Once Taboo, Now a $112B Bet on Secondary Markets | Term Sheet

Why It Matters

The growth of secondaries alters how liquidity, ownership and price discovery work in late‑stage tech, raising systemic risks around transparency and investor protection while potentially determining the success and valuation of massive upcoming IPOs.

Summary

What was once a taboo backroom trade has exploded into a roughly $112 billion U.S. venture secondaries market, where investors buy and sell private-company shares before IPOs—often off‑record and opaque. G Squared founder Larry Ashbrook describes turning early hustles in Twitter and Spotify shares into a mainstream strategy as startups stay private longer and demand for liquidity rises. The market relies heavily on direct secondaries and SPVs, creating both access to coveted pre‑IPO stakes and layers of opacity about who actually owns what. High-profile impending listings from SpaceX, OpenAI and Anthropic are accelerating interest and could reshape public market entry for private tech giants.

Original Description

A hidden market for shares of the world's hottest private companies has quietly grown to an estimated $112 billion, and most of it happens off the books. As SpaceX, OpenAI, and Anthropic edge toward going public, the investors who poured billions into pre-IPO shares may not actually know what they own. Larry Aschebrook founded G Squared in 2011, when trading secondaries made you a "bottom feeder" who got cease-and-desist letters. Today the firm manages north of $8 billion and holds stakes in SpaceX, OpenAI, and Anthropic. Fortune's Allie Garfinkle sits down with Larry to talk about the shadow market behind the biggest names in tech, why layered SPVs could leave investors with nothing, and the reckoning he sees coming when these companies finally go public.

0:00 The Hidden Market Behind Tech's Biggest Names

0:56 Hot IPO Summer and the $4 Trillion Question

1:58 They Wouldn't Return His Calls

3:15 His First Trade? Twitter Stock

6:06 What Secondaries Actually Are

7:26 The SPV Trap: Fees Stacked on Fees

18:55 Back When This Was Taboo

21:35 What Facebook's Lockup Should Teach You

23:56 "SpaceX Could Force a Reckoning"

24:34 The Coming Wave of Lawsuits

27:33 Peeling the SPV Onion

29:11 Why 20 IPOs Won't Fix This

33:20 How Much Fraud Comes Out of SpaceX?

34:31 Smoke, Mirrors, and the Real Price

36:44 Is SpaceX a Real Business?

40:22 Secondaries: The Next Index Funds?

44:38 From $30B to $300B to Trillions

45:08 Anthropic Hits $900 Billion

48:30 The Conflict-of-Interest Question

50:28 Is There Enough Money in the World?

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