Understanding the Secondary Markets
Essentially the Secondary market is akin to the global stock markets with one significant difference – The companies are not publicly traded on an exchange. Usually, they are companies that are in late-stage VC backed cycles and are either looking to list within a short timeframe or are still in development stage.
We are seeing a substantial amount of new technology firms creating larger stores of value before their initial public offerings. With this comes less risk as they have already carved out their niche or place within their sector and are heading towards profitability.
The sellers of the shares tend to be employees, founders, early-stage VC firms among others who are exciting according to their investment timeframe. Ability Corporate Advisory has positioned itself to work with these entities to provide alternative investment capabilities to its clients and to bring these sometimes-mythical investment opportunities to everyday retail investors.
Given that the majority of these companies have proven track records prior to listing, their ability to raise capital is significantly higher than companies taking the normal route to market. One key factor is that they all fall within growing markets which are conducive to higher rates of return upon exit.
It is our belief that all levels of investors should be able to access these types of financial vehicles should they fulfill the requirements of their wealth management strategy. Given that these types of transactions tend to be invitation only, we are very selective in sourcing and partnering with companies on the secondary markets and every recommendation made has been fully vetted by our in-house analysts.