As venture-backed technology startups continue to delay their public market debuts, choosing instead to remain private for unprecedented lengths of time, the ecosystem for buying and selling their shares has undergone a seismic transformation. Once considered a niche, alternative asset class operating in the shadows of traditional Wall Street, the private secondary market has ballooned into an intensely active, highly competitive financial battleground.
At the center of this evolution is EquityZen, a pioneer that has been facilitating the trading of private company shares since 2013. By operating a marketplace that connects founders, employees, and early-stage shareholders with accredited buyers, the New York-based platform has long provided a vital bridge for those seeking liquidity before a traditional IPO or corporate acquisition.
That pioneering role recently culminated in a major milestone. Following an acquisition announcement in October 2025, Morgan Stanley officially finalized its buyout of EquityZen in January 2026, fully integrating the alternative trading platform into its sprawling investment banking umbrella.
To unpack what secondary market pricing, corporate consolidation, and shifting investor appetites reveal about the health of the tech ecosystem, Crunchbase News sat down with Phil Haslett, co-founder and chief strategy officer of EquityZen. From the soaring valuations of artificial intelligence (AI) startups to the lingering valuation hangover of the 2021 SaaS boom, Haslett offers an authoritative, front-row perspective on how private markets are navigating an era of profound structural change.
Executive Overview: A New Era of Private-Market Dynamics
The broader technology landscape is experiencing a fragile yet resilient rebirth. Following a prolonged drought in public offerings, the second quarter marked one of the strongest periods for venture-backed initial public offerings since the market peak in 2021. However, beneath the headline-grabbing numbers lies a nuanced reality: much of this liquidity was catalyzed by a single corporate heavyweight, SpaceX.
When elite market-moving behemoths are stripped away, the IPO path for the typical late-stage startup remains complex, prompting private companies to seek alternative avenues for valuation and talent retention. Chief among these solutions is secondary liquidity—structured programs that allow employees and early backers to cash out portions of their equity without forcing a premature public debut.
However, the secondary market is far from monolithic. Data from EquityZen highlights a stark bifurcation: while newer, "AI-first" infrastructure and hard-tech enterprises command heavy valuation premiums, many legacy software-as-a-service (SaaS) firms from the 2021 vintage are trading at steep discounts—sometimes dropping as much as 38% relative to their last primary funding rounds.
As major financial institutions like Morgan Stanley and Charles Schwab—which acquired Forge Global—sweep in to consolidate secondary infrastructure, understanding these market dynamics is more critical than ever for founders, institutional investors, and retail stakeholders alike.
Detailed Chronology: The Journey to Institutional Integration
To fully understand the current state of private secondary markets, one must trace the timeline of how alternative liquidity evolved from an operational afterthought into an institutional necessity.
2013–2020: The Genesis of Alternative Liquidity
When EquityZen launched in 2013, secondary transactions were largely ad-hoc, opaque, and heavily scrutinized by corporate legal teams. Startups viewed secondary sales with suspicion, fearing they signaled a lack of internal confidence or distracted employees from core execution. Over the latter half of the decade, however, as companies like Uber, Airbnb, and Palantir stayed private for well over a decade, the necessity for employee wealth realization became undeniable.
2021–2023: The Go-Go Era and Subsequent Correction
The pandemic-era tech boom of 2021 saw a historic volume of primary capital injections, pushing valuations to astronomical, often unsustainable heights. When macroeconomic conditions shifted in 2022 with rising interest rates and inflation, the IPO window slammed shut. Private companies found themselves stranded with elevated valuations they could no longer justify, creating a massive backlog of unfulfilled liquidity demand for employees sitting on paper wealth.
October 2025 – January 2026: The Wall Street Consolidation Wave
The maturation of the secondary market reached an institutional inflection point toward the end of 2025. Major wirehouses and banking giants moved aggressively to capture alternative asset flow. In quick succession, Charles Schwab targeted Forge Global, while Morgan Stanley announced its intent to acquire EquityZen in October 2025, completing the transaction in January 2026. This consolidation cemented secondary trading as a permanent, mainstream pillar of modern equity capital markets.
Supporting Context and Market Metrics: The Great Bifurcation
The modern secondary market tells a story of two entirely different corporate vintages. On one side are legacy firms grappling with the valuation realities of 2021; on the other are agile, next-generation enterprises riding the structural tailwinds of artificial intelligence and deep tech.
Understanding the 38% Discount
According to EquityZen data, the average transaction on its platform occurred at a striking 38% discount to the company’s preceding primary funding round. According to Phil Haslett, this gap should not necessarily be misconstrued as a mispricing, but rather as an reflection of macroeconomic sorting.
Companies that raised capital during the exuberant markets of 2021—without being built "AI-first"—have had to dramatically pivot their business models. Many of these firms experienced slowed growth trajectories and painful adjustments, which secondary investors quickly factor into their underwriting. A prime example is Airtable, which raised capital at a valuation exceeding $10 billion during the peak years, only to later complete transactions at substantially adjusted marks.
The AI Premium and Hard-Tech Momentum
Conversely, startups founded from 2023 onward with an innate AI-first architecture are defying broader market trends. These businesses often command robust premiums on secondary markets. Investors are willing to pay up because these firms exhibit hyper-growth, often scaling from zero to hundreds of millions in revenue in record time, making the timeline to a potential valuation markup significantly shorter.
Furthermore, companies entering EquityZen’s Top 20 ranking—such as Figure AI, Project Prometheus, Redwood Materials, and Scale AI—demonstrate a durable thematic shift toward AI infrastructure, robotics, and space technology. Unlike lightweight B2B SaaS firms, these hard-tech enterprises are inherently capital-intensive, requiring heavy investments in physical infrastructure, factories, and long regulatory approval runways.
Official Insights: A Conversation with Phil Haslett
To extract deeper meaning from these market shifts, Crunchbase News spoke directly with EquityZen co-founder and Chief Strategy Officer Phil Haslett. Below are key excerpts from their discussion regarding market health, underwriting calculus, and corporate execution.
Crunchbase News: The second quarter was one of the strongest venture-backed IPO quarters since 2021, but SpaceX drove much of that activity. If you remove SpaceX, how open is the IPO market for the typical late-stage startup?
Phil Haslett: "Generally, I’d say it’s better than it was three or six months ago. If you were a private late-stage technology company, you probably were going to wait until after SpaceX anyway, so that hurdle is gone. Tech markets are also doing well. The stock market is at an all-time high, and there’s been a strong recovery in tech stocks overall. I assume that we’re gearing up for a busier summer than usual… Within AI, I think we’ve seen that there’s opportunity up and down the production curve—from energy for data centers, to the technology inside them, to orchestration of compute, to efficient spending on training and inference."
Crunchbase News: EquityZen says the average transaction occurred at a 38% discount to the last funding round, while many AI transactions traded at premiums. What does that say about how bifurcated the private market has become?
Phil Haslett: "I don’t know if it’s a mispricing. There are essentially two vintages of private companies right now. Some companies weren’t built AI-first and have had to adapt. Many raised during the go-go years of 2021, at very high valuations, and may not have raised since… Then there’s a new wave of companies, from 2023 and beyond, that were built with an AI-first mentality. They started from a clean slate, may operate more efficiently, and have a cleaner story for the market. Some of those companies are raising rounds in quick succession at higher valuations."
Crunchbase News: Over the past few years, many private companies have conducted secondaries because they weren’t ready to go public. When should founders consider establishing a company-approved secondary program?
Phil Haslett: "Historically, companies started thinking about liquidity programs after they’d been around five, six, or seven years, largely to reward employees for their patience and provide liquidity to early investors. Now we’re seeing younger companies engage in controlled liquidity and tender offers. One reason is talent retention. There are only so many engineers and data scientists, and companies need to compete for them. Secondary liquidity has become more normalized."
Crunchbase News: What separates software companies gaining investor confidence from those still trading at deep discounts?
Phil Haslett: "Execution. Leadership and execution. It’s about a company’s ability to take a legacy SaaS business and turn it into something AI-enabled across the business. Are you using AI tools to improve internal tasks? Are you building AI into your product for clients? Companies that can combine the stickiness and customer loyalty they’ve already built with their domain expertise and AI are going to do just fine. The ones that are slower to adopt are going to get pummeled."
Future Outlook: The Maturation of Private Markets
Looking ahead, the integration of alternative trading platforms into major global financial institutions like Morgan Stanley signals a permanent shift in how private equity is managed. Secondary liquidity is no longer viewed as a safety valve for distressed or stagnating firms; it is recognized as an essential component of total compensation, portfolio management, and price discovery.
Key Trends to Watch:
- Institutionalization of Tender Offers: With greater participation from Tier-1 banks, structured corporate tender offers will likely become standard operating procedure for high-growth startups well before they consider an initial public offering.
- The Hard-Tech Underwriting Evolution: As investors pour capital into capital-intensive sectors like space tech, defense, and robotics, sophisticated debt financing and asset-backed credit options will play a larger role alongside equity, shifting how secondary markets price long-term risk.
- The Imperative of AI Adaptability: Legacy software enterprises can no longer rely purely on historical customer lock-in. Enterprise buyers expect rapid, native integration of machine learning capabilities. Management teams that fail to execute this transition swiftly will continue to face steep secondary-market valuation penalties.
Ultimately, the secondary market has evolved into the most honest barometer of private tech health. By stripping away the theoretical valuations of infrequent primary funding rounds, platforms like EquityZen provide a transparent, real-time assessment of what the market is truly willing to pay—offering invaluable clarity for founders, builders, and institutional investors navigating the road ahead.
