Investing Billions - E342: The Rise of Venture Secondaries

Episode Date: April 7, 2026

What if the real edge in venture isn’t picking the hottest companies, but structuring your portfolio, pacing capital, and building relationships in a way most investors never do? In this episode, I sit down with Jamie Melzer, Founder and Managing Partner of Altra Venture Partners, to break down how he built a firm focused on late-stage venture and secondaries at the height of market dislocation. We discuss why rising interest rates in 2022 created a rare entry point, how buying private tech companies at 40 to 80 percent discounts reshaped the opportunity set, and why transaction risk often matters more than company risk in secondary markets. Jamie explains his concentrated, power-law-driven portfolio strategy, how he sources deals in an opaque and relationship-driven ecosystem, and why access, not awareness, is the true barrier in private markets.

So you built Ultra on the heels of the private markets and the illiquity in 2022. Tell me about how you built your firm. Ultra Venture Partners invest in the next generation of category defining technology companies in the private markets. And we largely do so by providing liquidity to early stakeholders through something called secondary transactions. What preceded the opportunity in 2022 was 13 years of close to zero interest rates, followed by interest rates rising from near zero to five plus percent very quickly. in starting March of 2022. And while 5% is still low from like a historical standpoint, relative to what was priced in across asset classes at the time, this was hugely disruptive.

And so you saw public equities start to correct very quickly, especially the high growth public tech stocks that had been pricing in, you know, close to 0% discount rates and crazy valuations because of that. The NASDAQ was down like 33% that year at the low. The S&P was down 25%. Credit markets, which are directly linked to interest rates, adjusted very quickly. Late stage venture where we sit is a very illiquid, illiquid and inefficient asset class and really needs a prolonged period of fear and pain for valuations to capitulate. And so for most of 2022, valuations were still very high. There weren't really new rounds getting done. Most of the companies had raised and did not need to raise new capital.

We actually didn't see the bottom in venture until mid-20203 when it was off about 50% from the 2021 highs. But over the period of 2022, I was kind of looking at this market and saw a really interesting opportunity emerging where you had some of the best private tech companies in the world still in the private markets. They didn't need to raise new capital. So how do you take advantage of a market cycle and invest in some of these incredible companies at sometimes hugely discounted or, you know, attractive valuations? There was a lot of fear. A lot of the buyers had come out of this market. There weren't that many to begin with. And so we came in and were buying some really incredible companies at like 40 to 80 percent discounts from where they were trading previously.

In March 2022, interest rates went from zero to five over a short period of time. Everything just plummeted down in valuation. We basically looking for the baby in the bathwater in that there were some good assets that were dragged down with the badasses. To be fair, valuations, I think, did need to reset across the board. But we went from a period where valuations were pretty lofty. Multiple were very high. Obviously, there were very low discount rates kind of being implied in those valuations

to great companies that were still growing. A lot were generating free cash flow, you know, growing 50, percent year over year, and all of a sudden, valuations looked very reasonable, like, very attractive relative to historical norms, relative to public markets. So there was just a lot of opportunities to kind of add to those types of companies. And did you raise in 2022, or were you already in the middle of funders? So I actually ended up spinning out and launching what is now ultra venture partners at the beginning of 2023. We made our first investment, I think, in June of that year. And the market bottomed in July of 2023. So the timing was good. Oftentimes there's

corrections in markets, and there's so many buying opportunities. But paradoxically, there's no supply of capital for new funds. How did you actually raise in such a market? That's a good question. So if you remember early 2023, it was kind of a delayed impact, but that's when the banks were flying up, right? Like SVB, when under Credit Suisse was acquired, I mean, there were a lot of pretty big failures in the banking system. So there was a lot of fear in the market in early 2023. I started my career in like a bank failure environment or shortly below or shortly before in the global financial crisis.

And so to me, this was actually a really exciting opportunity. But when we went out to raise from our investors who are largely high net worth individuals, and family offices, it was really hard. Like, I think we raised $6 million in the entire year for 2023. It has gotten much easier since then, but at the time where we were seeing the biggest opportunities was definitely the most challenging to raise new capital as a fundraiser. And helped you build this franchise starting in the most difficult possible market. It builds resilience.

I think, you know, going out and starting your new fund from scratch and kind of a new and nascent market as a, you know, first time fund manager, I think takes a little bit of resilience to begin with, but like I just saw such an enormous, almost once in a career, once or a lifetime type opportunity emerging here that I had to do it and I just stuck with it. I think about it as a bar belt strategy. Really bad markets are great for resilience and really good markets are good because it teaches you that works. It's like I pitched, I followed up and they invested, you know, needless to say it's 20, 21, it's the easiest market of all time. There's something there of like seeing success over and over. That's really helpful as well.

When you look at the secondary market, specifically in the venture asset class, why are so many people just buying portfolios, why won't anyone underwrite a single company? It's interesting that you say that. I actually feel like I see more people focused on the single company's single asset type acquisitions in the market where we're playing, which is very late stage venture. The portfolio acquisitions are a little bit more of like a private equity strategy where you can come in, provide liquidity to an LP is a very illiquid market. You have to underwrite the entire portfolio, the GP, you know, the exit profile of all

of these companies. You usually come in and buy these at a discount. You can market up right away or most people do market up right away. You know, and then you have to manage all of those out. So I think it's just a very different piece of the market. And there's a lot of big players and private equity-like players that are doing that. That's not where we're playing. We are heavily concentrated and have a goal of building positions in the best private tech companies in the world.

We have a fund that does this. We also do it on an individual basis through some of our co-investment opportunities, but are really targeting, like, building that concentrated portfolio of the companies that will kind of create the most value and generate those power law dynamics. Expert calls have always been one of the most powerful ways to build conviction. but today, investors are asked to cover more companies, move faster, and do it with leaner teams. With Alpha Sense AI-led expert calls, their TGIS call service team sources experts based on your research criteria and lets the AI interviewer get to work. The magic is in the AI interviewer,

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Take advantage of Alpha Sense AI-led expert calls now. The first to see wins. The rest follow. Learn more at Alpha-sense.com slash how I invest. Double click on that. Tell me about your strategy today. The underlying goal is to continue to build positions and the companies that we think will create the most value in the late stage private markets.

And we're very flexible. So I say it's opportunistic in terms of how we do this. So this is not traditional venture capital. Like where we're playing late stage venture and secondaries are really their own asset class and their own set of players that are emerging. And we invest kind of across a broad variety of transactions. So we can come in as a minority investor in primary rounds. We can help full pro rata for early stage funds in, you know, later stage rounds. We do a lot of secondary transactions.

So we can do direct secondaries where we come in and provide liquidity to early investors. So early funds, it could be angel investors. It could be, you know, executives or early employees of the company. We come into company-led tenders and we can team up with other funds and do like large transactions. We're like maybe we can't do a 300 million dollar transaction, but we can team up with one or two other large funds to do like a large secondary block in the market. So we're very flexible, we're very collaborative. We've also done like equity swaps with, you know, company executives where they actually become an LP in our funds. In return for shares.

Yes. So they would like swap in shares of the company and then they get some tax-efficient structure? Why would someone do that? It can be. It depends how you structure it. it becomes a little bit more complicated. Like when we've done it, we've basically paid cash for the tax component and just let them crystallize it at that point in time and then they swap in the rest of the equity. And then they get exposure to a diversified portfolio of like another. It's like these exchange traded funds in the public markets, but you've taken into a private market. And it's very unique to our strategy.

I don't know if we created it. When I mention it, people are often surprised. Like I don't think that it is widely done in the market. The corollary in the public market. So if you have $100 million in Robin Hood, let's say you were on the founding team and you don't want to be exposed 100 million to Robin Hood. In the public markets, they have these vehicles called exchange trade of funds. You could put in your $100 million in kind and you get a portfolio of S&P 500. The reason people do that is you don't have to pay taxes on it. You get diversified

and then you could defer your taxes while minimizing your concentration. So that's been around for a while. But private markets, it's the first time I'm hearing about that. I don't think it really exists outside of like a secondary transaction, right? So like this is kind of growing in prevalence. And I do think if we expand that like piece of our kind of program, there are ways to to layer in, like, more tax-efficient ways to do it. Secondaries are famous for having lower information rights. How do you deal with that? And is there ever a case where you're able to underwrite an opportunity with low or no

information rights? Ooh, good question. The secondary markets and late-state venture as a whole are very opaque. It is hard to get access to information. I have a very institutional background, and we try and bring a more institutional level of diligence to what we do. So if we can't get access to enough information to underwrite what we're buying and and project out, you know, exit value and like likely financial forecast and things like that,

then we just don't do it until we can get access to more information. So there are companies that we haven't invested in that I would have loved to invest in. And we just didn't get the opportunity along the way to get access to enough information to really underwrite what we were buying in our kind of long-term views on the company. With that said, the amount of information we get varies on the type of transaction, who we're working with, whether it's directly with the company, whether it's coming into a tender that the company's running and there's a data room. So like it varies dramatically.

Once we get access to information, we can underwrite it. I'll say like that view unless something changes materially in the market can kind of hold for some period of time, whether six months or something. And so maybe we can then do transactions where we don't have additional information because we've already done this diligence informed this view. The biggest issue for like a lot of smaller investors in this market is that they literally don't know what they're buying. Like you see like, you know, share prices on marketplaces. I don't even know how they calculate what the valuation is associated with it. They don't even not fully got a table. They don't have the share count.

And actually, I see sellers coming into me frequently who quote a share price and evaluation that's completely wrong. And we often have access to more information than the sellers that we're buying from. Like it's a very asymmetric market in terms of like who has information and who doesn't. Speaking of the market, venture secondaries, specifically single stock venture secondaries, who are the investors there? Are they the same investors as typical venture capital alp? Primary investments and private companies fall under a venture exemption with the SEC.

So when I started Ultra, only 2% of venture capital companies were registered as an RIA with the SEC. Today it's closer to 9 or 10%. So it has grown dramatically over the last three or four years. And you're seeing a lot of like the later stage players register. I think a big driver of this is secondary opportunities. So secondaries are not venture exempt. So we'll have to register. Other funds that are playing in this space in any meaningful way.

We'll have to register. But what that means is that the rest of the venture capital industry, who knows these companies the best who have been investing in them all along the way, are not the natural buyers or players in this space. And so you're actually seeing capital come in from different parts of the market to kind of create this late stage and secondary ecosystem. So the big venture capital companies are now kind of becoming these big cross asset RIAs. You're seeing a lot of like public crossover funds come into the market, like really large institutions, Franklin, Tiro, Fidelity, Newburgh. Like really big names are starting to play here. Kotu, Tiger, have always kind of been in the space, family offices, sovereign wealth funds, and even like the major strategic.

So like we're seeing Amazon and Microsoft and Nvidia are now all massive late stage venture investors. And so it's a different set of players than traditional venture, but I think the opportunity in late stage venture and secondaries is so interesting that there is a lot of capital coming. Are the limited partners different than in the traditional venture capital, limited partners in these venture capital examples? It's a different asset class in terms of risk, in terms of duration. in terms of potential returns.

There's definitely some crossover in the LP base. You know, people that are naturally interested in early stage tech, I think inherently understand what we're going for in later stage tech. We also have a lot of public market investors. And here's why the way that I think about it, like from my own portfolio, like if you go back to the mid-2000s, the best venture-backed private technology companies would go public after five to six years on average at sub-500 million dollar valuations. And so Amazon, Apple, Netflix, Google, they had to go public to access growth capital.

So venture capital or venture capital as an industry was still a pretty niche industry that really funded the creation of companies. Once they hit scaling mode, they had to go public to access enough capital to grow, which means that investors, both retail and institutional investors, got to participate in all of that upside. So like, if you bought Amazon at the IPO, it's sub $500 million, it's now a $2.3 trillion company. That's like 4,000x plus return. I can't quite do the back in my head. Today, those companies are staying private for 10, 15 plus years and are worth hundreds of billions. We've now seen a trillion-dollar plus company created in the private markets. And so much of that value creation is happening in the private markets behind closed doors.

And so the way we think about it from a portfolio construction standpoint is that investors need to shift some capital from public markets into late-stage private just to recapture this. same type of innovation and growth profile compounding upside that they used to be able to get in the public markets. So Ultra exists because some of the best private tech companies in the world are staying private for longer. And so much of that value creation is happening behind closed source. Small traditional public growth companies are now late stage private companies, the same risk return kind of dynamics. The companies we invest in look like mid and large cap public companies from a size stage and risk standpoint. They're just really inaccessible to most investors. Just to demonstrate that this concept, both SpaceX and Anthropic going public, both of my

portfolio companies, full disclosure, are trying to get into the S&P 500 ahead of being listed. Sorry, they're trying to get into the NASDAQ index ahead of being listed, which obviously categorically means you're one of the largest companies. So they're trying to get into the largest pool of large growth companies at the time of listing, just to show you how crazy it is. Which I think makes perfect sense, right? Like, given the scale that they're at, it doesn't really make sense for there to be this kind of like arbitrary delay just because that was baked in historically. What about DPI? How do you underwrite DPI in secondaries versus a traditional venture fund? How do you think about that? A traditional venture fund is a 10-year fund. The average life of a traditional

venture fund is actually 14 plus years. So like the 10 years is kind of made up, right? It's like out the window. Our first fund is a five-year fund with three potential year extensions, just depending on the market and so forth. And it's fairly concentrated, like intentionally. We're two years into our fund one. We've already started returning capital to our investors through exits and IPOs and secondary liquidity. So it's a much shorter duration. Liquidity is higher. It's not liquid.

It's still an illiquid asset class, but it is more liquid than a early stage venture, right? And the duration is certainly shorter. I think most of the companies in our portfolio are likely or have the potential to go public in the next two to five years. Dell PCs with Intel Inside are built for the moments that matter. For the moments you plan and the ones you don't. built for the busy days that turn into all-night study sessions, the moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need

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When I think about getting access to venture, the analogy I just used on other podcasts is exposure therapy. So if family office wants to get into venture, how do they decrease their risk? I think one of the necessary components is you don't want to start in emerging managers to begin. And that's even for the benefit of emerging managers because if you invest and then you wait until year 10 to get your money back, you're not going to keep on investing in asset class. There's a couple alternatives that. There's secondary funds with minimized j curves. You can invest later stage as well.

It's a really critical success factor because as the retail comes into venture capital, if they start going into the very early stage, it's not going to be good for the industry. That's right. I think if you are new to it, you get kind of burnt out waiting for those returns that really come eight to four years. years out. People talk a lot about, well, we educate our clients, but I don't know if you could educate someone on a 10-year DPI. It's something that must be experienced. My very first investment in a startup took me seven years to get back my money. Obviously, I was 22 years old, so I was more impatient, but it didn't feel like seven years. It felt like 70 years. Seven years is a pretty good outcome, too. A lot of my early angel investments were, gosh, about nine years ago now. I mean, we're just starting

to see, like, a few exits. It's easier seven than done. And of course, once you get the money, you're like, oh, I love this. Like, that wasn't hard at all. Let me do it again. Well, and along the way, so many of them fail that you like, you know, you just feel like you've... It's a lot of negative reinforcement before you even get the money. You've emphasized your concentrated portfolio a couple of times. Talk to me about your portfolio construction and what the principles behind it is. What we've seen is that power law dynamics hold true throughout the equity market. So from early stage venture capital, it's one to two percent of early stage companies create the vast majority of returns for early stage funds.

In the public markets, it's the MAG 7 has generated a vast proportion of the returns, both across the S&P and the NASDAQ over the last five or 10 years. The same has held true in late stage private markets, where the top 10, and really like the top seven companies, have generated an enormous amount of the growth and value over the last five years. And so we are intentionally very concentrated. Percent of our portfolio is in our top 10 positions. And we have maybe 25 investments in.

total. And so it's intentionally very concentrated in the companies that we think will continue to create that power law dynamic and create the most value. And we'll start to build positions in companies that we think could move into that over time, but don't want to dilute our exposure much kind of outside of that group. The best public investors tell me the same thing. I was honestly surprised to hear that, that they think about it as power laws. They think about it as a buy and hold strategy. So they're thinking about it like venture investors, maybe not 14-year timeline, but what asset would I want to own for? for five to seven years and you invest in kind of the trading up and down is noise, but they're

looking at it very much like private investors. It's compounding, right? Like the power of compounding by the best companies in the world and hold them long term and let them grow. I think what we're doing is just allowing people to get exposure to those companies three to five years before they go public and really take advantage of that compounding. You've built this amazing ecosystem around you and you're great out partnering with outside other funds, other people.

Talk to me about your strategy and how you've been. built your deal sourcing network and your relationships? It's still quite inefficient. Despite the types of companies, like, in the space, the actual market is still very nascent, right? Like, it was really created over the last, like, 15 years. And most of the value has, has been over the last five years. So players are just coming into the space, but it's still a very relationship driven and very inefficient market. There is no marketplace, right? And so so much of my job, once we identify the companies that we want to invest in, it's really just figuring out how.

and how to continue doing that over time. So you pick the asset first and the structure second. My view is that the best companies are not hiding. It's just hard to invest in them. So every once in a while, kind of an up-and-coming company will come through and we'll do diligence on it. Usually don't invest right away. But like we actually does this exercise. We look at Series B and Series C companies led by the very top investors.

And over 90%, probably close to 95% of them were led by top Series A companies. This whole meme of these companies coming out of left field. and somebody in their basement comes out of stealth and raises $100 million from Sequoia. It's not a common thing. Oh, interesting. I think I thank you for sharing that. Yeah, I was surprised as well because I guess if you think about it in retrospect, it's like the exception proving the rule.

The fact that this is such a big story when a company comes out of nowhere is the proof that usually you have these leading indicators. Yeah. Sometimes it's not the multi-stage funds. It's the top C investors, but these known parties through known social networks, bringing it from the C to the Series A to the series B2 series C. between C and Series A, there are people that emerge from nowhere or, you know, there might be an Australian company or Israeli company that wasn't within Silicon Valley. But within A and B, it's actually quite predictive who your Series A investors.

Very interesting. A big part of my job to figure out how to invest in these companies, right? So is the company approving direct transfers on the cap table? Are investors rofering at certain prices? So like, are we going to put in an offer and then an existing investor just comes and takes it from us, right? Yeah, break-up fees or anything like that around them? No, it's not. It's not common. Certainly not at our transaction size. Maybe that exists at like, you know, billion-dollar deals.

So first you figure out if you do all the diligence, will it actually clear? I think there's actually far more transition risk in this piece of the market than there is company risk. So a lot of our diligence is focused on how to invest in the companies and then how to get the transactions closed. So who do we know on the cap table that we could potentially, like, give them a call and say, do you have any LPs in your fund that maybe want some liquidity? Because where you invested, you're up 50x. And this is a fund tender. There's like a lot of different things, right? So like let's say we have like a handful of friends from funds that are on the SpaceX cap table. Maybe they have some LPs in one of their early funds that would like some liquidity. So like you give them a call. Maybe there's an upcoming tender. Maybe we can participate directly. Maybe one of those funds will get a large allocation and we can become an LP and the fund that takes down that allocation. Maybe there's an opportunity for someone who's very close to the management team to sell a hundred million dollar block and it's more likely that that will get approved than some random ex-employee. So I would say there's like there's like. like good sellers and less good sellers depending on your relationship with the company and ability

There's a funny dynamic too where the company might hate one of its early employees and either they want to block them or they want to part ways forever. There's this kind of almost almost binary. Totally, totally. So that's all part of our diligence process of like. Depends on how much therapy, I guess. Is this pre-approved? Does the company, you know, have beef with you? Can we actually get this through? We're going to spend time on it. What percentage of the time are you getting filled in your allocation on the first deal versus building up your position? Because we launched in 2023 and have been kind of continuously raising capital over that period of time, we've just continued building positions in the best companies. And I think we'll continue to do that going

forward even within our like next fund strategy. Like we will start with positions. Like I don't think we'll ever be one and done on the best companies. I love the Stanley Drunken Miller strategy of invest and investigate. You invest, you get a little exposure, you learn more and then you decide whether to invest more. It's publicly incorrect to talk about it as a strategy and finance, but I think some of the best investors do put a toehold, get some exposure, learn a lot, and if their conviction grows, can write larger and larger checks. Are you ever trying to learn through your investment? Absolutely. And some of it is, okay, maybe learning more about the company, but also just, you know, seeing how the company grows, how the market evolves. And

like, I think over time as the company de-risks and you get more conviction in like your early thesis or maybe the thesis changed, but you have even more conviction, you just continue layering on and building those positions. What percentage of the time do you identify a company and you're not able to access it in any way? That's happened a few times. More often is that we get access, but we pass on like 95% of what we see because of some of the risks that we talked about on the transaction side. it could be counterparty risk, it could be closing risk, it could be Rover risk,

structural risk. This is still kind of like the wild wild west. So like you see a lot of weird stuff out there. And so it has to check a lot of boxes on like the legal side for us to be able to move forward with it. And so more often we get access, but either we don't have enough information to make a decision or there's just a risk that we can't get comfortable with. And so we, our default is to pass on it.

Like if I'm going to lose sleep over some risk that we took, it's like an automatic pass for us, even if we'd like the company and want to invest in it. One of the trendiest thing going on finance right now is continuation vehicles. They just passed $100 billion at Michael Woolhouse from TBG that raised a $1.9 billion fund to do this in the buyout space. Just recently had really my first serious conversation on this with Scott Foss from Harbor Vest. They're starting to do these continuation vehicles. Continuation vehicles is a fund might be in their 12th year. They have one asset. They might have SpaceX.

That's $100 million. And they don't want to have to liquidate it through the secondary market so they do this GP-led continuation vehicle. Do you see that entering venture? And if so, why? Potentially, we haven't seen it in a big way yet. But as more of these companies in a portfolio start to look like public companies, but the funds that invested in them early on are now 15 years old, like at some point, I think this comes in. Like we're seeing a lot of crossover between like private equity, you know, public markets, late stage venture, secondaries. The lines are kind of blurring about what this asset class looks like.

And so I do think we'll start to see more of those, especially among the larger shops. I'm not sure that a lot of like the early stage venture funds are, we'll see how it translates. I think you have to have like a decent size AUM to even just like have the legal wherewithal to pull off a continuation vehicle. But yes, I do think we'll probably see more of those just to give time for those companies to stay private compound, but also provide DPI liquidity to earlier investors. I think there has to be a couple things that are present for these deals to happen. One is they have to be a certain critical mass. So in private equity, the buyout, the original investment might be 100 million. Now it's $2 billion.

So there's an entire ecosystem that will help you. There's bankers that will go and find that $2 billion for the GP. There's LPs that will do significant diligence. And in the venture space, I think this will happen. Ironically, in these, you talked about these private companies, these private Mac 7, in the anthropics and open AIs, if it's a big enough position and if it's something that either a banker or the GP themselves could go out and raise $100 million for like an open AI and Anthropic, I think this is going to happen. the reason for that is multi-fold.

One is the GPs don't want to sell their best assets. It's not in anyone's interest. The LPs want liquidity. And the GPs, emerging managers specifically right now, it's very difficult to fundraise. They want to show that DPI mark. When you do a continuation vehicle, it's technically a secondary as it relates to your fund and fund math,

so you're able to show full DPI, which is such a huge differentiation now going into the private markets. So I think we're going to see it. I think a lot of GPs would love to do it, but their transaction size is too small to get a lot of helps. They're going to have to kind of beg barrow and steal and find LPs. Oftentimes for assets that are not SpaceX and Anthropic, it's going to be much more difficult. I do see this becoming bigger force in the venture market.

I think there's going to be a memetic aspect to it. Once a couple people do it, LPs will get more comfortable with it. GPs all have other GP friends. They'll kind of start learning about this. So I do see this coming probably as early as 2027. I think you're already starting to see it on a single asset basis. They're just not calling it continuation funds. It's happening in like a single asset vehicle where old LPs are selling.

and maybe there's a pool of them. New LPs are coming in. Like, we participate in those. They're not commonly... Are these portfolios or single assets? So these are single asset. I think you'll start to see more portfolios across those like multi-billion dollar, you know, funds. But right now it is happening.

It's just happening on like an individual basis. And those GPs, how are they finding the new investors for these continue, what I would still call continuation vehicles? A lot are potentially LPs within their existing portfolio. And then others in the ecosystem like, like us, there's family offices. I mean, we haven't talked about it yet, but I would say probably 50% of this quote-unquote market functions through kind of boutique brokers and investment banks that are trying to match buyers and sellers. The secondary market that you've talked about, the secondary players went from the black market where people were literally selling forward contracts. SEC was gray on it, did not love it to the scaled market with high forge equities then.

Then these were required by larger players like the Morgan Stanley's and the Charles Schwab's. what's the second order effects on that? Are we going to see more institutionalized secondaries and where is that market? And is that going to feed into retail? A lot of these acquisitions that you mentioned by like Schwab and Morgan Stanley were driven by retail demand and trying to figure out a way to service that demand. You also said that we went from black market to scaled. I do not think we're anywhere near scaled on this market. I think we're still kind of just, you know, maybe in gray territory, but trying to figure out how it's scale.

And in many ways, and I think this is the elephant secondaries is that. it'll never be fully scaled because private companies care who's on their cap table. So there's a huge amount of retail demand for access to these companies. And there's a lot of players trying to figure out how to provide that retail, like, see that retail appetite, I guess. I don't think that it's going to change anytime soon because the companies don't really want it. They want to control who's on their cap table. They want to control what the pricing is.

If they wanted to be fully liquid, they would just, go public. And so I think there's just like a structural like inconsistency there. We're like, just because there's a lot of demand does not mean it's why to be common in the first marketplace. So another way, the CFO of SpaceX, OpenAI, Anthropic doesn't have want to deal with individual investors texting them when they're going to go public and messaging them and asking for information. They want to deal with a couple trusted counter parties that could make it efficient and they want to focus on building their business. I think that's right. I mean, I think there's a lot of structural reasons why companies are staying private for longer. One, they can raise all the

capital they need in the private markets now, at least the best companies, right? Like, we have yet to see the limit on how much one of these companies can raise. Opening eye just raised $110 billion round in the private market. Which is twice as much as SpaceX is reportedly raising in their IPO. In their IPO, right? So, like, what is the public market anyway, aside from a lot of volatility and maybe headache for some of these companies? They want to control all their investors are. Maybe they don't want to deal with, like, the road shows and the day-to-day volatility and the quarterly earnings reports. And, like, they just want to grow confidentially for, you know, the future. when you're trying to build a rocket to Mars, like, what are quarterly earnings, you know, related to that?

So I think there is a lot of noise and headache about being public. At the same time, I think a lot of these companies will eventually become public companies just because the dealing with the liquidity for employees and executives and early investors is a headache, right? It becomes a full-time job in and of itself. The positive and negative reinforcement of being a public company is so destructive to long-term shareholder value. A funny way to explain this is if you're a private investor, you have these quarterly updates and you're talking to the board and then you're public investor. Now, after every quarter, somebody comes in and if you miss your mark by little, they just throw like ice water in your face. First time you're going to be like, this guy's an asshole. Why is he doing that? And then after three, four times, you're going to be essentially learned helplessness and you're going to be like, oh, okay, I need to focus everything on hitting my marks. Let's sand back the numbers. Let's not invest into this R&D that in five years

could 10x the company. There's so many downstream consequences of being a public company. And private CEOs to their credit have been able to. to prepare for these and have been aware of it. But it's also one of those things that's very difficult to internalize until you're a public CEO. Yeah, I think that's right. Jamie, you mentioned you started your career in the global financial crisis.

If you could go back to when you first started your career, what is one piece of advice you'd give a younger Jamie? That would have either accelerated your career or helped you avoid cost of mistakes. Gosh, I wish I could go back even like a little bit before that and learn how to become comfortable with failing faster, if that makes sense. So I don't know about you, I'm like first child type A perfectionist. Um, I didn't like not being good at things when I was younger. And I think I carried that into my career.

I think as I've gotten older, I've embraced trying new things, being bad at things as like a learning experience. Even failing, right? Like nobody likes it, but like viewing it as actually incredible feedback so that you can pivot and do something else quickly as opposed to like, No one was to fail slow, right? Just like leading in, trying harder things, failing faster and really embracing that as a part of the learning journey. It's one piece of one chapter and a success story. It is not at all the end of the road. I'll tell you two anecdotes which are actually the exact opposite of each other.

One is at our firm, me and my partner, Curtis, we've created this culture of you have to celebrate shitty first versions. And every first version is bad. Yeah. Nobody Van Gogh's first painting was not good. Everybody's first version is bad. It's by definition shitty. So you must celebrate it. So we have this culture when somebody does something and it's really, and it's bad,

including me and Curtis, everybody, we celebrate it. And you have to have like this policy because the default is like, that's just shit. That's just bad. And then two, the exact opposite is just to show you how much of a perfectionist I am. I was, I've never really learned how to ski. And I was sitting with actually my great uncle and my wife. And I was telling him, well, I need to find a ski seminar in New York. And I need like four days of full ski simulator.

So I could be like on second. And they're like, you could just get an instructor on the first day. I'm like, yeah, touch. I'm like, that's how reluctant. Just got to like thunder ridge for an afternoon and like just put on some skis and try it. Well, that's how reluctant and I used to be more perfectionistic. I like to think I've evolved, but that's how ingrained it is in adults, like not to be bad at anything. Like we create these elaborate systems.

I've been like planning the ski simulator for like probably three years just so I can not look back. And I still haven't done it. You started three years ago. Like you'd probably be a decent. Or well, if I just booked the ski trip, I would do it on the first day. It's even worse than that. But it's something about the human mind and the lack of plasticistic. as we get older, our egos become so fragile that it is very difficult to start.

I feel like my, I have less of an ego than I did when I was younger. Like I don't care what people think anymore. Like trying to speed out of the, like, it's like somewhere like in your early 30s, you like the most ego to skull, the most on how it. And then you start to care less and less. Yeah. If you can pull that forward a little bit, I think life will be happier. Well, Jamie, thanks so much for jumping on and sharing everything and looking forward to doing this again soon.

Thank you for having me. This was great. Thanks. If you found this conversation valuable, please click. follow how I invest so that you don't miss the next episode with the world's top investors.