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The U.S. stock market has officially dipped into , largely driven by big declines for tech stocks this year. That dip has caused ripple effects in the private markets too. One area that鈥檚 particularly noticeable: Secondary markets platforms, where shares of startups trade.

A 鈥渉uge influx of sellers鈥� have signed up for the secondary markets platform this year, according to company COO .

In fact, Forge has never had as many sellers on the platform as it does now. The disconnect in supply and demand has resulted in a 9% decline in prices of private companies trading on the platform between the fourth quarter of 2021 and the first quarter of 2022, according to Forge Global鈥檚

Clearly, we鈥檙e

Perfect setup for buyers

When the IPO market is at a standstill, as it largely has been this year, action kicks up in the聽 private markets. Many private company shareholders still want liquidity, and with no IPO in sight, platforms such as Forge, and are especially helpful for startup employees or investors who want to cash out sooner rather than later.

That said, sellers are rushing in to unload shares, and some companies aren鈥檛 selling for the premiums they were even a few months ago.

If you鈥檙e looking to buy equity in a private company, now may be the time. 鈥淭he biggest thing we鈥檝e seen over the first half of the year is the market has really changed from being a seller鈥檚 market to a buyer鈥檚 market,鈥� Cobos said.

In April, Forge Global saw a 鈥渟teep increase in the percentage of buyers seeking private shares at a discount,鈥� according to the company鈥檚 most recent report.

Companies on the platform are still trading at a premium relative to their last funding round. That means there鈥檚 still some demand for those shares, said Cobos. But over the first quarter of 2022, the premium has declined from around 58% compared to the last round to around 24%, according to Forge鈥檚 May report.

鈥淲hether you鈥檙e looking at the public markets or the private markets, this is a buying opportunity,鈥� Cobos said. 鈥淲e鈥檝e seen prices come down significantly. As long as you have the appetite and obviously the longer-term investment mindset, this is a great time (to buy).鈥�

Decline in valuations matters

The fall in prices for private company shares has been spurred by the decline in public company valuations. After riding a record boom during the pandemic, shares of public tech stocks in particular have been hammered this year as worries about inflation, rising interest rates and Russia鈥檚 invasion of Ukraine prompt a broad market selloff.

Private companies have reacted on their own to adjust to the reality of public valuations. Perhaps most notably, Instacart lowered its own valuation from around $39 billion to $24 billion.

More companies also are looking to give their employees liquidity options. With startups staying private longer, private companies 鈥渞ecognize that it鈥檚 not fair for an employee to work 13 years before they鈥檙e able to sell some of their position,鈥� Cobos said.

鈥淚f you鈥檙e not giving your employees the opportunity to sell and your competitors are, I think it鈥檚 going to cause issues around attracting talent and retaining talent,鈥� he said.

Related reading:

• What鈥檚 Behind The Sad State Of Q1 IPOs
• After Record Venture Boom, It鈥檚 Suddenly A 鈥楳ad Rush To Grab Capital鈥�
• Halfway Through 2022, And The Outlook For SPACs And IPOs Isn鈥檛 Good

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