Private Markets: 3 Surprising Reactions to Covid19

Nico Sand
Published in
3 min readJun 30, 2020


The speed at which late-stage private markets are maturing, and their resultant liquidity, continues to surprise.

Amid the most disruptive global macroeconomic shock since the Great Depression, many capital markets professionals expected two things: (i) greatly curtailed venture capital financing activity, and (ii) private stock secondary resales to seize up.

As anticipated, venture capitalists adjusted quickly to the uncertainty by pulling back on new early-stage investments. In Silicon Valley, the number of Series A and B financings fell 48% in March and April versus January and February totals.¹ A full 30% of March and April financings were either flat or down rounds, compared to 17% in 2019.² Venture capitalists’ anticipated need to direct dry-powder toward existing portfolio companies and reluctance to call capital during the market turmoil likely contributed to the retreat.

But how did late-stage venture-backed company liquidity fare? Now with over 80 sell-side members, ZX is the world’s only multi-broker platform built specifically for trading private stock. Data reflecting ZX member order flow provide an interesting lens through which to observe broader market trends. Here are three trends that surprised many:

  1. Institutional demand for late-stage private shares persisted through the public market crash. In the first three months of the Covid19 crash, ZX buy-ticket volume increased 170% compared to the prior year’s average.³ Large, sophisticated investors saw buying opportunities in late stage private markets through the downturn.
  2. Bids and offers quickly converged for late-stage private companies. Many ZX members saw record matched order volumes within 10–15 trading days of the public market collapse. Markets seize up when buyers react to a changing environment faster and more dramatically than sellers, one of the factors underlying ‘illiquidity.’ However, record market volumes were achieved when buyers and sellers changed pricing expectations to a commensurate extent and time frame. We saw a key maturing market characteristic: volatility increasing transaction volumes vs. volatility causing extended market shutdown in less mature markets.
  3. Late-stage company private markets behaved as a collection of highly differentiated companies rather than an index. While public markets crashed, some private companies traded down as much as 64% from pre-crash levels while others traded at up to 26% premiums. Investors treated components of the late-stage market as differentiated investments and priced their bids and offers accordingly, behavior typical of more mature markets.

Orderly trading on ZX through — and following — the onset of this historic economic recession evidences the increasing maturity and liquidity of private secondary markets. To inquire about trading private stock, contact

This communication shall not constitute an offer or solicitation to buy or sell any securities in any jurisdiction nor does it constitute investment advice. Private securities are generally illiquid and there is no guarantee that a secondary market will develop for any private security. All securities transactions are effected through Zanbato Securities LLC, member FINRA / SIPC and authorized to operate ZX, an Alternative Trading System filed with the SEC.


  1. Fenwick & West
  2. Fenwick & West
  3. Three month period defined as Feb 19th — May 18th, measuring the three months following the S&P 500s fall from pre-Covid19 highs