Glen Anderson, a veteran in private company share trading since 2010, observes a massive increase in institutional investors in the late-stage private market, from a handful to thousands.
From his vantage point as president of Rainmaker Securities, which specializes in private securities and handles transactions for about 1,000 stocks, Anderson is witnessing a critical period in the secondary market, highlighting Anthropic, OpenAI, and SpaceX as key players.
However, the actual situation is more intricate than what news reports indicate.
Anderson’s assessment of Anthropic aligns with recent Bloomberg reports, indicating an overwhelming demand for its shares. Ken Smythe of Next Round Capital mentioned that buyers are prepared to invest $2 billion into Anthropic, while $600 million worth of OpenAI shares remain unsold.
Rainmaker Securities is experiencing a similar trend, with Anderson noting, “Anthropic is the most difficult stock to find in our market because there are no sellers.”
Anderson attributes some of this heightened demand to Anthropic’s highly publicized conflict with the Department of Defense, an event that, despite initial negative perceptions, ultimately benefited the company.
He explained, “The application’s popularity surged, and the company was perceived as a hero for challenging the government, which I believe enhanced its narrative and further distinguished it from OpenAI.”
This differentiation is growing in importance for investors in a market that historically favored investing broadly. While many institutions still seek exposure to both Anthropic and OpenAI, with the ultimate winner uncertain, the secondary market momentum has undeniably shifted.
This doesn’t imply a total collapse for OpenAI, as Anderson cautions against a simplistic either/or interpretation.
He clarified, “It’s not a situation where you choose one over the other exclusively.”
However, the enthusiasm is noticeably absent. He conceded, “The market for it is currently not as dynamic as that for Anthropic.”
Regarding valuation, Anderson generally corroborated Bloomberg’s report that OpenAI’s secondary market shares reflect a $765 billion valuation, a significant reduction from its recent $852 billion primary-round valuation. He noted he was speaking from memory but felt the Bloomberg figure was accurate.
OpenAI has actively sought to gain greater oversight of its secondary market shares. An OpenAI representative advised Bloomberg that “caution should be exercised regarding any firm claiming access to OpenAI equity, including via an SPV,” explaining that the company has set up official, fee-free banking channels to counter broker models with high charges.
Significantly, at present, banks like Morgan Stanley and Goldman Sachs are reportedly providing OpenAI shares to wealthy clients without charging carry fees. In contrast, Goldman Sachs applies its standard carry fee, typically 15% to 20% of profits, for clients interested in Anthropic.
However, this analysis overlooks SpaceX, which remains distinct despite changing market perceptions of other major companies. Anderson highlights SpaceX as one of Rainmaker’s unique entities that avoided the severe market correction seen by many private companies from 2022 to 2024, during which share values frequently dropped by 60% to 70% after rapid initial increases.
The aerospace giant has consistently shown upward growth, according to Anderson.
Anderson, whose financial interests align with praising SpaceX and its initial investors, commends the company’s management for its prudent pricing strategy, avoiding the maximization of every funding round or tender offer.
He noted, “Many companies are tempted to set the highest possible stock price in each funding round, which unfortunately eliminates any margin for error.”
In contrast, SpaceX adopted a conservative approach, “avoiding excessive greed,” which resulted in substantial returns for early investors. Anderson remarked, “Consider the immense profit an investor from 2015 would be enjoying today.”
To elaborate, in 2015, SpaceX was valued at approximately $12 billion following a $1 billion joint investment from Google and Fidelity. An investor from that period would now have over a 100x return, as the company’s valuation exceeds $1 trillion in anticipation of its IPO.
The IPO appears to be fast approaching. SpaceX confidentially filed for its initial public offering this week, potentially preparing for one of history’s largest market debuts. Elon Musk reportedly seeks to raise $50 billion to $75 billion, possibly by June. Only Saudi Aramco’s 2019 IPO, which valued the energy company at $1.7 trillion, rivals this scale.
Predictably, Anderson reports that the rumored IPO filing has already altered the secondary market dynamics for SpaceX shares.
He observed a surge of interest today, with many investors inquiring about acquiring SpaceX shares, indicating a “very active buy side.” However, supply is diminishing; as a company nears its IPO, current shareholders have less motivation to sell, anticipating future liquidity.
This scenario creates more uncertainty for OpenAI and Anthropic, both of which are reportedly considering public offerings and hinting at moves this year. By filing first, SpaceX is poised to significantly gauge market interest, and Anderson believes subsequent filers will face a disadvantage.
He stated plainly, “SpaceX will absorb considerable liquidity. There’s a finite amount of capital designated for IPOs.” The initial filer captures the majority; subsequent companies will encounter increased scrutiny and potentially reduced investment.
This pattern is common across various sectors, and even AI companies, despite their current prominence, are not entirely exempt. An early IPO tests market receptiveness, while waiting for others may mean the most substantial investments have already been committed.
For more insights from our conversation with Anderson, tune into the upcoming Tuesday episode of the StrictlyVC Download podcast. Meanwhile, you can explore previous episodes featuring guests like Whoop CEO Will Ahmed and investor Bill Gurley.