How much secondary liquidity should late-stage founders take, and when?

Alex Bouaziz · published Feb 1, 2023 · hedged

Taking secondary at Series A is unwise; taking a modest amount at later rounds, systematically refreshed each round, makes more sense

The right amount is whatever makes you comfortable given your situation, and taking a lot is probably not smart because the shares are likely worth much more later

Scope: depends on the founder's personal situation; Alex has no family and only wanted a home plus diversification

33:14 20VC: From $57M in ARR to $297M in Just 12 Months; Why Speed of Execution is the Most Important Factor to Success, Hiring 2,000 People in 3 Years Remotely & Secondaries; Why, When and How Much To Take Out with Alex Bouaziz, Co-Founder & CEO @ Deel

Harry Stebbings · published May 27, 2025

Founders should not take $20-30M of secondaries at early stages — the timing of secondaries matters

Scope: early-stage rounds specifically

75:41 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

Jack Zhang · published May 27, 2025

Late-stage founders should take enough secondaries to be set for life — roughly $20-30M in a city like London

You want the founder all in on building the business rather than worrying about feeding the family, supporting kids or buying a house

Scope: late-stage founders only; amount depends on cost of living; Melbourne lower than London

75:10 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

Jack Zhang · published May 27, 2025

Late-stage founders (companies above a $1B valuation) should take $20-30M in secondaries — enough to remove money worries but not enough to be life-setting

A founder who isn't thinking about supporting their family can be all-in on the vision, while the amount stays modest enough not to be a 'set for life' sum

Scope: applies to late-stage founders above a billion-dollar valuation; not appropriate at early stages

75:49 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

Harry Stebbings · published Jan 4, 2024

At that stage of company trajectory a $10M secondary doesn't serve investors' needs — they need to move $150M to get a 3-4% position

Late-stage investors need to deploy meaningful capital for a meaningful stake

32:28 Late stage investors need large secondary positions to achieve meaningful ownership

Paul Graham · published Apr 2007

Letting founders cash out partially would fix the risk-profile mismatch, and VCs are being too conservative in spreading this custom too slowly.

Founders have low enough standards to feel rich on sums that seem small to investors; VCs hold back only because they fear seeming irresponsible if someone takes the money and quits.

source Partial founder liquidity fixes the founder investor risk mismatch and vcs are too slow to adopt it