The research is clear, companies are stalling IPOs and staying private for longer than ever before. In 2014, the average startup went public after spending 6.9 years in the private market, according to data from research company Morningstar Indexes and Pitch Book. By 2024, this had risen to 11 years.

This global phenomenon has real impacts for employees who are waiting much longer to cash in their companies shares, typically sold during a traditional IPO or M&A. This creates a challenge for founders to keep their employees motivated and retain them for longer. This has led to the rise in regular secondary share sales — liquidity events where employees and early investors can sell their privately held company shares to new buyers.

Unlike a primary funding round, in which a startup issues new shares to raise money for the company itself, a secondary sale allows employees to sell existing equity.