Broker (Secondary Market)
A licensed intermediary who matches buyers and sellers of private company shares.
Definition
A secondary market broker is a registered intermediary who connects sellers of private company shares with potential buyers. Brokers facilitate price discovery, negotiate terms, and handle transaction logistics. They typically charge a commission of 3-5% to the seller and sometimes a fee to the buyer as well. Major secondary brokers include Forge, EquityZen, and Hiive.
Why it matters
If you want to sell private shares, a broker can find buyers and handle the process. However, their fees reduce your proceeds, and they may not be able to find a buyer at a price you find acceptable. Compare multiple brokers before committing.
Example
You want to sell 5,000 shares of your pre-IPO company. A broker lists them at $40/share and finds a buyer at $37. After a 4% commission ($7,400), you receive $177,600. Without the broker, you might not have found a buyer at all.