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Last updated on June 2, 2025
Looking for liquidity without going public? Find out everything you need to know about the London Stock Exchange’s new Private Securities Market.
As a tech founder, you’ll be familiar with the liquidity and capital raising challenges that come with running a private company. The London Stock Exchange’s new Private Securities Market – built on the UK Government’s PISCES (Private Intermittent Securities and Capital Exchange System) framework – offers a secondary market solution designed with companies like yours in mind.
What is the Private Securities Market?
The Private Securities Market stands out from other ways of generating liquidity by enabling private companies to sell shares at planned intervals to investors using established public market infrastructure, while maintaining control over the process.
The Private Securities Market will be available for a variety of different investors, including institutional and sophisticated investors. All existing shareholders of participating companies, including company employees, will be able to sell shares, with eligibility criteria for buying investors set in legislation.
For tech companies, the market offers:
- Scheduled trading windows – Set specific dates when trading can happen, rather than relying on unpredictable private sale negotiations
- Professional investor network – Access to institutional investors, family offices, and sophisticated individuals who meet regulatory requirements
- Participation controls – Define additional criteria around who can view disclosures and who can trade
- Transparent pricing mechanism – Use auction-based price discovery instead of a more protracted private valuation negotiation
- Regulatory compliance structure – Built-in disclosure and investor protection frameworks designed for private companies and investors
Flexible Options for Your Company’s Stage
The private company universe is vast. In the UK alone, there are 2.1 million actively trading companies. According to HarbourVest, there are currently over 215,000 companies with either private equity or venture capital backing. With such a huge population of companies, the liquidity needs of the companies are highly varied.
The Private Securities Market accommodates different company structures, including VC-backed, angel-funded, or crowdfunded companies. Tech companies can also utilise permissioned (closed) auctions that allow for setting parameters around share purchasers.
This flexibility lets you either diversify your cap table with new strategic investors or consolidate ownership – all while balancing the needs of existing investors who may have different liquidity timeframes.
If your company is on the pathway to an initial public offering (IPO), the Private Securities Market can be used to build a track record with investors, providing companies with the necessary experience and market exposure. But for companies that have no immediate intention of going public, the permissioned auction framework provides the flexibility to further specific goals, without the pressures of public-market obligations.
Strategic Benefits for Tech Companies
The Private Securities Market can serve several strategic benefits for tech businesses:
- Managing investor exit pressure – Give early investors liquidity options while keeping later investors committed to longer-term growth, especially useful where shareholders who participated in earlier rounds may have a higher need for liquidity than those who participated in later rounds.
- Employee retention through equity – Offer staff meaningful share options with realistic exit opportunities, giving employees confidence that they will be able to realise value from these incentives over time, rather than waiting for a single and potentially uncertain exit event. Where there’s sufficient internal demand, permissioned auctions can be utilised to facilitate employee trades without opening to external investors.
- Founder wealth diversification – Gradually reduce personal concentration risk by selling portions of holdings over multiple auctions, making use of repeat auctions to unwind a position over time.
- Streamlining complex ownership – Consolidate dozens of small shareholders into fewer, larger positions through minimum purchase requirements, allowing many small selling orders to match against a smaller number of larger orders.
- Preparing for scale – Build investor relationships and market familiarity before considering public markets or major fundraising rounds, particularly attractive for companies already disclosing significant corporate information to existing and potential investors.
Getting Involved
The Private Securities Market launches later this year, opening a new chapter for tech founder liquidity options in the UK.
If you’re interested in leveraging this platform for your company contact the London Stock Exchange team on their website to learn more.
This article is sponsored by the London Stock Exchange.
