A stapled secondary combines a primary investment (new shares to the company) with a secondary purchase (existing shares from founders, employees, or early investors) in a single close.

How it works

The lead investor might put $30M into the company and buy $10M from selling shareholders. Founders get partial liquidity without a separate secondary process. The primary portion funds growth; the secondary portion does not hit the balance sheet but changes the cap table. Pricing may differ: primaries often use a fresh valuation; secondaries sometimes carry a discount.

Boards must manage conflicts—who sells, how much, and whether inside sellers know material nonpublic information.

Why it matters

• Founders: Useful for de-risking personally while still raising growth capital in one negotiated round.
• Investors: New money investors accept cap table cleanup; sellers trade liquidity for potentially lower secondary pricing.

Common mistake

Reporting the entire stapled amount as “capital raised.” Only the primary portion is new company funding.

Related ideas

Secondary sale, primary round, tender offer, and recapitalization.

When you will see it

Growth rounds sometimes include founder secondaries stapled to primary capital so a new lead can buy a meaningful stake while fresh money hits the company balance sheet.

Questions to ask

• What fraction of the round is primary versus secondary?
• Do all selling shareholders get the same price?
• Does the board approve seller selection and amounts?

Practical takeaway

Treat stapled secondary 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.