Private markets aggregate capital formation and trading in non-public companies and related instruments—where startups raise venture rounds long before any IPO.

How it works

Founders access private equity, venture, and private credit capital through negotiated deals with limited disclosure compared to public issuers. Valuations mark periodically, not daily. Secondary markets allow some liquidity for employees and early investors before IPO, but remain less transparent than public exchanges.

Regulatory frameworks differ by jurisdiction—accredited investor rules, fund registration, and disclosure in PPM documents govern who participates.

Why it matters

• Founders: Private market fundraising is relationship and narrative driven; liquidity is deferred in exchange for growth capital and fewer public reporting burdens.
• Investors: Private market funds lock up LP capital for years; return realization depends on exits, not market trading.

Common mistake

Assuming private market valuations are as verified as public market caps—marks rely on last round pricing and GP judgment between financings.

Related ideas

See liquidity event, secondary sale, and limited partner.