The most common question buyers ask before submitting an indication is some version of: "How do I know if this price is fair?" It is a reasonable question. In public markets you can check a ticker. In private markets the last known price is often a primary round that closed twelve, eighteen, or even twenty-four months ago — the very gap that drives secondary sale pricing risk. Since then, the company has grown, burned cash, hired, lost customers, raised debt, or done all five — which is why fundraising round timing reshapes what counts as a fair price. The headline valuation has not moved. Only the underlying business has.

This is not a reason to avoid secondary markets. It is a reason to build your own price opinion rather than borrow someone else's.

Start with what the last round actually bought

A primary round establishes a per-share price for a specific class of preferred stock with specific economic rights: a liquidation preference, possibly a participation feature, an anti-dilution clause, and sometimes a ratchet. That price is not the same as the price of a common share or a Series A share sitting lower in the waterfall.

Before you compare today's secondary ask to last year's primary headline, confirm which security the primary priced and which security you are being offered. Common stock, which most employee grants represent, typically trades at a discount to the most recently issued preferred — 15 to 35 percent is a normal range depending on the waterfall depth. If the secondary ask is near parity with the preferred headline, that is worth interrogating.

The 409A valuation the company files for option-grant purposes is another data point, though it is designed to produce a defensibly low fair market value for tax purposes, not a market-clearing price. Treat it as a floor, not a target.

Build a relative-value bridge from the last known mark

If the last primary closed at a given post-money valuation, you need to answer three questions before you decide whether that mark is a good anchor today.

  1. Has the company's revenue or ARR (annual recurring revenue) changed materially? If the company disclosed metrics publicly or through a leak, apply the same revenue multiple implied by the last round to today's estimated revenue. A company that has grown 80 percent in ARR since its last round may justify a higher mark even if no round has closed.
  2. Have the comp group multiples compressed or expanded? Private company valuations are loosely tethered to public comparables. If SaaS multiples in the public market have contracted 30 percent since the last primary, a flat secondary price is effectively a 30 percent premium to where the market would reprice the company today.
  3. Has the capital structure changed? New debt, a down round that was announced but not disclosed in detail, or a secondary tender offer at a lower per-share price all reset the implied value. Check press releases, LinkedIn posts from the CFO, and the company's investor-relations page — thin as it usually is.
A stale primary mark is not a price anchor. It is a timestamp. Your job is to estimate what that timestamp is worth in today's market conditions.

Use secondary market activity as a cross-check

Active secondary markets produce bid and ask data that is more current than any primary mark. If multiple independent sellers are willing to transact in a tight band, that band contains real price information — not because sellers are always right, but because motivated sellers with inside knowledge of their own company are pricing their own position, often after consulting a financial adviser.

On the Limen Markets platform, listed supply is confirmed — meaning a seller has agreed to the terms before an indication is shown to buyers. When several confirmed sellers across a single issuer are clustered within a narrow range, the mid-point of that range is the closest thing private markets produce to a real-time price. We refresh supply hourly across 28 issuers, so the bid-ask spread you see reflects current seller sentiment, not a three-month-old listing that nobody cleaned up.

The discount framework: what adjustments are reasonable

Buyers sometimes apply a "private market discount" as a catch-all without specifying what the discount is compensating for. Being explicit about each component leads to better decisions.

Illiquidity premium
Compensation for the fact that you cannot sell tomorrow. For most pre-IPO names with no near-term liquidity event, 10–20% below the implied public-market equivalent is historically observed, though ranges vary widely by company maturity.
Information asymmetry discount
You know less than insiders. The company's latest internal metrics, pipeline health, and next-round terms are not available to you. A modest additional discount — often 5–10% — reflects this edge insiders hold.
Waterfall discount
If you are buying common or low-preference stock below a large preferred stack, model out what you actually receive at different exit multiples. A company valued at $10B today may return less than face value on common if it exits at $5B.
ROFR (right of first refusal) risk
Some companies exercise ROFR and substitute a different buyer at the same price. If ROFR is exercised, settlement happens — but your counterparty changes. This is not necessarily bad, but it adds uncertainty. It is not a reason to adjust price downward; it is a reason to understand the process before you commit.

When to walk away

There are scenarios where no discount is large enough to make a position sensible. If the last primary is more than 24 months old, public comp multiples have contracted significantly, and no secondary market activity exists to cross-check the ask, you are operating in near-total darkness. That is not inherently disqualifying for a small position in a high-conviction name, but it should be priced like a venture bet — not like a liquid asset approaching IPO.

Similarly, if the company has raised a large debt facility in the intervening period, that debt sits ahead of equity in any exit scenario. Until you understand the coupon, maturity, and conversion terms, the equity price is speculative in the mathematical sense of that word.

Putting it together

Pricing a secondary position without a recent primary mark is an estimation problem, not a lookup problem. You build a view by triangulating three sources: the adjusted implied value from the last primary (corrected for waterfall position and comp multiple movement), the active secondary market spread, and your own fundamental view of the business.

None of these sources is authoritative on its own. Together they narrow the range of plausible prices enough to make a disciplined decision. If your three data points converge, you have conviction. If they diverge sharply, that divergence is itself the most important piece of information — it tells you that the market disagrees about something fundamental, and you should know what that something is before you buy.

When you are ready to review current supply across our 28 issuers, the marketplace shows confirmed asks with the class of security and last-known primary date alongside each listing. Start there to see where today's secondary prices sit relative to public benchmarks.