The majority of private technology companies are shifting away from IPOs and plan on running a secondary share sale within the next twelve months, according to new research from Ledgy.

In its State of Equity 2025 report, the equity management platform revealed that 78% of businesses are either very likely or somewhat likely to sell secondaries – existing shares owned by investors, founders and employees – over the next year, with 83% of employees reporting they would like to participate in a secondary sale.

Despite their enthusiasm, employees planning to take part in secondary sales need to gain knowledge about them first, as half (50%) said they do not understand what a secondary share sale is, meaning they might not fully appreciate the benefits and pitfalls of taking part.

The report, based on a survey of over 2,500 respondents from private tech firms across the UK, Europe and the US, found that secondary share sales are emerging as a critical liquidity mechanism, offering founders, employees, and early investors opportunities to cash out without an IPO.

However, according to Ledgy’s survey, IPO plans are gaining traction overall, with more than half of technology businesses (55%) more likely to consider an IPO now compared to 2024.

The report claims that as market conditions improve, the use of secondaries could stall tech firms from being able to progress to an IPO as quickly as they might hope, with Ledgy claiming this could mean little increase in IPO numbers over 2025.

“Secondaries are reshaping how companies think about liquidity, especially in Europe where IPO pathways are evolving,” said Yoko Spirig, co-founder and CEO of Ledgy. 

“For all stakeholder groups to truly benefit from secondaries, companies must take education more seriously given the current level of understanding.”

The report also sheds light on the increasing importance of equity as a key driver for recruitment and retention. 

A quarter of tech workers (25%) said that they would only apply to roles which offered equity, while 79% said that owning equity in their business gives them more motivation at work.

The report found that equity retention is strongest among senior roles, with 72% of C-suite executives reporting they were more likely to stay with their employer when offered increased equity stakes.

According to the survey, European companies in general have reported an increase in equity ownership, with Germany seeing a 73% positive change, the Netherlands seeing a 59% positive change, and the UK seeing a 15% positive change. 

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The data shows that 82% of employees now own equity in their firm, a significant increase on the 62% reporting the same thing last year, and over half (58%) think that their company’s current equity plan will become more generous, rising from 42% in 2024.

“Equity is a critical component of employee engagement and long-term value creation, and European companies recognise this,” continued Spirig.

“While equity in Europe and especially in distributed teams is more difficult due to the fragmented markets, taxes and regulation – many of the same reasons blamed for the lag in European tech – the increase in its distribution shows that these are not a deterrent for the teams on the ground.”