So you raised the round. Now what?

After closing a funding round, many Web3 founders anticipate a smooth ride, only to discover that the real work is just beginning. Challenges such as burn rate, talent retention, investor sentiment, and regulatory uncertainty make the post-funding phase unexpectedly complex.

Yet, monetizing equity is rarely straightforward. Running a startup is demanding, and founders often lack the time to navigate equity management. Some also worry that selling equity may reflect poorly on their commitment. With the right partner and structure, liquidity can be accessed without compromising long-term alignment.

Capital without exit

Secondary markets offer liquidity without requiring a formal exit. Structured liquidity programs let founders raise capital in a controlled manner, reducing token sell pressure and helping stabilise spot prices. These programs also help navigate vesting schedules, tax issues, and compliance, without distracting from growth. 

Moreover, the secondary market enables discreet access to capital via sophisticated investor networks such as VCs, private equity firms, family offices, and high-net-worth individuals. These deals are typically executed confidentially minimizing market sentiment disruption.

Landing top talent

In Web3, attracting great talent requires more than tokens and vision, especially when liquidity is years away. Founders often face a catch-22: they need key hires early but can’t always offer a near-term financial update. The secondary market helps solve this by turning future token value into present-day motivation.

Contributor Token Incentive Plans (CTIPs) and flexible liquidity programs allow early access to tokens, even pre-vesting. This boosts morale and alignment while giving team members a real reason to stay. In competitive hiring environments, offering a pathway to short-term liquidity could be the factor that wins top candidates.

Tapping into broader investor networks

Beyond liquidity, the secondary market provides access to engaged investors. Many VCs and institutions use secondaries to deepen positions in high-conviction projects. For founders raising additional capital or seeking resilience during downturns, this is invaluable.

To illustrate: in 2024, Web3 start-ups raised roughly 11.5 billion, per Galaxy Research. Offering clear, accessible exit strategies makes your project more appealing to risk-conscious investors. Establishing clear and accessible exit strategies for investors can also play a major role in attracting new backers. Sophisticated investors tend to be risk-averse, and knowing they can access their capital more readily reduces the perceived risk of committing to long, illiquid positions. This is where the right secondary market partner makes a difference, helping structure exit options in a compliant and discreet way that gives investors confidence to engage.

This also brings in previously hesitant investors like HNWIs, smaller funds, and institutions with shorter investment horizons. Structured liquidity sends a clear message: your project is credible, transparent, and built for the long haul.

Making regulation work for you

Regulation might not top your list after a raise, but neglecting it can cause setbacks. Once you’re managing equity, tokens, or investor funds, compliance becomes non-negotiable.

Staying ahead of Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements helps protect your project legally and reputationally. Properly vetting investors isn’t just best practice, it’s a must.

Beyond AML and KYC compliance, data protection and privacy are other regulatory issues to consider. Equity sales may involve personal information, requiring compliance with the General Data Protection Regulation (GDPR) in the European Union (EU) and the California Consumer Privacy Act (CCPA).

There is also a plethora of securities laws that founders need to be aware of. In the past, the classification of certain Web3 assets as securities has caused problems for firms operating in the digital assets space. One example here is the DAO,  decentralized venture capital fund that experienced a setback in 2016 when a critical vulnerability was exploited. This setback triggered regulatory scrutiny from agencies such as the US Securities and Exchange Commission (SEC), which determined that The DAO’s tokens were subject to securities regulations in the US.

New frameworks like the EU’s Markets in Crypto-Assets Regulation (MiCA) are reshaping compliance expectations. Staying informed and adapting to these changes is key, but it can be challenging to navigate alone. Founders need expert partners to stay ahead of these changes, mitigate legal risk, and ensure their strategies align with evolving standards so they can approach the secondary market with clarity and confidence.

Why act now

If you haven’t explored the secondary market yet, you’re leaving options on the table. Over $100 billion has entered Web3 through VCs, hedge funds, and private investors, and much of it seeking flexible deployment.

This isn’t about giving up control. It’s about unlocking capital, staying liquid, and continuing to build thought market cycles. The right secondary market partner can help you create a structure that works for you, not against you.

The tools are out there. Use them. Stay liquid. Keep building.

Need help thinking it through? Reach out at [email protected].