The most common mistake secondary buyers make is not overpaying — it is misjudging when they will get their money back. A position that returns three times your capital in two years looks very different from one that returns the same multiple in seven years. The internal rate of return, or IRR, collapses under the weight of time. Before placing an indication on any pre-IPO name, a buyer should build at least a rough mental model of holding period risk.

Why 'eventual liquidity' is not a strategy

Private company shares are illiquid by design. When you buy a membership interest in an SPV or take a direct transfer of common or preferred stock, you are not buying something you can sell tomorrow on an exchange. Your exit options are: a company IPO, a direct listing, an acquisition, a company-sponsored tender offer, or a subsequent secondary sale. None of those exits is scheduled. None is guaranteed.

The secondary market itself provides some optionality — you could theoretically re-sell your position to another buyer if supply and demand align — but the bid-ask spread widens materially for positions that have been sitting without corporate news, and buyer demand for a name can evaporate quickly. Treat re-sale as a safety valve, not a plan.

What you can control is how much capital you commit relative to your total portfolio and what minimum IRR you require given your honest estimate of timing. Both of those require you to think carefully about holding period scenarios.

Three holding period scenarios every secondary buyer should model

Before placing an indication, run at least three time scenarios: a base case, a delayed case, and a no-liquidity-event case within your investment horizon.

Base case
A liquidity event occurs within 18–30 months. This might feel optimistic but is reasonable for companies that have already filed confidential S-1 paperwork, completed a major late-stage funding round, or publicly signaled a listing timeline.
Delayed case
A liquidity event takes 36–60 months. This is the scenario most buyers underweight. Regulatory delays, macro conditions, and founder preference for staying private have each pushed anticipated IPOs back by years. Model this and ask: is the IRR still acceptable at the price I am paying?
Extended or no-event case
No qualifying liquidity event occurs within your intended holding period — say, five to seven years. A down-round acquisition, a wind-down, or continued private operation all fall here. This is not a tail scenario for every company; for some names it is a real probability. Ask yourself honestly what the position is worth if this case materializes.

The math behind this is straightforward. If you pay $50 per share and receive $150 per share at exit, a two-year hold implies roughly a 73% IRR. A five-year hold of the same trade implies a 25% IRR. A seven-year hold implies a 17% IRR. Whether those numbers clear your hurdle rate is entirely a function of time, not just multiple.

The price you pay matters less than the combination of price and time. A low entry price at the wrong moment can still produce a mediocre IRR.

Signals that genuinely inform holding period estimates

You will not find an official IPO calendar for private companies, and any source that claims to have one is guessing. That said, some observable signals do carry information about timing probability.

  • Recent primary round activity: a company that has raised a new priced primary round at a higher valuation in the last twelve months has likely reset its internal liquidity clock. Insiders who sold in that round have less urgency; founders may push the IPO horizon further out.
  • Employee tenure and option expiration: as option grants age and expiration dates approach — typically ten years from grant for ISOs — employee pressure for a liquidity event grows. A company with a large cohort of early employees approaching option expiry faces a de facto deadline.
  • Tender offer history: companies that run regular employee tender offers are explicitly managing the liquidity pressure valve. This is good for employees but can actually reduce the urgency to pursue a public listing in the near term.
  • Secondary market bid depth: when buy-side demand for a name dries up and sellers are widening their ask, the market is often pricing in a longer holding period than the consensus narrative suggests. Pay attention to how secondary pricing moves between primary rounds — lags can be informative.
  • Regulatory or compliance milestones: companies in heavily regulated sectors — defense, fintech, biotech — face approval timelines that are genuinely hard to compress. These structural delays are real and should be reflected in your timeline assumptions.

How your vehicle choice interacts with holding period

If you are buying through an SPV rather than via a direct transfer, the SPV's operating agreement governs when and how your interest can be transferred before the underlying company has a liquidity event. Many SPV documents restrict LP transfers entirely, or require GP consent, or impose a minimum hold period. Read the operating agreement before you commit. A vehicle that seemed liquid because the secondary market for the underlying name was active can become illiquid if the SPV terms prevent you from re-selling.

Direct transfers — where you own shares or a right to shares directly rather than through a fund vehicle — give you more flexibility to attempt a secondary re-sale, but you still face the company's own transfer restrictions, consent requirements, and rights of first refusal (ROFR). Neither structure eliminates holding period risk; they just change which party controls your exit optionality.

SPV fees and carry also compound holding period risk. A 2% annual management fee means that every additional year of hold erodes net returns before you account for any change in company value. When you are modeling IRR under your delayed scenario, include the full cost stack of the vehicle.

Position sizing as a holding period hedge

The practical hedge against holding period uncertainty is not to avoid pre-IPO investing — it is to size positions so that the illiquidity does not strain the rest of your portfolio. A position that represents 2–5% of your investable assets ties up capital in a way that most accredited investors can absorb. A position that represents 20–30% of your assets, concentrated in a single name, means your cash flow needs over the next several years are partially hostage to a private company's liquidity decisions.

Diversifying across multiple names — rather than concentrating in one high-conviction bet — also staggers the timing of potential liquidity events. If three of your five pre-IPO positions have different expected holding periods, the probability that at least one exits within a given window rises considerably.

Holding period risk is the one variable in secondary investing that cannot be negotiated away at the time of purchase. Price it accordingly.

What to do before placing your next indication

Before you move forward on any indication, write down your three holding period scenarios and the IRR each scenario produces at the price you are considering. Then ask whether the worst credible scenario — not the tail scenario, but the genuinely plausible one — still produces an outcome you can live with. If it does, you have a properly considered position. If it does not, either renegotiate the price or reduce the size.

Our marketplace lists current indications across 28 issuers, with pricing refreshed hourly so you can see where secondary marks are sitting today relative to the last primary round. Browse current supply at /marketplace, or read our guide to modeling discount to last round before you finalize an entry price.