Secondary markets
The term "democratisation" is often used in discussions about alternative investments – and rightly so.
Historically, economic systems have evolved to give more people the chance to own and manage assets.
A similar development is now taking place within private equity and venture capital, where technology-driven solutions make it easier for more investors to participate in private markets (by being able to both buy and sell shares in private companies) and thereby create long-term value.
Private investment forms – such as private equity (PE) and venture capital (VC) – have traditionally been limited to institutional investors, wealthy individuals and insiders. High minimum investments and long investment horizons have created significant barriers for other investors.
But the emergence of secondary markets is starting to change this.
The growing accessibility of the secondary market
New platforms, such as Accumeo, make it possible for investors to buy and sell shares in private companies – before a traditional exit, such as an IPO or an acquisition, takes place.
By law, these secondary markets are limited in terms of the complexity and automation of transactions. Despite this, they create a more accessible market by exposing investment opportunities in private companies to a broader group of participants while also reducing the risk profile.
Broader exposure
On the secondary market, both private individuals and smaller institutions, such as pension funds and foundations, can gain access to private equity and venture capital investments – asset classes that were previously inaccessible due to high capital thresholds.
Accumeo offers a platform where investors can be connected with sellers of shares in private companies ahead of an IPO. This makes it much easier to buy shares in private companies and thereby gain exposure to a different type of investment opportunity than those available on the public markets.
At the same time, investments in private companies carry significant risks, including limited liquidity, less access to information and the risk of losing the entire investment. Past returns are no guarantee of future results.
Investors should carefully review all available information, including company documents and risk factors, before making an investment decision.
Better opportunities for liquidity
Secondary markets also improve liquidity for unlisted shares.
Unlike public markets, where shares can be bought and sold daily on regulated exchanges, investors in private companies often lack a clear path to exit. They may have significant value tied up in unlisted shares, but limited opportunities to realise these holdings before the company is sold or goes public.
Secondary markets broaden the pool of potential buyers and sellers by providing a technology-driven platform where the parties can find each other. There is no guarantee that a deal will be completed, but the platform creates transparency and increases the visibility of opportunities that would otherwise have been hard to discover through traditional networks.
By combining technology with market data and analysis, the secondary market creates new opportunities for both investors and shareholders in private companies. Accumeo is part of this development – and we make trading in unlisted shares easier, more transparent and more efficient.
If you have further questions about investing in startups, you are welcome to get in touch.
Our platform makes working with secondary shares easier and smoother. We offer shares such as Kaunis Iron, Blykalla, Exeger, Klarna and OpenAI.
