Spread is the distance between two related numbers—usually what one party will pay and what another will accept.

How it works

In venture secondaries, sellers often anchor to the last primary round price while buyers discount for illiquidity, lack of information, or company performance. The spread between those views drives whether a trade happens. In credit, spread means the extra yield a borrower pays above a risk-free or index rate; wider spread reflects higher perceived risk.

Fund LPs also talk about spread between NAV marks and realized exit prices when judging whether reported valuations match what the market would pay.

Why it matters

• Founders: A wide secondary spread signals investors disagree on your trajectory; it can complicate tender offers or employee liquidity programs.
• Investors: Your edge often comes from correctly pricing spread—buying when fear widens it, selling when optimism compresses it.

Common mistake

Quoting a single “market price” for private shares. Without a tight spread and willing counterparties, the number is hypothetical.

Related ideas

Secondary market, NAV, bid-ask, and discount to last round.

When you will see it

Secondary brokers quote indicative prices with wide spreads when information is thin—common for late-stage private companies with uneven performance.

Questions to ask

• Is the spread driven by company fundamentals or market liquidity?
• What discount to last primary round clears a trade today?
• Are there ROFR or company consent rules blocking transfers?

Practical takeaway

Treat spread as something to define precisely in writing—not assume everyone in the room shares the same meaning. In term sheets, board decks, and LP updates, tie the concept to a concrete decision: a vote, a price input, a fund policy, or a metric formula. When definitions drift, teams misprice risk, miss leverage, or waste cycles on the wrong conversation.