Secondaries in venture

"In the early days, it was the pure wild west when we started. My first transaction was in Q4 of 2009, where I helped someone at Facebook with their liquidity problem. They were leaving. They had options. They needed to exercise and pay these taxes. And that's when it clicked, that there were tons of people in Silicon Valley and the world at large that had this exact problem."

"The cool part about being at Citizen was that we helped write the SEC regulation called the Citizen VC Rule in 2015, which clarified how private placements could work with an online platform. So we pivoted, me and my partners that were there, into institutionalizing this asset class instead of trying to democratize it."

"A billion and half of AUM, we have 2.2X average net DPI with an under four year hold period versus the industry VC average of around 13 years. Our track record is north of 18 IPOs, so 19 if you count Klarna, and six strategic sales…. what enables this is our integrated platform."

"Your average time to IPO in 2000 was three years old. Those were your Googles, your eBays, your Amazon. In 2021, that jumped to about 13 years…. Klarna, it just went public, that was a 17 year old company. So my prediction and my thesis going forward is that the best companies are going to stay private for 20 years. They're no longer startups."

"Every major investment bank, whether it's Citi or JP Morgan or Morgan Stanley or UBS, they all have a desk for this…. OpenAI is in the middle of doing a $10 billion secondary right now…. So if you were one of these Wall Street banks, would you rather be in the billion dollar Klarna IPO business, or would you rather be in the $10 billion secondary business?"

"If you look at the early days of the secondary market, the Facebook, LinkedIn, Twitter days, they always traded at premiums. There were no discounts…. People paid any price for Uber and Airbnb five years ago. So it's always had this extreme momentum names versus everything else. And here's where we make money: everything else."

"RSUs, they're even trickier. They have this double trigger structure, time vesting plus liquidity event. So when companies begin using RSUs around year five with seven year expirations, by year 12, those RSUs are starting to expire. And even though the company is still likely years away from an IPO, they start to run into some real pressure."

"We talked about the $10 billion Databricks, but Stripe did a $6.5 billion structured round…. They waived their RSU second triggers, they used primary capital to buy back employee shares for tax bills, then they organized tender offers for the remaining equity. It's really becoming the playbook if you're a successful late stage startup."

"We only invested about 12% of the fund during that zero interest rate environment versus most deploying, I would say 40-ish percent based on the data that we have. The balance went to work in very late 22, but mostly 23 and 24, where we wrote our last check recently in 2025. And that discipline should drive significant outperformance versus our vintage."

"Secondary capital in IPOs jumped from essentially zero in the year 2000 to 17% in 24…. The average 2024 IPO had $60 million in secondary proceeds versus only 300,000 in 2000. So let me translate that: IPOs are becoming clearing houses for liquidity rather than primary capital raising events."