The Republic Europe Secondary Market is a private company secondary market that allows buyers and sellers to trade their private company shares. The market gives early investors in startups and other private companies the opportunity to potentially realise liquidity before a formal exit opportunity, and is the only fully functioning early-stage equity secondary market in the UK.

As a private company shareholder, the market enables you to sell your private shares regardless of whether the business has raised investment on Republic Europe before.

As an investor, the market enables you to invest in private businesses, even when they're not currently fundraising.

The Republic Europe Secondary Market now offers over 700+ businesses to invest in, with many thousands of individual share lots offered to investors. The market has transacted over £33M since its inception, and averaged more than £600,000 of transaction value per month in 2022.

Without access to a secondary market, investors normally need to hold onto their shares until the company goes through a full exit event; it is either sold, goes public through an IPO, or a private sale occurs. All of these can take several years, and over the past two decades these timelines have extended even further with many companies able to access growth capital that keeps them private for longer.

You can learn more about other routes for investors to make money in our guide 'How Do Startup Investors Make Money?'.

An investor may have enjoyed healthy paper returns already and the Republic Europe Secondary Market provides them the opportunity to realise these before a full exit event.

The Republic Europe Secondary Market also makes it easier for companies to bring in new, committed shareholders without having to raise a fresh funding round.

The Secondary Market is a marketplace for secondary trades, which differ from investing into a business through a campaign on Republic Europe (known as a primary investment).

Primary investments involve an investor buying newly issued equity from a business. This shareholding can then be sold on in a secondary sale, or trade. So, secondary trades are transactions where shares are sold by existing investors to other investors, rather than issued by the underlying business in exchange for equity.

Anyone who owns shares held under the Republic Europe nominee structure may be eligible to sell their shares on the Secondary Market.

Shares in private companies held externally to the Republic Europe nominee structure can be sold thanks to our partnership with Capdesk. You can learn more about the sale of external shares in this article.

The Secondary Market allows shareholders to sell shares ahead of a full exit event, and potentially realise a return on their investment early.

There are a number of reasons why shareholders would want to sell part or all of their holding in a particular business:

All investment-authorised Republic Europe members are able to buy shares on the Secondary Market.

Please note that existing shareholders in a particular business within the Republic Europe Nominee Structure have access to a company’s Updates and Discussion Forum where they can communicate with the business they have invested in. If you are not currently a shareholder in a particular business, you will not have access to its Updates and Discussion tab in the business page until after you have successfully bought shares.

We strongly suggest you undertake your own due diligence on the business prior to purchasing a share lot. Republic Europe will not accept liability for any claims, losses, or damages you suffer as a result of not undertaking reasonable due diligence.

The Republic Europe Secondary Market allows investors to buy shares in a list of 600 private companies, outside of formal funding rounds.

There are a number of reasons why shareholders would want to buy shares in private businesses on the Secondary Market:

Here’s a quick overview of how a transaction on the Secondary Market works:

The Secondary Market is made possible by the Republic Europe nominee structure. As the nominee is the legal shareholder of all shares purchased through the Republic Europe platform, the ‘trading’ all takes place within one legal shareholding. You can learn more about the nominee structure here.

When investors trade shares they trade their beneficial ownership in exchange for money, rather than actual company shares. This means there are no challenges of transfer restrictions, issuing company involvement or board approvals, which add complexity associated with secondary transactions in private companies.

Allowing trading of shares on the Secondary Market is included into all of our contracts with businesses that raise on the platform. There are, however, some exceptions as businesses are able to opt out of the Secondary Market.

The majority of businesses are opted into Secondary Market trading. The number of businesses available for trading can be seen on the market.

Some businesses that have tradable shares may not be available all the time, as they are ‘ineligible for trading’. A business’ eligibility is dictated by the following factors:

In most cases, ineligibility is likely because we have become aware of a new funding round and (hopefully) that is with us. However, there are a number of other scenarios and in our role as Nominee and with the rights we hold and manage on investors’ behalf, we may have become aware of an imminent price change. Quite often in these latter scenarios negotiations are confidential and we are bound to respect them or risk upsetting the success of them.

Either Republic Europe or the funded business will always share the reason for in/eligibility via email to existing investors or a post on the post-investment forum, if we can. If you haven’t heard from us or the business it’s likely the reason is confidential and we would encourage monitoring the post-investment forums for changes and updates.

There is a 2% transaction fee (min.£/€0.50) for both Buyers and Sellers on the Secondary Market. For more information on the transaction fees, please read the Secondary Market Terms & Conditions.
If the Seller makes a profit (the sell price after paying the transaction fee is greater than the initial purchase price), then a carry fee (also known as an “Administration Fee” or a “Success fee”) will be charged on any profit earned.
For example, if the carry fee is 7.5%:

This carry fee is described in the “Administration Fee” section of the Investment Agreement entered into when the Seller made their investment (which can be found in the Seller’s Republic Europe Investment Account)."

For primary raises on Republic Europe, the company sets its own valuation and through calculations we ensure that the share price is correct. Republic Europe values shares in accordance with its Portfolio Valuation Policy and this is reflected as the company’s share price in your Portfolio.

The company’s share price is marked at ‘fair value’ and this is based on the share price from its most recent investment round. Fair value is also impacted by up-to-date information that we hold on the company.

Investors are able to request to sell their shares on the Secondary Market at a premium or a discount. This can be above or below the fair value, subject to a minimum share price of £.01/share and maximum of 500% the current valuation share price. You are encouraged to perform your own due diligence on the company before making any buy or sell decisions when using the Secondary Market.

The price that shares are sold at on the Secondary Market does not impact the company’s share price or its indicative valuation shown in your Republic Europe Portfolio. This will continue to be valued in line with Republic Europe's Valuation Policy.

Read more about fair value and Republic Europe’ Portfolio Valuation Policy here.

If you’ve found these sections useful, you can sign up to our monthly investor newsletter, the Republic Europe Supplement, where we often explore these topics in more detail and share insights and case studies to help our investor community on their investment journeys.