Trade price is the execution price per share (or per token) in a particular transaction — the number on the trade confirm, not necessarily the company’s official valuation.

How it works

Primary round pricing sets preferred trade price for new issuances — e.g., $4.00 per Series B share. Secondary trades may occur at discount for common, premium for scarce preferred blocks, or flat to last round depending on supply and ROFR dynamics. Tender offers publish a single trade price for eligible sellers, sometimes with tiers by share class.

Multiple trade prices can coexist: crossover buys preferred at $4.00 while employees sell common at $2.00 in the same month. Aggregators report volume-weighted trade prices for private markets; journalists cite them as “implied valuation.”

Transaction multiple analysis uses trade price relative to revenue or EBITDA for M&A, less often for early venture.

Why it matters

• Founders: Employee sales at low trade prices can pressure 409A and morale if not explained as class differences or liquidity discounts.
• Investors: Trade price history informs marks and follow-on pricing. Repeated common sales below preferred may signal insider pessimism.

Common mistake

Equating one small secondary trade price with the company’s official up round or down round valuation. Thin, distressed sales are noisy signals.

Related ideas

See also transaction multiple, 409A, secondary market, and trade break.