Secondary Sale
Definition
A transaction in which existing shareholders sell their equity to new investors rather than the company issuing new shares. Secondary sales provide liquidity to founders and early investors without diluting other shareholders or changing the company's capitalisation.
Related Terms
Related FAQ
What is a co-sale right (tag-along right for shareholders)?
Co-sale rights allow shareholders to participate in a sale of the company on the same terms negotiated by majority shareholders, preventing discrimination against minorities.
Read full answer →What is a recap (recapitalisation) and why do founders propose them?
A recap allows founders and early investors to sell a portion of their shares to new investors without an exit, providing partial liquidity before the full company exits.
Read full answer →What is a right of first refusal (ROFR) and how does it affect secondary sales?
ROFR gives the company or other shareholders the right to purchase shares before a shareholder can sell them to an external buyer, preserving cap table control.
Read full answer →Put this knowledge to work
Use Opagio's free tools to measure and grow the intangible assets that drive your business value.