Glossary
Secondary Fund
An investment fund that buys existing shares from existing shareholders (not new shares issued by company) — providing liquidity without dilution.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
Secondary Fund is an investment fund that purchases existing shares from current shareholders (founders, early employees, prior investors) rather than buying new shares issued by the company. The transaction provides liquidity to sellers without diluting other shareholders.
Secondary funds operate at all stages: early secondary (buying angel positions from Series A), mid-stage secondary (employee/founder liquidity at Series C-D), and late-stage secondary (large secondary rounds preparing for IPO).
India Context
Indian secondary fund activity grew dramatically post-2022. Major Indian secondary players in 2026: TPG NewQuest, Tribe Capital secondary, ChrysCapital Continuum, Bharat Innovation Fund secondary, plus dedicated secondary arms of larger funds (Sequoia Capital India secondary, etc.).
Typical Indian secondary discount to primary round price: 15-30% reflecting lack of preferred protections and signalling.
Example
An Indian unicorn at ₹3000Cr valuation runs a ₹150Cr secondary round: founders and early employees sell to a secondary fund at ₹2200Cr effective valuation (27% discount to primary). No new shares issued, no dilution of non-selling shareholders.
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