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Good morning 👋
We’ve written a lot about secondaries lately - to the point where we’re asking ourselves:
Are we thinking about this the right way?
Luckily, Yoni from Slow wrote a piece that challenges some of our initial assumptions and made us start looking at some things differently.
Here’s what he thinks is missing from a lot of the secondaries discussion …
TOP
Getting in vs. getting out
Yoni is one of the sharper venture minds I know, and you should start reading 99% Desirable if you don’t already.
We’ve been pretty vocal about the need for secondaries and other liquidity options in venture for a while. The cat is out of the bag, venture math is reliant on asset bubbles, that math breaks during downturns, and we’ve written about the need for secondaries here, here, and here.
We still believe secondaries will play a larger and larger part of the venture cycle (especially for seed funds), but we failed to consider two things:
Good assets are bought (not sold)
Venture liquidity exists, just not at the price venture investors want
Yoni and Slow have thought about this, and he wrote about it more last week.
Here is the direct text from Yoni’s piece:
There’s lots of discussions about the “liquidity crisis” in venture with different ideas for how to solve it. The importance and potential variability of secondary has at this point become a meme: continuity vehicles, secondary brokers, strip sales, illiquid stock distributions, etc.
A common theme here is that there’s “no liquidity for my assets” which leads to a lot of handwringing around structural / transactional / mechanical solutions to the liquidity “problem.”
But as my partner Will puts it, there's plenty of liquidity, just not at the price you want.
The issue isn’t that there’s no liquidity for quality assets; it’s that most of the assets are low quality. This is THE defining feature of venture and startups. No one should be surprised!
Obviously lots of money has been lost blowing great opportunities to sell. Obviously selling well and having the discipline to do it matters. And obviously secondary will be more important for seed funds as the time to exit gets longer.
But selling is obviously downstream of having anything saleable/worth owning in the first place. It’s just more comfortable to talk about the challenges of selling than the challenges of having nothing anyone wants to buy.
So rather than obsessing on how to get out of assets, focus on the hard part: getting in. If you actually have an asset worth owning, getting out won’t be hard and parting with it will be.
This should not be an interesting point (maybe it isn’t) but I think it has to be said. Venture capitalists’ agita and anxiety about their careers and the markets is getting funneled into intense selling and secondary pressures. None of this ultimately helps founders build businesses. It’s all just zero sum trading.
Read more:
Praise Our Lord For Secondary Markets - Hunter Walk
Secondaries will not save VC - Random Walk
Unlocking liquidity in VC the old fashioned way - Will Quist x Random Walk
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LINKS
📆 Vesting Schedules Should Be Longer: 99% Derisible makes the case of 6-8+ year vesting schedules for founders and founding employees
👨🏼💼 The Great Legacy Extinction—AI’s $20T Takeover of Professional Services: A new wave of AI-native professional service firms is emerging, promising to redefine what professional services can be
👀 Tech Trends I Observed in Q12025: After screening 1,600 companies and having 100+ founder conversations last quarter, here are the ten trends seen at the earliest stages of company formation
♟️ Investor Relations as a Strategic Weapon: Mostly Metrics does a deep dive into what it means to run a world-class investor relations function that can be used as a strategic weapon to drive your valuation
🔟 Top 10 Takeaways from the Data-Driven VC Landscape 2025: This is the TL;DR version of the report
✍️ What Are LPs Actually Buying: Ryan Hoover shares his reasons for writing checks (p.s. making money is #4 on the list)
HEADLINES
Redpoint raises $650M 3 years after its last big early-stage fund (TechCrunch)
8 venture-backed IPO candidates to watch in 2025 (Pitchbook)
Venture capital is stalling at seed (Axios)
New York-focused VC Work-Bench has raised a fresh $160M (TechCrunch)
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- Clay
(Founder @ Confluence.VC | GP @ Outlaw)
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