Exploring Secondaries: Private Stock Insights

Interview Snapshot

Rohit Yadav: Sim, welcome! Can you start by introducing Hiive and the vision behind it?
Sim Desai: Thank you, Rohit. It’s great to be here. Hiive is a liquidity management platform for private companies and their shareholders. We help private companies offer liquidity to their shareholders in an automated and centralized environment—with proper controls, a secure and regulated process. Investors in private securities can also come to Hiive to explore pre-IPO opportunities.

The inspiration for Hiive came from observing how chaotic the secondary market had become by the late 2010s. Originally, private market secondaries gained traction with Facebook and Twitter around 2013. Over time, this market grew rapidly but also became fragmented, with brokers running around with no centralized system and no oversight. It was clear that private company shares—like shares of Uber, for example—could benefit from central price quoting, like public stocks. We believed the entire process was ripe for automation.

“Back in 2011, private securities trading began taking off with companies like Facebook and Twitter…. By the late 2010s, the secondary market had become chaotic, fragmented, and lacked oversight.”

Rohit Yadav: Hiive is focused on company secondaries, but the broader secondary market includes GP and LP secondaries too. Can you walk us through that landscape?
Sim Desai: Sure. The traditional secondary market in private equity primarily dealt with fund interests—specifically LP and GP-led secondaries. LP-led secondaries involve the trading of investments in funds by limited partners, and GP-led secondaries involve the GP, or general partner, bringing in new capital to offer liquidity to LPs while continuing to manage the fund. Company secondaries, which are our focus at Hiive, deal with the actual portfolio companies held by these funds. So we facilitate transactions in the shares of these companies. My own background started in LP secondaries, so I've seen the evolution firsthand.

Rohit Yadav: Company secondaries have gained more attention recently. Why is that?
Sim Desai: Historically, startups either succeeded and went public or failed. But over the last decade, we’ve seen highly valuable startups stay private longer, often without any exit. There are also regulatory barriers—like antitrust rules in the U.S.—that have limited M&A activity. Combine that with name recognition of tech companies and limited exits, and you’ve got a recipe for a strong secondary market. There’s massive demand for shares in these companies, but no public exit. So naturally, secondary trading fills that void.

Rohit Yadav: Speaking of demand, a lot of executives and employees want to sell their vested shares. How big is that part of the market?
Sim Desai: It’s grown immensely. Traditionally, there was stigma around selling your shares—it was seen as disloyal or a lack of alignment with the founder. But that made sense only when IPOs were viable exit routes. Now that many companies are electing to remain private longer, employees holding stock for 7–10 years without liquidity is not sustainable.

We’re now doing about $200 million per month in transaction volume. And interestingly, our studies show that employees at companies who allow liquidity rate their employers more favorably. They’re actually more likely to stay and recommend their workplace. So the idea that secondary sales reduce alignment is flawed.

“A lot of private companies now choose to stay private; they don’t want to go through the rigors of becoming public…. Employees have vested stock but no way to monetize it, and many have been holding it for 7–10 years.”

Rohit Yadav: So how does tech reshape this market?
Sim Desai: Two major trends are emerging. First, from a tech perspective, companies need tools to manage the entire transaction process—tracking, executing, signing agreements, exercising options, and so on. We automate all that. Second, on the market side, consolidating fragmented liquidity pools is key. Private markets are inherently illiquid, so centralizing activity leads to better pricing and outcomes. We partner with external brokers and offer generous terms to ensure more activity comes to Hiive. We envision becoming market infrastructure, like an exchange, with brokers as participants.

Rohit Yadav: So brokers and platforms can co-exist?
Sim Desai: Absolutely. Brokers won’t go away. They’ll continue to play a role—they’ll operate on platforms like Hiive. It’s similar to how public exchanges evolved from market makers into infrastructure. We’re already seeing this trend play out.

Rohit Yadav: Where does the market stand in terms of efficiency? Has it matured enough?
Sim Desai: It’s not yet an efficient market. Buyers often participate across platforms. Sellers, especially employees, are one-time participants and may not shop around. So liquidity is fragmented. Consolidating market activity into a central pool will help. We’ve made great strides in automating the process, but there’s still work to do in terms of end-to-end efficiency.

“The market is not yet fully efficient—there are fragmented pools of liquidity and inconsistent pricing… A lot of sellers are one-time participants, so they’re not as sophisticated or price-sensitive as recurring buyers.”

Rohit Yadav: Are there dedicated funds targeting company secondaries?
Sim Desai: Yes, but not traditional VCs—they're typically limited to investing 20% of their capital in secondaries. However, many secondary funds, crossover funds, and hedge funds operate as Registered Investment Advisors (RIAs) and can actively trade. Some large VCs are even converting to RIAs to access this market more freely.

Rohit Yadav: Let’s talk bid-ask spreads. What are you seeing on the platform?
Sim Desai: More liquid companies—like those in our Hiive 50 index—have tighter spreads, sometimes as low as a few percent. For less liquid names, spreads can go above 20%. And for some securities, there’s no spread at all because there's no market. Since our inception, we’ve executed closed trades in over 300 different companies. On a quarterly basis, about 50 companies are actively trading.

“For liquid securities, you may see spreads as low as a few percent. For illiquid ones, spreads can exceed 20%…. Yes, premiums do exist—especially during bull markets when companies outperform their last valuation round.”

Rohit Yadav: What about premiums? Are some stocks trading above last round valuations?
Sim Desai: Yes. In bullish times, especially, many hot names trade at premiums to their last round. If a company raised nine months ago and has grown significantly since, you’d expect its stock to trade higher. Even in today’s tougher market, some of these AI sectors still command premiums.

‍Rohit Yadav: Hiive’s ‘2025 State of the Private Market’ report mentioned-“marketplace dynamics are shifting in favor of sellers.” What does that mean?
Sim Desai: In illiquid markets, when the number of buyers increases and sellers are scarce, buyers end up bidding higher.

That’s what we saw through much of 2024. Public markets were rising, creating a bullish sentiment. Recently, though, things have cooled, and we’re seeing momentum tilt back toward buyers.

Rohit Yadav: Do you think this liquidity will broaden, or will we always see a few hot names dominating?
Sim Desai: I think the market will continue to broaden. Five years ago, I wouldn’t have believed we’d see 300 companies traded on one platform. The market is still dominated by 20–30 names, but that’s changing. Liquidity and pricing will improve as companies themselves support liquidity. Allowing shareholders to share high-level KPIs—without giving away sensitive data—can help companies attract buyers, reduce bid-ask spreads, and even command premiums.

“In 2024, we saw a strong tilt toward a seller’s market. That’s now reversing due to public market slowdowns.”

Rohit Yadav: That transparency must encourage more investor participation too?
Sim Desai: Exactly. Transparency has many forms. Price discovery is one—we want to get to the point where rational price charts exist for private companies. Transparency around performance metrics is the next frontier. High-level indicators like revenue growth don’t compromise competitive positioning, but they help investors make informed decisions.

Rohit Yadav: Looking ahead, if markets improve, IPO windows open, what happens to secondaries?
Sim Desai: Liquidity will increase. In a bullish market, buyers chase sellers, driving prices up. Sellers see those gains and are more willing to transact. So ironically, secondary market activity rises in good times, not bad. If IPOs return, we’ll likely see more pre-IPO demand and more sellers entering the market at attractive prices.

Rohit Yadav: Thank you, Sim, for such a comprehensive conversation. Wishing you and Hiive continued success.
Sim Desai: Thank you, Rohit. It was a pleasure.