Private markets

Markets for ownership stakes that are not listed on a public exchange - startups, private companies, and many funds.

Example

Investing directly in a private company, or through a fund that itself holds private companies.

Important

There is no daily price and often no way to sell until a specific event occurs - an acquisition, a listing, a fund winding down - so your money can be committed for years with no exit in sight.

Related terms

• Public markets — Markets where anyone can buy or sell a security, such as a stock exchange.
• Liquidity — How quickly and cheaply an asset can be converted to cash without moving its own price.
• Accredited investor — A legal status, defined by each country's securities regulator, required to invest in many private deals and funds.

Lessons that explain it

• Public versus private markets — One prices your asset every second the market is open. The other might not price it again for years - and that silence is not the same as stability. (11 min)
• A SAFE is a promise of a share, not a share — Most angel checks do not buy stock on the day they are written. They buy a contractual right to receive stock later, at a price a formula computes - and almost nobody reads the formula closely enough to know what it will say. (10 min)

All 578 terms in the Investing glossary