2025 marked a major turning point for the high-tech industry. After a prolonged period of valuation declines, frozen fundraising rounds and market instability, companies are returning to growth and greater managerial maturity. Paradoxically, it is at this very stage that a critical obstacle is coming into focus: an unhealthy cap table.
Industry estimates suggest that roughly 30 to 40 percent of growth-stage companies are struggling with ownership structures that weigh them down and impede fundraising efforts, expansion plans and strategic transactions. In many cases, early investors who were once essential to the company’s formation gradually become shareholders who no longer provide strategic value, and at times even hinder fast, precise decision-making.
When early ownership becomes a growth bottleneck
In the early stages, founders do whatever it takes to get the company off the ground. They raise capital from every possible source: angels, small funds and personal networks -- and rightly so. But once a company reaches commercial maturity, achieves meaningful growth, generates double-digit revenues and positions itself in global markets, it requires shareholders who bring real strategic value.
Instead, some early investors continue to exert influence well into later stages, often without the capability, mandate or genuine alignment with the strategic challenges of the growth phase. The problem is particularly acute because, in most cases, companies lack the financial or structural tools to execute a meaningful buyback of these holdings. As a result, the issue remains embedded in the cap table for years.
This is where secondary funds enter the picture. During 2025, they became one of the most significant forces in the capital markets. According to Jefferies’ secondary market review for the first half of 2025, total transaction volume reached $103 billion. Of that amount, $56 billion consisted of LP-led transactions, accounting for approximately 54 percent of the market.
Secondary funds step in
This data highlights a clear shift in the composition of sellers. More transactions are coming from early-stage funds, angels and LPs, and fewer from employees. The trend signals a growing need for liquidity among limited partners, alongside a major opportunity for companies seeking to clean up their cap tables.
The growth of the secondary market is driven by a powerful alignment of interests. Early investors who once relied on IPOs or rapid M&A exits to realize returns are now seeking alternative liquidity options. Secondary funds are able to provide them with an attractive exit, often at a meaningful gain relative to the original investment.
At the same time, companies benefit from a more focused and professional ownership structure, enabling management teams and boards to operate efficiently - without layers of ownership that no longer contribute to growth or long-term strategy.
For companies preparing for mergers and acquisitions or an IPO, this is not merely an operational improvement, but a prerequisite for success. Strategic acquirers and late-stage investors place significant weight on having a clean, stable cap table.
Market estimates suggest that more than half of funds and potential acquirers reduce their interest when they encounter ownership structures crowded with shareholders who are no longer aligned with the company’s stage of development, or whose influence does not reflect their strategic contribution. Cleaning up the cap table through secondary transactions can reduce risk, increase transparency and even improve a company’s perceived valuation by 5 to 10 percent.
Moran ChamsiPhoto: Merav Ben LoulouSecondary transactions are far more than a financial maneuver. They represent a strategic move that allows a company to transition from survival mode to accelerated growth. As 2026 brings about a market reawakening with new, large-scale opportunities, the ability to move quickly with a clean, well-structured ownership base becomes crucial.
For companies that aim to win, removing non-strategic ownership from the cap table is not a luxury - it is a foundational condition for growth, fundraising and success in global markets.
- Moran Chamsi is a managing partner at Amplefields Investments