The Two-Market Problem

There is not one venture market right now. There are two. And the gap between them is widening fast.

The first market is defined by AI infrastructure, defense technology, and a handful of mega-cap platforms. These companies are raising at record valuations, attracting institutional secondary demand, and trading within single-digit discounts of their last primary marks. Capital is concentrated, supply is tight, and buyers are underwriting strategic relevance over traditional return profiles.

The second market is everything else. Companies outside the AI and defense clusters are facing a different reality: stale valuations, limited liquidity, and discounts that range from 30% to 60% of their last priced round. Buyer interest is selective, often predatory, and concentrated among a shrinking pool of active secondary desks.

The gap between these two markets is not new. But the depth of the divide has reached a level that creates both structural risk and genuine opportunity for family offices operating in the secondary space.

By the Numbers

Market Structure: What the Data Shows

Total secondary market volume reached approximately $240 billion in 2025. The market has nearly doubled in two years. But the distribution is heavily skewed.

The top 10 most-traded names account for over half of all secondary trading volume. If you are not transacting in the top tier, you are operating in a fundamentally different market.

Wall Street arrived. Goldman Sachs closed its acquisition of Industry Ventures in January 2026. Morgan Stanley acquired EquityZen in October 2025. Charles Schwab made its own secondaries acquisition. The institutionalization of this market is no longer a forecast. It is underway.

Stale pricing remains the dominant issue. The average unicorn last raised over 2.5 years ago. Over one quarter of unicorns have fallen below the $1 billion mark since their last priced round. Primary valuations are increasingly fiction for companies that have not returned to market.

The AI Premium Is Real and Growing

2025 median pre-money valuation by series: AI deals vs. non-AI deals (source: PitchBook 2025 Annual US VC Valuations and Returns Report):

The premium is not a bubble narrative. It reflects real revenue growth, defensible infrastructure positions, and customer lock-in. But it also means that the AI cohort is now priced for flawless execution, and any miss will reprice these assets violently.

Secondary Discount by Vintage Year

Median secondary discount to last primary round, by year of last fundraise:

Vintage year is now the single strongest predictor of discount depth. Companies that last raised in 2021 at peak valuations face the steepest markdowns because their primary prices reflected a market that no longer exists.

Top Traded Names: Where the Volume Lives

The following five companies dominate secondary trading activity. Each represents a distinct thesis and a distinct risk profile.

OpenAI: The largest position in most secondary portfolios. OpenAI completed a $40 billion round at a $300 billion valuation in early 2025, followed by a reported $40 billion credit facility and another funding round in April 2025 that could push the valuation toward $340 billion. Secondary pricing has tracked upward but remains subject to governance risk, organizational restructuring uncertainty, and a competitive landscape that is intensifying faster than most buyers are modeling.

Anthropic: Anthropic closed a $3.5 billion Series E at a $61.5 billion valuation in March 2025. Amazon has committed approximately $8 billion. Secondary demand remains strong, but supply is limited given employee equity structures and early investor concentration. The company represents the clearest pure-play AI safety thesis in the market.

SpaceX: SpaceX is now the most valuable private company in the world at $350 billion following its December 2024 tender offer. The company generates over $10 billion in annual revenue through Starlink. A reported share sale in March 2025 would value the company near $500 billion. The SpaceX-xAI merger creates a new dynamic that every secondary holder must evaluate.

Anduril: Anduril has emerged as one of the strongest secondary performers over the past six months, with pricing up over 55%. The company closed a $500 million Series G-1 at $37.95 billion in January, and secondary bids are reportedly well above that mark as buyers anticipate a new round near $60 billion. Revenue reached $2.15 billion in 2025, up 115% year over year. A $20 billion US Army enterprise contract announced in March further reinforced the thesis.

Stripe: Stripe's February 2026 tender offer valued the company at $159 billion, a 70% increase from prior marks. The company processed $1.9 trillion in payments in 2025. Despite persistent IPO speculation, co-founder John Collison publicly stated an IPO remains "a solution in search of a problem." For allocators, Stripe is increasingly a permanent-capital asset rather than a pre-IPO trade.

Databricks: The most IPO-ready name on the board. Databricks is widely expected to go public in 2025 at a valuation north of $60 billion. The company reached $2.4 billion ARR in late 2024 and has demonstrated best-in-class net retention. For secondary holders, the exit path is the clearest of any top-five name.

The SpaceX-xAI Merger: What It Means for Secondary Holders

In March 2025, Elon Musk announced that xAI would merge into SpaceX at a combined valuation of $1.25 trillion. The transaction, structured as a stock-based acquisition with xAI valued at approximately $80 billion, converts every SpaceX secondary position into a combined AI-plus-space infrastructure holding.

This is not a theoretical event. It directly affects every secondary holder of either company. The implications are structural.

Forced exposure is the primary concern. SpaceX secondary holders did not underwrite an AI infrastructure thesis. They underwrote a space and communications company with $10 billion in revenue and a clear path to IPO. They now own a combined entity whose risk profile, capital requirements, and competitive positioning have fundamentally changed. There is no opt-out mechanism for existing holders.

Correlation risk has increased. xAI holders who also held SpaceX secondaries now have concentrated exposure into a single position. Portfolio concentration risk for secondary funds and SPVs holding both names has increased overnight.

Dilution is the cost of optionality. Pre-merger SpaceX shareholders absorbed a 20% dilution. But they also gained exposure to what Musk is positioning as the future of AI compute infrastructure, and they moved closer to a June 2026 IPO that could be the largest public offering ever. For holders who entered SpaceX secondaries below $500 billion implied, the math still works.

Execution risk is real. Musk's admission that xAI "was not built right" and the departure of 10 of 12 co-founders within months of the merger are not cosmetic issues. Whether SpaceX's operational discipline can absorb and rebuild an AI lab is an open question. Secondary holders are now underwriting that integration thesis whether they intended to or not.

The IPO changes everything. If SpaceX files in June and prices at or above $1 trillion, most secondary holders will be made whole regardless of the merger dilution. The IPO is the forcing function that justifies the current risk.

Where We See Opportunity

The two-market problem creates asymmetric opportunities at both ends of the spectrum.

• AI infrastructure names trading at single-digit discounts with clear institutional demand and visible exit timelines.
• Non-AI companies with genuine product-market fit trading at 40% to 60% discounts purely because they lack the AI narrative. These represent classic value opportunities for patient capital.
• Structured secondaries with downside protection: preferred equity, revenue participation, or convertible structures that limit loss while preserving upside.
• Pre-IPO positions in companies with filed or imminent S-1s, where the risk premium compresses rapidly as the public listing approaches.

Positioning

The SpaceX-xAI merger is a case study in why structure matters. Holders who entered SpaceX secondaries at reasonable marks gained exposure to a $1.25 trillion combined entity with a clear IPO catalyst. But they also absorbed a 20% dilution they did not underwrite at entry. This is what happens when founder-controlled entities consolidate. The upside can be enormous. The terms can shift without your consent.

We remain focused on situations where secondary pricing offers a genuine margin of safety, where fundamentals support the entry, and where the path to liquidity is visible. The SpaceX IPO timeline is the single most important catalyst in private markets right now.

Closing

The venture secondary market crossed $240 billion in 2025. It is heading toward $300 billion. Wall Street is acquiring secondary infrastructure. And yet the fundamental challenge remains the same: most private company valuations are stale, most exit timelines are uncertain, and most buyers are chasing the same 10 names.

The opportunity for family offices lies in the space between the two markets. Not in the consensus trades that institutional desks are crowding into, but in the overlooked positions where genuine value exists at genuine discounts. The AI premium is real, but it is also creating a shadow market of neglected assets that are mispriced for structural rather than fundamental reasons.

That is where we are focused. And that is where the next generation of secondary returns will be generated.

Prince Capital Group is a private investment platform focused on venture secondaries, structured credit, and private equity for family offices. Subscribe at theprincecg.com to receive the April edition.