Is the financialization of venture — fund-stake sales and secondary markets — good for founders and the ecosystem?

Tom Hulme · May 8, 2024

The angel market has improved dramatically because low-friction SPVs and platforms like AngelList let angels sell follow-on rights and do work that was impossible a decade ago

Spinning up a low-friction SPV was not happening ten years ago, and secondary liquidity simply wasn't available when he started

Scope: notes AngelList is a GV investment

17:57 20VC: GV's Tom Hulme on Why Investing in Foundation Models is like Investing in "Power Stations", The Conventional Wisdom in VC that is BS & Lessons from a 24x Angel Track Record, 255x on Robinhood and Making Billions on Uber

Taavet Hinrikus · Apr 28, 2025

Long liquidity timelines are a real problem needing better solutions, but companies that are well capitalized and hitting milestones will find liquidity through secondary markets even while private.

SpaceX is a private company with zero liquidity issues because there is always an open secondary market; value creation and milestones attract that demand even if revenue takes longer.

Scope: harder for the 'crazy' deep-tech companies Plural backs; some of these companies may need billions

17:12 20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus

Harry Stebbings · Aug 25, 2025

Venture is a very challenging asset class unless you can recognize and act on the small windows of hyperliquidity

36:31 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Gokul Rajaram · Mar 16, 2026

Secondary markets are one of the most important positive developments in venture in recent years, and the market is currently in a hyper-liquid period investors should take advantage of thoughtfully

Great private companies now have liquid secondary markets where shares can be sold, and post-IPO lockups add uncertainty to holding

Scope: subject to company ROFRs

63:48 20VC: The 8 Moats of Enduring Software Companies: How to Analyse for Durability and Defensibility in a World of AI | Why Dropouts are "AI Maxing" the World & Remote Early-Stage Companies are Dying with Gokul Rajaram

Gili Raanan · Mar 28, 2026

The growing sophistication of secondary markets is a highly positive development, creating better solutions for employees, founders and LPs

More sophisticated markets allow better instruments — secondaries solve both the talent-retention strain of long private lives and give early-stage firms a route to return capital to LPs

34:27 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

David Frankel · Aug 8, 2026 · hedged

The financialization of venture — including fund-of-funds selling entire funds or vertical slices on secondary — has become far more sophisticated; it may be good for entrepreneurs because of the added liquidity, but it helps winners and is very tricky for everyone else

Fund of funds are selling positions they'd never sell on merit, purely to give their LPs liquidity for the next fund

50:45 Added liquidity helps winners and hurts everyone else

Harry Stebbings · Sep 8, 2025 · hedged

Many great European companies of the last twenty years sold only because secondary and liquidity options were unavailable, and would not have sold otherwise

The absence of liquidity made selling the company the only path to meaningful financial outcomes for founders and teams

64:15 Absence of liquidity forced premature european exits

Matt Murphy · Jul 27, 2026

A public crackdown on unauthorized SPVs was needed because many bad actors were aggregating investors while only claiming to have access

People rounded up capital for SPVs and only then tried to get access; a shot across the bow signals that anything not directly in partnership with the company isn't real

17:52 Unauthorized access spvs needed a crackdown