Why do pre-IPO secondary prices differ from the last funding round?

A funding round prices new preferred shares with protections such as liquidation preferences; secondary sales are often of common shares without them, in small blocks, with transfer risk and delays. Prices can sit above or below the round depending on demand, share class and how likely the transfer is to close.

What is a right of first refusal in a private company?

A right, usually in the bylaws or a stockholder agreement, letting the company (or its investors) buy shares a holder has agreed to sell, on the same terms. It means an agreed secondary sale can be taken over by the company, and buyers can spend weeks on a deal that never closes.

How long does a pre-IPO secondary transfer take?

Often weeks to months: the company typically has a set period to exercise its right of first refusal and must approve the transfer, after which legal documentation and settlement follow.

Private markets · Structures

How are pre-IPO secondary shares priced, and why do so many deals fail to close?

Agreeing a price is the easy part. Whether the company approves the transfer, or uses its right of first refusal to take it over, decides whether you end up owning anything.

Facts checked 7 Oct 2026 · By Dipankar Sarkar · Education only — not an offer

Price: round price, tender price and secondary price

There are three kinds of reference price. A primary round prices newly issued preferred shares. A tender offer is a company-organised sale of existing shares at one price to approved buyers. A secondary trade is a negotiated sale of particular shares, often common stock, between one holder and one buyer. Because the share class, protections, block size and transfer risk differ, these prices diverge. Any quote should say which share class it refers to and whether the price is per share or as an implied valuation.

Approval and the right of first refusal

Many private companies require approval for any transfer and hold a right of first refusal. FINRA warns that without that approval the transaction may be void and the investor or fund may not own the stock at all.

Restricted shares of a private company generally must be held a year before public resale under Rule 144. Private resales between investors often rely on Section 4(a)(7), which requires accredited buyers, no general solicitation and specified information about a non-reporting issuer.

Who may be paid to arrange a trade

The SEC treats compensation tied to the size or success of a deal as a hallmark of broker activity, which generally requires registration and FINRA membership, including for some "finders".

What the companies themselves say

OpenAI

OpenAI says all of its equity is subject to transfer restrictions, that any transfer without its written consent is void, and that SPV interests, tokenised interests and forward contracts sold without approval will not be recognised and may carry no economic value.

Anthropic

Anthropic says any sale or transfer of its stock, or any interest in it, not approved by its board is void and will not be recognised on its books. It does not permit SPVs to acquire its stock, treats transfers to SPVs as void, and warns about forward contracts and tokenised securities.

Stripe

Stripe says almost all stock held by current and former employees is subject to a right of first refusal, that sales which bypass it are void, and that most employee stock also needs board authorisation to transfer.

Databricks

In July 2026 a broker launched Databricks exposure through an SPV holding a stake in a third-party fund that owns the shares, so the shareholder of record remains that fund. A Databricks spokesperson said the company had no engagement or relationship with the broker.

Frequently asked questions

Why do pre-IPO secondary prices differ from the last funding round?: A funding round prices new preferred shares with protections such as liquidation preferences; secondary sales are often of common shares without them, in small blocks, with transfer risk and delays. Prices can sit above or below the round depending on demand, share class and how likely the transfer is to close.
What is a right of first refusal in a private company?: A right, usually in the bylaws or a stockholder agreement, letting the company (or its investors) buy shares a holder has agreed to sell, on the same terms. It means an agreed secondary sale can be taken over by the company, and buyers can spend weeks on a deal that never closes.
How long does a pre-IPO secondary transfer take?: Often weeks to months: the company typically has a set period to exercise its right of first refusal and must approve the transfer, after which legal documentation and settlement follow.

Sources

FINRA — Know the risks of pre-IPO funds and potential fraud (18 Aug 2026)
Morgan Lewis — The FAST Act, Section 4(a)(7) and Section 4(a)(1½) (9 Jul 2024)
U.S. SEC — Guide to broker-dealer registration
OpenAI — Unauthorized OpenAI equity transactions (23 Aug 2025)
Anthropic (Claude Help Center) — Unauthorized Anthropic stock sales and investment scams (29 Jun 2026)
Stripe Support — Forward contracts, tokens and other unauthorized liquidity transactions
CNBC — Clear Street pre-IPO platform and Databricks (31 Jul 2026)
SEC Investor.gov — Pre-IPO investment scams (investor alert) (7 Jun 2024)

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