The Real All-In Cost of a Secondary Transaction

Last reviewed on 27 April 2026

Most secondary deals advertise a single platform fee — say, "5% buyer-side commission." That number is real, but it is only one line in a list of charges that determines whether the trade is actually attractive. Aggregate the lifetime cost of ownership and the implied break-even moves materially.

This page breaks down every cost a secondary purchaser actually incurs, then walks through a worked comparison across three common deal structures. It is a companion to our platform comparison (which lists per-platform headline fees) and our SPVs vs forward contracts page (which covers how the wrapper changes the cost stack).

Where Costs Actually Land

A secondary transaction touches eight cost categories. Some appear on the closing statement, some are baked into the price, and some only become visible at tax time or at exit.

1. Platform Commission

The most visible fee. Charged by the platform on the gross transaction value. Typical ranges:

• Buyer-side commission: 3% to 5% of gross deal value, sometimes higher on smaller tickets.
• Seller-side commission: 3% to 5%, often borne by the seller and not visible on the buyer's statement, but still embedded in the price.
• Combined commission: Some platforms publish a single "all-in" rate of 5% to 7% covering both sides.

Watch the basis. A platform quoting "5% commission" on the net proceeds vs the gross share price is materially different. Read the closing-statement template before agreeing.

2. SPV Setup and Administration

If the deal is structured through an SPV (typical on EquityZen, AngelList, and many smaller platforms), additional costs apply:

• Setup fee: 1% to 3% of capital committed, paid at the formation of the SPV. Covers entity formation, legal documentation, and onboarding.
• Annual administration fee: 0.5% to 1% per year, covering K-1 preparation, fund accounting, and Delaware franchise tax.
• Carried interest: 10% to 25% of gains above invested capital. Sometimes structured with a hurdle (no carry until a certain return), sometimes not. The single biggest fee on a successful exit.

SPV economics compound. A 3% setup fee on day one plus 1% annual admin for five years plus 20% carry on a 3× return adds up to roughly 12–14% of total proceeds going to the sponsor.

3. Transfer Agent and Cap-Table Fees

When shares move on the company's cap table, a transfer agent (Carta, Shareworks, AST, Computershare, or the company's internal team) typically charges a per-transfer fee:

• $50 to $500 per transfer for small companies.
• Some larger private companies charge $1,000 to $5,000 per secondary transfer to discourage them.
• Issuance of new share certificates (or electronic equivalents) sometimes incurs an additional fee.

For SPV structures the SPV is the named holder, so the per-transfer fee is paid once at SPV formation rather than per investor. Direct-purchase deals incur the fee per investor, which can be material on small tickets.

4. Escrow and Settlement

Funds typically sit in escrow during the closing window:

• Escrow agent fees: $250 to $1,500 per closing, sometimes a percentage of value capped at a maximum.
• Wire fees on inbound and outbound transfers: $25 to $50 per wire.
• Float: cash sits in non-interest-bearing escrow for 14–60 days. The opportunity cost on a $100,000 wire at 5% money-market rates over 30 days is roughly $400.

5. Legal Review

Some platforms include legal review in the platform fee. Many do not. Buyer-paid legal review of subscription documents typically costs:

• $500 to $2,500 for a standard SPV subscription review.
• $2,500 to $10,000+ for a direct-purchase deal where the buyer wants the share-purchase agreement reviewed against the company's charter.
• Higher on forward contracts because the document set is non-standard.

Sophisticated buyers always have counsel review at least once. Skipping legal review is a false economy on positions above $25,000.

6. Tax Preparation

Different deal structures generate different tax documents and different preparation costs:

• Direct ownership: 1099-B at sale. Marginal CPA cost.
• SPV ownership: Schedule K-1 every year the SPV is open, plus a final K-1 at wind-down. Each K-1 typically adds $150 to $500 to a tax return. Multi-state K-1s (when the SPV invests in companies that allocate income across states) add more.
• Forward contracts: Often non-standard reporting. Some are 1099-B, some are 1099-MISC, some require manual reporting. Expect $500 to $1,000 of additional CPA time on the year of settlement.

Spread over a five-year SPV hold, K-1 prep alone often runs $1,000 to $2,500 in cumulative CPA fees on a single position.

7. State and Foreign Taxes Created by the Wrapper

An SPV that holds stock of a Delaware C-corp issuing stock to a Delaware-resident SPV with members in California, New York, Texas, and Florida creates a four-state tax allocation problem at exit. Each state may have its own filing requirement for the SPV's members. Depending on state rules:

• Delaware franchise tax on the SPV (typically $300/year minimum).
• State source-income allocation on capital gains — California claims source-state taxation on stock issued by California-headquartered companies regardless of holder residency in some interpretations.
• Foreign-investor withholding under FIRPTA and FATCA where non-US members are involved.

Direct ownership avoids the SPV-level allocation but creates cleaner sourcing rules — the gain is allocated based on the holder's state of residence at sale.

8. Currency Conversion (When Applicable)

For non-US buyers, FX conversion costs sit on top of everything else:

• Bank wire FX spread: typically 1% to 3% above mid-market.
• Multi-currency platforms (Wise, Revolut Business): typically 0.4% to 0.6% above mid-market.
• Round trip — converting in to USD and back at exit — doubles the cost.

A non-US buyer using bank-grade FX on a $100,000 ticket loses roughly $2,000 to $5,000 to currency on entry and a similar amount on exit. Multi-currency cards or specialty FX brokers cut this materially.

The Opportunity Cost of Capital

Funds wired into escrow are not earning a return. Funds in an SPV that has not yet closed on the underlying purchase are similarly idle. Funds locked through a 5–7 year holding period in private stock are not deployable into other opportunities. None of this shows up on the closing statement, but the implied opportunity cost is real:

• 30 days of escrow float on $100,000 at 5% short-term rate ≈ $400.
• 5 years of locked capital on $100,000 vs a 7% diversified-portfolio expected return ≈ $40,000 of opportunity cost (compounded). The investment must beat that bar before it has earned anything.

This is why "I made 2× over five years" can be a much weaker outcome than it appears. A 2× over five years is a 14.9% annualised return — meaningful, but only ~5–7 percentage points above broad-market alternatives, and well below early-stage venture benchmarks.

A Worked Comparison: $50,000 Through Three Structures

Imagine three buyers each paying $50,000 to acquire roughly the same economic exposure to the same private company. The company exits in 5 years at 3× the entry valuation. Compare what each ends up with.

Structure 1: Direct Purchase (Hiive-style)

• Buyer-side commission: 5% × $50,000 = $2,500. Net invested in shares: $47,500.
• Transfer agent fee: $250 (paid by buyer).
• Legal review (optional): $1,000.
• Escrow / wire fees: $100.
• Total cost to acquire: $50,000 paid + $1,350 in side costs = $51,350.
• Effective cost basis: $47,500 in shares.
• Exit at 3× entry: shares sold for $142,500.
• Settlement and platform fees on exit (assume 3%): $4,275.
• Net proceeds: $138,225.
• 1099-B at exit. Tax-prep marginal cost: minimal, no K-1s.
• Net result: $138,225 / $51,350 = 2.69× over 5 years (22% IRR before tax).

Structure 2: SPV (EquityZen-style)

• Setup fee: 2% × $50,000 = $1,000. Net invested in shares: $49,000 (sometimes setup is on top of the subscription, sometimes deducted; assume deducted here).
• Annual admin: 0.75% × $50,000 × 5 years = $1,875 (paid out of distributions or via separate billing).
• Carry: 20% of gains. Gross gain on $49,000 invested at 3× entry valuation = roughly 3 × $49,000 − $49,000 = $98,000. Carry = 20% × $98,000 = $19,600. Net to investor before other costs: $49,000 + $98,000 − $19,600 = $127,400.
• K-1 tax-prep additional cost: 5 × $200 = $1,000.
• State allocation tax-prep complications: assume $500.
• Total side costs: $1,000 setup + $1,875 admin + $1,000 K-1s + $500 state = $4,375.
• Net proceeds: $127,400.
• Net result: $127,400 / ($50,000 + $4,375) = 2.34× over 5 years (18.5% IRR before tax).

Structure 3: Forward Contract

• Buyer pays $50,000 at signing for the right to defined proceeds at exit.
• Spread baked into the per-share price: assume 4%, so buyer effectively gets exposure equivalent to $48,000 of shares.
• Platform fee on settlement: 2% × gross proceeds. Assume gross at 3× = $144,000. Fee = $2,880.
• Forward-contract legal review pre-signing: $2,000.
• Settlement-time tax classification ambiguity: assume $700 of CPA time.
• Counterparty / FX / wire incidentals: $250.
• Total side costs: $2,880 + $2,000 + $700 + $250 = $5,830.
• Gross to buyer: $144,000.
• Net proceeds: $138,170.
• Net result: $138,170 / ($50,000 + $5,830) = 2.47× over 5 years (19.8% IRR before tax).

Side-by-Side Summary

Same underlying exposure, same exit, same multiple. The structure choice produces a 3.5 percentage-point spread in IRR. On a $50,000 ticket the gap is small in dollars; on a $500,000 ticket it is $50,000–$60,000 of foregone return.

Costs People Forget to Model

• Tax friction at exit. Direct ownership produces clean long-term capital gains if held more than a year. SPV holding-period tacking is fine, but K-1 income may have ordinary-character components in some structures. Forwards have inconsistent tax treatment that occasionally produces ordinary-income classification on what looks economically like capital gain. The tax-rate gap between long-term capital gain (20% federal max + 3.8% NIIT) and ordinary income (37% federal max) is enormous.
• Sponsor performance risk. An SPV manager who fails to file K-1s on time exposes investors to penalty interest and CPA-fee overruns that the SPV does not cover.
• Idle-capital costs during long pre-IPO holds. Locking up $250,000 for seven years has an opportunity cost of $100,000+ in foregone broad-market returns — a hurdle rate the private investment must beat before it has produced anything.
• Loss tax inefficiency. Capital losses on SPV interests are sometimes recharacterised; founder/employee equity might offset gains while SPV interests might not, depending on how the SPV is structured.

How to Reduce All-In Cost

1. Prefer direct ownership when available — fewer intermediaries, lower carry, cleaner tax. Often requires higher minimums.
2. Negotiate carry and fees on large tickets. SPV sponsors will frequently reduce carry from 20% to 10–15% on subscriptions above defined thresholds. Always ask.
3. Cluster purchases with the same sponsor. Repeat-investor discounts on setup fees and admin costs are common.
4. Use specialty FX providers rather than retail bank wires for non-US tickets. Save 1–2% on every conversion.
5. Audit closing statements line-by-line before signing. Errors and unexplained charges are not unusual on a first deal with a new platform.
6. Avoid forward contracts for tickets below $25,000 — the legal-review and tax-classification overhead is a much larger percentage of return.

For deeper context on each structure, the how-to-buy guide covers the procedural steps, and the due-diligence checklist covers the questions to ask before committing.

Bottom Line

The fee a platform quotes is the start of the conversation, not the end. A meaningful pre-IPO position can absorb 8–15% of total return in fees, taxes, and friction by the time you exit — and the bulk of that friction is structural (carry, K-1 prep, state allocations) rather than visible at signing. Build a clean accounting of all-in cost before you commit. The investments you walk away from after running the numbers will save you more money than the ones you accept.