News

Crowdfunding's secondary market

June 20, 2017 • By TAB team

Illiquidity has been a major concern for startup investors to date. Now Seedrs is getting to grips with the issue by enabling investors to trade shares in startups that have raised capital via its platform.

Illiquidity has been a major concern for startup investors to date. Now Seedrs is getting to grips with the issue by enabling investors to trade shares in startups that have raised capital via its platform.

We know there's demand out there. Founders Circle estimates a total of $1.2 billion in secondary transactions in private companies in 2016.

This bold move from Seedrs does more than signify the maturity of the asset class. It’s bound to accelerate adoption of startup investing amongst institutional investors who have previously stuck to more liquid public markets.

These developments are positive over the long term. But in the short term they raise uncomfortable questions regarding the transparency of the private market and the fundamental lack of primary and secondary market data for non-public companies. Regulators take note.