly different. We’re observing significant opportunities emerging across the entire AI production curve. This spans from the fundamental energy infrastructure required for vast data centers, to the sophisticated chip technology powering AI computations, to the orchestration of complex compute resources, and finally, to efficient spending on training and inference models. This comprehensive spectrum of innovation means there are numerous intriguing companies poised for growth. This robust ecosystem bodes exceptionally well for AI-focused companies contemplating a public offering, as investors are eager to capitalize on this generational technological shift.

Crunchbase News: We’ve observed a notable shift in your Top 20 list, with several companies like Figure AI, Project Prometheus, Redwood Materials, and Scale AI making strong entries. Does this trend signal a durable, long-term shift away from the traditional dominance of software companies, or are investors primarily chasing a limited pool of scarce, high-profile hard-tech companies that are currently generating significant buzz?

Haslett: I believe this trend genuinely reflects a significant and durable thematic shift in investor focus. The companies that are consistently making their way onto that list typically fall into rapidly expanding categories such as AI infrastructure, advanced space technology, and cutting-edge robotics. These aren’t just fleeting interests; they represent sectors that are widely anticipated to drive generational growth opportunities, fundamentally reshaping industries and economies over the coming decades.

If we acknowledge that these industries are indeed poised for such monumental growth, the logical conclusion is that each sector will inevitably produce multiple market leaders and significant winners. SpaceX, with its groundbreaking achievements, has served as a powerful catalyst, inspiring investors to explore the broader opportunities within space tech, and by extension, adjacent fields like defense tech, which are experiencing renewed strategic importance.

The same principle applies emphatically to AI infrastructure. Given the projected enormous size of the AI market, and having witnessed several companies in this domain successfully go public over the past year or so, it stands to reason that sophisticated investors will be intensely interested in other promising companies within this space. This goes beyond merely chasing scarce supply; it’s about identifying and investing in the foundational technologies and critical components that will underpin the entire AI revolution. These shifts are driven by a fundamental belief in the long-term value creation potential of these industries, rather than just short-term hype.

Crunchbase News: These businesses, particularly those in hard tech and AI infrastructure, tend to be significantly more capital-intensive and often require longer development cycles to achieve predictable revenue streams compared to traditional SaaS companies. How are secondary investors approaching the underwriting of these complex and capital-heavy ventures?

Haslett: When a company in these sectors requires substantial upfront capital for R&D, manufacturing, or regulatory approval, investors must carefully weigh whether the overall market opportunity is expansive enough to justify a longer investment horizon and the potential for the company to raise additional capital rounds down the line. Factors such as the need to construct a factory, secure extensive regulatory approvals, or conduct prolonged R&D can significantly delay a company’s ability to increase its valuation or achieve an exit event. Secondary investors meticulously discount these inherent delays and capital requirements into the price they are willing to pay for shares.

Ultimately, secondary investors are performing a similar calculus to their counterparts in primary venture and growth equity rounds. Therefore, it’s reasonable to assume that much of this risk and capital intensity is already factored into the headline valuations derived from primary funding rounds. However, a notable change has occurred: capital-intensive companies now benefit from a much wider array of financing options. Five or six years ago, a nascent battery company or a new chip manufacturer might have had little alternative but to exclusively raise equity. In 2026, the landscape is far more diverse, with an increasing availability of credit and asset-based financing options. This evolution in financing is critical because it alters the risk profile for equity investors. If one of these companies underperforms or requires a distressed asset sale, creditors and lenders are typically paid first. Secondary investors must diligently factor this hierarchy into their investment decisions, understanding their position in the capital stack.

Crunchbase News: EquityZen’s data indicates a significant bifurcation in the private market, with the average transaction occurring at a 38% discount to the last funding round, while many AI transactions are simultaneously trading at notable premiums. What does this dramatic disparity reveal about the current state and underlying health of the private market?

Haslett: I wouldn’t necessarily characterize it as a mispricing, but rather a reflection of the existence of two distinct "vintages" of private companies coexisting in the market right now, each facing very different realities. On one hand, you have a cohort of companies that were not initially built with an "AI-first" mentality and have had to undertake significant efforts to adapt their products and strategies. Many of these firms raised capital during the exuberant "go-go years" of 2021, often at extremely high valuations, and may not have secured subsequent funding rounds since. They’ve been compelled to fundamentally rethink their business models and technological roadmaps, which can inherently slow down growth and execution. This strategic recalibration, combined with potentially inflated past valuations, is clearly reflected in the substantial discounts observed in secondary transactions for these companies.

Conversely, there’s a vibrant new wave of companies, primarily emerging from 2023 onwards, that were conceived and built from the ground up with an "AI-first" ethos. These startups benefit from starting with a clean slate, often operating with greater efficiency, and presenting a much clearer and more compelling growth narrative to the market. Many of these companies are not only raising successive funding rounds in quick succession but are also doing so at ever-increasing valuations. Secondary investors are often willing to pay a premium for shares in these firms precisely because they perceive a clear, accelerated trajectory and anticipate rapid valuation increases in the near future.

Airtable serves as a salient example from the 2021 cohort. It famously raised at a valuation exceeding $10 billion, only to subsequently sell for substantially less. While it remains a fundamentally good business, investors are now making direct comparisons. When faced with a company demonstrating 20% year-over-year growth versus a newer AI company going from zero to hundreds of millions in revenue within just a few years, it’s easy to understand why investor appetite shifts dramatically. This trend suggests we are likely to see more companies from that 2021 era eventually selling for valuations below their peak primary funding rounds.

Crunchbase News: Over the past few years, a growing number of private companies have conducted secondary transactions, often because they weren’t quite ready for a public listing but needed to offer liquidity. From a founder’s perspective, when is the optimal time to consider establishing a formal, company-approved secondary program?

Haslett: Historically, companies typically began contemplating formal liquidity programs after they had been in operation for five, six, or even seven years. These programs were primarily designed to reward long-serving employees for their patience and to provide some much-needed liquidity to early investors who had committed capital years prior. However, we’re now observing a significant acceleration of this trend. Increasingly, much younger companies are engaging in controlled liquidity events and tender offers, sometimes within just a few years of their founding.

Several compelling reasons underpin this shift. Foremost among them is talent retention. The competition for highly skilled engineers, data scientists, and AI specialists is incredibly fierce. In this tight labor market, secondary liquidity has evolved from a nice-to-have perk to an increasingly normalized and expected component of a competitive compensation package. Companies are using these programs as a powerful tool to attract and retain top talent. Furthermore, the ecosystem for facilitating these transactions has matured considerably. More sophisticated solutions are available than ever before; for instance, Morgan Stanley, since its acquisition of EquityZen, has significantly expanded its tender-offer activity, reflecting both heightened investor interest and the proliferation of robust tools and platforms.

There’s also a palpable increase in investor appetite for these opportunities. Investors are demonstrating a greater willingness to gain ownership stakes in private companies through tender offers or other secondary transactions. Five years ago, such direct participation was far less common among a broad base of institutional and accredited investors. Right now, the environment is exceptionally founder- and employee-friendly, with investors generally supportive of secondary liquidity programs because they recognize the strategic importance of gaining access to these high-growth private assets. However, it’s worth noting that if market conditions were to turn significantly, that pendulum of investor willingness could very well shift back.

Crunchbase News: For investors contemplating an allocation to private-company shares, what distinct insights does a secondary-market price offer them, especially when compared with the often-publicized valuation derived from the company’s most recent primary fundraise?

Haslett: I believe the secondary market price provides the most accurate and "true" price for common stock. A primary valuation, while a crucial benchmark, is essentially a point-in-time measure of what a specific group of investors, typically venture capital firms, were willing to pay for preferred stock. These preferred shares almost always come with a host of additional rights and liquidation preferences that common shareholders do not possess. These preferences—such as the right to receive their investment back before common shareholders in an exit event, or participation rights in future funding rounds—can significantly impact the effective value of the investment, making the headline primary valuation not directly comparable to the value of common stock.

The secondary market, in contrast, often deals in common shares or preferred shares stripped of some of their most advantageous rights, reflecting what you could actually get in your pocket now if you were to sell. For companies that actively embrace and facilitate secondary liquidity, these prices offer a much clearer and more realistic understanding of what the shares held by employees, former employees, and early investors are genuinely worth. It provides a real-time, market-driven valuation that factors in current market sentiment, liquidity discounts, and the absence of preferred rights, making it a more transparent indicator of actual realizable value for non-preferred shareholders.

Crunchbase News: How does EquityZen go about calculating "popularity" among its investor base, and what mechanisms are in place to distinguish durable, genuine investor demand from mere curiosity or speculative hype?

Haslett: Our platform is specifically designed to capture and quantify genuine investor intent. We cater primarily to retail accredited investors, providing them with a robust environment to explore various private companies. They can browse detailed company profiles, review our proprietary analysis and insights, and, crucially, indicate their specific interest in investing. This isn’t just about clicking a "like" button; investors can actively specify which companies they would commit capital to, if shares became available, and at what precise investment size. This commitment to a specific dollar amount is a key differentiator.

This process gives us an incredibly valuable, real-time metric of what our active user base truly wants to invest in and, importantly, the aggregate amount of capital they are willing to deploy. This data is far more robust than simple expressions of interest; it reflects actionable demand. It then serves as a critical guide for our internal teams, helping us strategically allocate our resources and focus our efforts on bringing specific opportunities to our clients. The last thing we want, or any marketplace wants, is to engage with a shareholder looking to sell when we can’t readily find a buyer, or conversely, to attract buyers when we lack available shares for sale. This granular, quantified demand helps us efficiently match supply and demand, reducing friction and increasing the likelihood of successful transactions.

Crunchbase News: The recent wave of consolidation within the secondary market, with major players being acquired by financial giants, is quite telling. What does this trend indicate about the broader evolution and future trajectory of this market?

Haslett: The significant attention garnered by consolidation in the secondary market towards the end of 2025, specifically with Forge being acquired by Charles Schwab and EquityZen joining Morgan Stanley, is profoundly indicative. To me, this trend unequivocally reflects the market’s substantial growth, the increasing mainstream adoption of secondary liquidity as a legitimate financial tool, and the undeniable fact that the world’s largest and most established financial institutions are not just paying attention, but are actively investing in this space.

These acquisitions are not merely opportunistic; they signal a strategic imperative for major financial players to integrate private market access into their broader offerings. It suggests that these institutions recognize the long-term potential of private markets as a significant asset class and are positioning themselves to capitalize on its continued expansion. I anticipate that this trend of institutional involvement, increased capital flow, and greater sophistication in product offerings will only continue to accelerate. The secondary market is no longer a niche; it’s becoming an integral component of the global financial ecosystem.

Crunchbase News: Your data also highlighted that some software companies, after a period of discounts, began trading at premiums again in the second quarter. What are the distinguishing factors that separate these companies, which are successfully gaining renewed investor confidence, from those still languishing and trading at deep discounts?

Haslett: It all boils down to one critical factor: execution. Specifically, strong leadership coupled with exceptional execution. The differentiating element for these resurgent software companies is their demonstrated ability to adeptly take a legacy SaaS business model and fundamentally transform it into something truly AI-enabled across every facet of its operations. This isn’t just about slapping "AI" onto a marketing slide; it’s about deeply embedding AI tools to significantly improve internal tasks, enhance operational efficiency, and critically, building AI directly into the product offering for their clients.

Companies that can successfully fuse the inherent stickiness and hard-earned customer loyalty they’ve already cultivated over years, with their deep domain expertise and a rapid, effective adoption of AI capabilities, are the ones that are not only surviving but thriving. They are strategically leveraging AI to create new value, improve existing features, and maintain a competitive edge. Conversely, the ones that are slower to adapt, or perhaps too proud or entrenched to react decisively, are inevitably going to get pummeled in this new environment.

Six months ago, there was a palpable concern, almost a knee-jerk reaction, that when a company like Anthropic announced a new cybersecurity or legal AI tool, established companies in those sectors would immediately lose significant value. I believe much of that initial fear was an overreaction. Customers who are deeply integrated into your existing software ecosystem typically possess a certain degree of patience. However, that patience comes with an expectation: they demand continuous product improvement and compelling reasons not to switch to a newer, potentially AI-native solution. The companies that are sluggish to react, or exhibit complacency, are precisely the ones I believe will be hit hardest by this technological paradigm shift.

Take giants like SAP, Oracle, and Salesforce, for instance. Their software is profoundly ingrained in the operational fabric of large enterprises globally. If these companies can maintain the high performance of their core products while continuously adapting and integrating cutting-edge AI capabilities, they absolutely have a strong shot at remaining successful standalone businesses. Ultimately, in this rapidly evolving landscape, sustained success hinges squarely on the quality of management and their unwavering commitment to strategic execution.

The dynamic interplay between technological innovation, market demand, and strategic adaptation continues to shape the private market. As AI reshapes industries, and companies navigate evolving liquidity needs, the secondary market will remain a crucial barometer of true value and investor sentiment.