Should founders sell secondary shares when buyers come calling?

Satya Patel · Jan 30, 2023

Small amounts of secondary liquidity can free a founder to do their best work, while obscene amounts of liquidity are obscene

Startups are hard enough; part of the investor's job is reducing founder distress, and the right minimum should be discussed at the start and revisited as life circumstances change

Scope: appropriate stage varies — sometimes Series A, sometimes Series D; requires the founder to be practical about what's realistic

17:16 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Brian Halligan · Jan 15, 2024

Founders should sell some secondary — it provides a personal cushion and aligns their incentives with their venture investors

Removing personal financial pressure lets you build for decades rather than for a sale

57:47 20VC: Hubspot Co-Founder Brian Halligan on Leadership Lessons Scaling Hubspot to a $28BN Market Cap | The Best Series A Investment in Venture History & What Makes Sequoia so Successful?

Victor Riparbelli · Jan 15, 2025

Founders should take secondaries off the table when they can, because removing financial stress and single-stock concentration lets them make better, more rational decisions

Without secondaries he is certain he and his co-founders would have thought about selling the company much earlier

Scope: based on his own experience at Synthesia

67:24 20VC: Why Scaling Laws Will Not Continue | OpenAI vs Anthropic vs X.ai: Who Wins and Why | How Far Will Model Providers Go Into the Application Layer | The End State for Models: Many Specialised or Few Generalised with Victor Riparbelli @ Synthesia

Eléonore Crespo · May 9, 2025

Secondaries should be sized only to whatever puts your mind at ease so you can focus fully on the company — or used to bring an excellent new investor into the round.

The best founders aren't in it for the money; money doesn't buy them anything, so the only value of a secondary is removing personal logistical distraction.

44:26 20VC: Four Traits of the Most Successful Founders | How to Hunt and Close Talent Like a Pro and Where All Founders Go Wrong | Lessons Raising $397M From the Best Investors in the World with Eléonore Crespo @ Pigment

Paul Erlanger · Jun 27, 2026

Founders taking secondaries is a good idea provided the amount is not extravagant

Taking some money off the table lets a founder say no to acquisition offers and commit to building for the next decade

Scope: must be a small amount that doesn't change lifestyle

42:10 20VC: How We Got Fred Wilson, Benchmark and Index to Invest $94M | Why Robinhood's Strategy is Wrong | Why 1-1s are BS and What Every Founder Gets Wrong About Equity | Why Taste Beats AI But How AI Kills Org Charts with Paul Erlanger, CEO @ fomo

Jason Fried · Jan 6, 2023

Founders should not be blamed for taking secondaries — it is healthy and smart to take some money off the table as you go rather than putting everything back into the business

You took tremendous risk and invested enormous time and energy when you could have done anything else; he and David sold a small piece of their shares to Bezos in 2006 for exactly that reason, not knowing if Basecamp would last

35:40 20VC: Why Financial Planning and Goals Do Not Work, The Decision to Ban Politics in the Workplace and Losing 1/3 of the Team Overnight & The One Question That Will Drive All Decision-Making for Leaders with Jason Fried, CEO @ 37Signals

Harry Stebbings · May 8, 2024

Johnny Boufarhat is unfairly demonized for taking money off the table at Hopin — it was the supply of capital that pushed him to do it and he was fully within his rights

Investors competing to get into the deal pushed secondary liquidity on him

Scope: Harry frames it as a bold thing to say

41:19 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

Harry Stebbings · Oct 14, 2024

Growth investors who shoveled cash at founders in the good times have no standing to now criticize those founders for having taken money off the table

They pushed $30M on founders who quite rightly accepted it

61:28 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Harry Stebbings · Oct 16, 2024

Founders should be able to take secondaries; making some money personally changes how a founder is able to think.

His own experience: a little liquidity enabled him to think differently.

27:24 20VC: Why Founder Mode is Dangerous & Could Encourage Bad Behaviour | Why Fundraising is a Waste of Time & OKRs are BS | Why Angel Investing is Bad for Founders to Do and the VC Model is on it's Last Legs with Zach Perret @ Plaid

Harry Stebbings · May 27, 2025 · hedged

Founders who took secondaries in 2021 are wrongly chastised for it, and secondaries are very good in a lot of cases

Scope: in a lot of cases

74:57 20VC: The Most Insane Story in Startups: Airwallex: The Angel That Turned $1M into $1BN | The Fund That Pulled a Term Sheet & Lost $1BN | Rejecting Stripe's $1.2BN Offer | Scaling to $1BN in Revenue & 100% YoY Growth for 8 Years with Jack Zhang

Hunter Walk · Jan 30, 2023

Investors should talk openly with founders about personal money and be willing to fix founder financial stress via salary bumps or small early secondary

A founder who just raised a $20M round but is student-loan-heavy and cash poor can't focus on the business; destressing them raises the probability of a good outcome

Scope: not putting the founder ahead of the business; not cashing out ahead of team or investors in hot markets

16:06 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

David Frankel · Oct 14, 2024

Encouraging founders to take early secondary is self-serving for investors, not generous — the first million dollars removes the mortgage and family financial pressure that otherwise distracts the founder

A founder worrying about the mortgage and under pressure at home is a worse founder; alleviating that pressure benefits the investor

Scope: less relevant for founders in their early twenties without such obligations

60:21 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Brendan Foody · Sep 15, 2025

Founders taking secondaries should keep them small and non-distracting so they visibly demonstrate total commitment to the company

The vision sold to employees and investors is that this is the founder's life's work for decades, and that must be demonstrated on every dimension

52:01 Keep secondaries small to preserve commitment signal

Guillaume Moubeche · Dec 13, 2024

Secondary and cash-out, where money goes directly to the founder, is a great option for high-EBITDA bootstrapped companies

Primary capital would only have gone into hiring and spending, which wasn't what the business needed

30:58 Secondary cash out fits profitable high ebitda bootstrapped companies

Brian Halligan · Jan 15, 2024

He does not regret selling founder shares at a $250M valuation even though the company is now worth 100 times that

A million dollars at that stage was life-changing to him in a way the same sum wouldn't be today — the standard time-value-of-money framing of a 10% return misses how much more valuable the money was then

56:09 Earlier money has higher marginal utility so selling early secondary isnt a mistake even in hindsight

Josh Browder · May 18, 2026

Founders being bombarded with secondary offers should be slow to sell, because the buyers are sharks with better market information than a first-time founder

If someone is emailing to buy your shares the value is probably going up; friends of his regretted selling secondaries after a kingmaker firm came in and the valuation tripled within weeks

51:42 Hold because secondary buyers know more than you