Why Secondary Markets Are Eating the IPO | All-In Liquidity Secondary Markets Panel
Summary
Private-company secondaries have become a third exit market: 2025 volume is roughly double the 2021 peak, activity equals 31% of primary venture activity, and pricing swung from $0.80 on the dollar to $1.06. Brad Gerstner calls later-stage names “quasi-public companies,” with secondaries now competing against IPOs and acquisitions for distributions. The organized market nevertheless sits beside “wild west” SPVs charging 10% loads and double carry.
Employee liquidity is economically necessary when companies remain private for seven, 15 or even 24 years, but the panel sees that longer private life as a governance trade-off. Paper wealth of $10m or $30m does not buy a house, while founders may prefer avoiding the public-market microscope. Chamath Palihapitiya described private investors as often telling management what it wants to hear to preserve access, making a successful CEO “the most special flower.” His Facebook example supplied the cost: in 2010 he sought $1bn to build a phone, Zuckerberg backed Bret Taylor’s HTML5 strategy, Facebook went public a year later, and Chamath said “that year made all the difference.” Zuckerberg later said public-market pressure might have changed the decision.
Forge’s deal with Schwab is a wager that regulated infrastructure can turn private-company equity into a genuine retail asset class, combining Forge’s roughly 3m investors with Schwab’s 46m investors and $12tn. Kelly Rodriques said Forge’s 2018–19 SpaceX SPVs were permissioned and that Elon publicly discussed broad IPO distribution at the IPO price. Direct shares and SPVs still require accreditation, but products coming to market as interval funds could hold 60 companies including SpaceX and accept unaccredited investors at $500 minimums: “This is a real asset class.”
Democratization does not make entry price irrelevant: after two of the public market’s biggest months in a decade, Brad said he might put $30k of a fresh $100k to work today. He warned retail against double-fee SPVs, leverage and expecting a late SpaceX purchase to triple immediately; he cited 14 levered ETFs launching for its IPO day around a $1.75tn valuation as another sentiment signal. The goal is “durable democratization,” and “we may not be at the top, but we ain’t at the bottom.”
The new sell button is changing venture behavior as much as access: Brad is selling portions at four or five times cost for DPI, while Jason Calacanis now sells alongside founders once companies reach about $500m. Founders rarely welcome it, but Brad called partial sales a fiduciary duty. Gavin Baker sees the other side too: firms lacking exposure to trillion-dollar winners are protecting their franchises by writing speculative “call options” and “chasing” stories.
The panel rejected a 1999-style collapse analogy because Anthropic, OpenAI and SpaceX are real businesses, but it considered 2021-like valuation compression entirely plausible. Unlike CMGI—no revenue, a move from $2 to $2,000, a purchase of Foxboro Stadium, then failure—today’s leaders have substantial operations; that does not preclude a 10–20% semiconductor-index correction and 30–40% drawdowns in high-beta names. Technology remains a “jagged line up and to the right,” provided investors have staying power.
Below the marquee names, the panel’s ideas concentrated on agent software, modern financial infrastructure, AI networking, robotics and autonomous delivery. Picks included Sierra and Parloa, Revolut, Arrcus and DriveNets, Neura Robotics, Vast and Zipline; the recurring thesis was rebuilding legacy stacks or supplying the specialized infrastructure around AI. Gavin’s networking formulation was “the right chip for the right job at the right time,” while Jason called drone delivery “Uber 2.0.”
Deep dive
1. Secondaries are now venture capital’s third exit market
Brad’s opening data made secondaries look less like an exception than a third exit route: after roughly five years in which venture inflows exceeded distributions, 2025 volume was about twice the 2021 peak, and he put secondary activity at 31% of primary venture activity. Pricing moved from roughly $0.80 per dollar to $1.06, turning a liquidity discount into a premium.
His “quasi-public companies”—later-stage names such as Anduril, Anthropic and SpaceX—now trade continually, while secondaries compete with IPOs and acquisitions as a source of DPI. Gavin’s employee case was direct: people can be “very wealthy on paper but actually cash poor,” unable to buy a home after seven, nine or even 15 years at one company.
The pushback concerned execution. Some SPVs charge 10% loading fees plus double carry, while selling still resembles “ticket brokers”: a CFO calls several intermediaries, receives incomparable bids and negotiates with an unhappy founder. Kelly said Forge spent three years building exchange-like infrastructure through which companies and funds could formally offer liquidity.
2. Staying private buys freedom but weakens pressure-testing
Gavin’s categorical view was, “I don’t think there is actually a good reason to stay private longer.” Founders perceive private life as easier, freer and more compatible with long-term thinking, but the panel argued that freedom can shelter consequential mistakes from independent scrutiny.
Chamath supplied the concrete miss. In 2010 he asked Mark Zuckerberg for $1bn to build a Facebook phone while Android and iPhone were still emerging; Zuckerberg instead backed Bret Taylor’s HTML5 strategy. Facebook went public a year later, but Chamath said “that year made all the difference,” and Zuckerberg later said rigorous questioning from public investors might have changed the decision sooner.
Gavin’s mechanism: private investors continually sell themselves to management because they want access to the next round, making a successful CEO “the most special flower” on every board member’s list. Public investors can buy or sell without permission and therefore speak more freely. Jason’s summary was blunt: “The sycophantic nature of private markets is real,” with Elon Musk offered as the rare CEO who actively seeks negative feedback.
Kelly’s red-team case was occupational rather than philosophical: public-company leadership was “much less fun” because a visionary, product-first CEO becomes primarily an investment manager. Abundant private capital lets founders delay that transition—SpaceX had remained private for 24 years—provided employees and early investors receive orderly liquidity.
3. Retail access is becoming infrastructure, not a gray-market workaround
Kelly framed Schwab’s deal with Forge as recognition that private-company equity is “a real asset class,” not merely an occasional secondary trade. Forge brings a platform with roughly 3m investors; Schwab brings 46m investors and $12tn, creating a distribution channel that could follow a company from private rounds into its public listing.
His proof point was SpaceX: Forge obtained permissioned SPVs in 2018 and 2019, then pitched demand from 30m retail investors seeking roughly $50,000 allocations. As an IPO approached, Elon publicly discussed broad-based distribution at the IPO price, and Schwab received an allocation. Jason—not Gavin—called democratized ownership an effective pitch because founders understand “the power of equity.”
Today, individual shares and SPVs remain limited to accredited investors. Kelly nevertheless described interval funds coming to market that could hold 60 companies, including SpaceX, and admit unaccredited investors at $500 minimums. The panel distinguished those from closed-end funds whose prices can become wagers on FOMO, bearing little relationship to the underlying shares.
Tokenization could eventually make fund interests easier to trade, but Kelly questioned whether LPs really want to sell an entire fund when they mainly want liquidity from its winner. The nearer application is clearing 15-year-old vehicles with two remaining companies. Brad’s guardrail was equally important: access must build trust among Americans who otherwise see private wealth creation as “a scam where they’re left out.”
4. The sell button is reshaping venture returns and fund behavior
Brad confirmed his funds are selling into demand: if a seven- or eight-year-old position can realize four or five times cost, LPs want the DPI. A planned 30% sale is always discussed with the founder and “they never like it,” but his fiduciary obligation wins. Jason now sells pari passu once investments made at $10m–$20m valuations reach roughly $500m, recycling proceeds into the next founder.
Jason asked how mean and median venture returns would look. Gavin focused on the selection effect: firms without material exposure to trillion-dollar winners may have poor returns and no DPI, though he exempted great Series A firms whose returns and DPI can still be strong. He already sees some firms behaving in “strange ways,” writing speculative “call options”—including Neolabs—to create a story and chasing exposure. Managers holding the winners can afford greater discipline.
His second-order flow call came from long-only mutual funds: SEC rules permit up to 15% in privates, but many firms self-cap at 3%, 5% or 7%, and Baillie Gifford was forced to sell SpaceX for regulatory reasons. Once an IPO lockup expires, the holding leaves that private bucket, freeing hundreds of billions for new late-stage demand. “There’s a lot of dry powder,” leaving founders in the catbird seat.
5. Full valuations shift the edge below the marquee names
Brad said technology is “pretty fully valued” after parabolic gains, although that does not mean markets cannot rise further. He might invest only $30k of a fresh $100k now, preserving capacity for a drawdown. Fourteen levered ETFs launching for SpaceX’s IPO day around a $1.75tn valuation reinforced his warning that late buyers often lever up precisely when excitement peaks.
The better historical comparison was 2021, not 1999. Gavin described the dot-com market as “Vegas on a Friday night after way too many drugs”: CMGI had no revenue, rose from $2 to $2,000, bought Foxboro Stadium and went out of business two years later. Today’s leaders are real, but a routine 10–20% semiconductor-index consolidation could still pull high-beta names down 30–40%.
Below those leaders, Gavin chose Sierra, with Parloa as a European analogue: agent-native sales and service layers could become strategic acquisitions, but OpenAI or Anthropic entering could “eviscerate” hundreds of millions in revenue. Kelly chose Revolut’s modern regulated-bank stack and Neura Robotics, a quiet German AI-powered logistics-robotics company with $100m in revenue. Gavin also cited Arrcus and DriveNets for the networking supercycle.
Jason backed Vast, a space-station builder he said he thought would win. His Zipline story was a correction of an earlier mistake: he passed at seed because the geography and hardware were outside his remit, then invested later after Keller said, “I figured it out.” Gavin said seven years delivering blood and refrigerated medicine in Africa supplied real-world autonomy data and cut maternal mortality 90–95% in some countries. Jason called the delivery thesis “Uber 2.0”: costs could fall from $15 to $5 and eventually $2, with a hovering drone lowering a tether rather than landing.