The private secondary market for venture-backed shares has entered a new phase following the completion of Morgan Stanley's acquisition of EquityZen in January 2026. The deal, announced in October 2025, brings one of the longest-standing trading platforms for pre-IPO stock under the wing of a major investment bank, signaling Wall Street's deepening interest in a market that has grown alongside the trend of companies staying private longer.

What You Need to Know

Private secondary market platforms like EquityZen allow employees and early investors in venture-backed companies to sell shares before an IPO or acquisition. The market has grown as startups delay going public, with pricing on these platforms offering a real-time read on investor sentiment toward private companies. Morgan Stanley's acquisition brings institutional credibility and liquidity to a market that has long operated outside traditional Wall Street channels. Phil Haslett, EquityZen co-founder and chief strategy officer, remains with the firm and continues to track valuation trends across AI, SaaS and hard-tech sectors.

The Secondary Market Under Morgan Stanley

EquityZen was founded in 2013 and built a marketplace for shares of privately held companies, giving shareholders a way to exit before a liquidity event. The New York-based company gained traction as the number of unicorns surged and the average time to IPO lengthened. Morgan Stanley's acquisition formalizes a relationship that had already been growing; the investment bank had been a strategic partner in secondary transactions.

Phil Haslett told Crunchbase News that the acquisition allows EquityZen to tap Morgan Stanley's distribution network and regulatory infrastructure, potentially increasing transaction volumes. The deal also gives Morgan Stanley a proprietary data feed on private company valuations, a valuable asset for advising its own clients.

AI Premiums vs. SaaS Discounts

A key theme Haslett highlighted is the divergence in secondary pricing between artificial intelligence companies and traditional software-as-a-service startups. AI companies, particularly those in infrastructure, robotics and space tech, are trading at premiums, while many older SaaS firms are seeing discounts.

  • Figure AI: Enters the top 20 most traded private companies, reflecting demand for humanoid robotics.
  • Scale AI: Data labeling for AI models attracts premium pricing in secondary markets.
  • Redwood Materials: Battery recycling positions this company as a hard-tech favorite.
  • Project Prometheus: A space-focused startup riding the wave of interest in orbital infrastructure.

According to Haslett, this shift is not simply a chase for scarce supply but a durable thematic change. Investors are betting on sectors with generational growth potential, even if those businesses require more capital and take longer to generate predictable revenue than a typical SaaS company. The market is asking whether the overall opportunity is large enough to justify longer holding periods.

IPO Outlook Beyond SpaceX

The second quarter of 2025 was one of the strongest for venture-backed IPOs since 2021, but SpaceX accounted for a large portion of that activity. Haslett noted that removing SpaceX, the IPO market for late-stage startups is better than it was three to six months ago, but post-IPO performance has been mixed. Companies like Cerebras saw initial enthusiasm followed by a slowdown.

Haslett sees opportunity across the AI production curve, from energy for data centers to compute orchestration and training efficiency. He expects a busier summer than usual for IPOs, with companies that waited for SpaceX to exit the pipeline now feeling more confident.

Why This Matters

The secondary market is becoming a leading indicator for IPO readiness and sector rotation. As Morgan Stanley integrates EquityZen, the pricing data it generates will influence how institutional investors allocate capital to private companies. For employees holding equity in late-stage startups, the ability to sell shares becomes more accessible and potentially more liquid. The divergence between AI and SaaS valuations suggests that venture capital's next cycle will be shaped by physical-world technologies rather than pure software, with implications for everything from fundraising timelines to exit strategies. The acquisition also raises questions about concentration of power: with a Wall Street giant controlling a key secondary platform, the line between private and public markets continues to blur.