The landscape of American venture capital has undergone a profound transformation over the past decade, moving towards a model that supports companies through longer private journeys and more complex capital structures. At the forefront of this evolution is Jared Carmel, co-founder of Manhattan Venture Partners (MVP), a firm recognized by the National Venture Capital Association (NVCA) for its pioneering work in building the institutional infrastructure for the burgeoning secondaries market. This strategic shift, driven by MVP’s foresight and persistent conviction, has cemented secondaries as an indispensable pillar in how the industry funds and sustains the nation’s most ambitious and long-lived high-growth enterprises.
The Genesis of a Market: A Chronological Journey and Prescient Observations
Jared Carmel’s journey into the intricate world of venture capital began at a challenging inflection point in economic history. Graduating in the tumultuous wake of the dot-com bust and just weeks prior to the tragic events of September 11, 2001, Carmel was exposed to the brutal realities of market downturns early in his career. This period instilled in him a critical lesson: markets operate in discernible cycles, and patterns, though often dismissed, inevitably re-emerge. He observed how sectors once written off, from SPACs to telecom infrastructure and clean tech, would invariably cycle back into prominence, often years later. This early education in market dynamics would prove foundational to his later insights.
A pivotal moment that catalyzed his career trajectory arrived in late 2009. A friend, an early employee at Facebook, was preparing for his wedding and contemplating a departure from the company. Seeking liquidity for his vested shares, the friend presented Carmel with an opportunity. Carmel, recognizing the potential, acquired a portion of these shares, paying a few dollars apiece. While he readily admits to no longer holding those particular shares – a common anecdote in the fast-paced world of early-stage investing – the transaction itself was revelatory. As Carmel recounts, "This was before the secondary markets were even a market. Before people knew it existed." At that time, private share transactions were largely informal, ad-hoc arrangements, lacking standardized processes, transparent pricing, or institutional backing.
From this initial foray, Carmel began to systematically provide liquidity for early employees at a clutch of then-private tech giants, including Facebook, Twitter, and Palantir. This informal network and burgeoning expertise eventually led him to G Squared, a growth-equity firm, where he further honed his understanding of late-stage private markets. However, a deeper conviction was brewing: the secondary market, despite its nascent state, was destined for institutionalization. This belief culminated in 2014 when he co-founded Manhattan Venture Partners. The firm was established on the explicit premise that the venture secondaries market required the same rigorous diligence, discipline, and underwriting standards typically applied to primary venture investments. This vision was, at the time, contrarian but has since become a widely accepted industry standard.
The Evolving Venture Landscape: Longer Journeys and Flexible Capital Structures
The American venture industry’s quiet evolution over the past decade has been a direct response to a fundamental shift in how companies are built and scaled. Today’s founders are tackling increasingly complex challenges, leading to enterprises that require significantly longer gestation periods before reaching maturity or considering a public listing. It is not uncommon for some of the largest and most impactful private companies to now be in their second decade of existence as private entities.
This phenomenon is frequently misinterpreted as a sign of market distress or a "closed IPO window." However, Jared Carmel offers an alternative, more nuanced perspective. He posits that this extended private runway is not indicative of weakness but rather a testament to the ambitious nature of the projects being undertaken and the industry’s successful adaptation to support them. "The IPO window is not closed because the markets are bad. The markets are great. It is closed because companies don’t need to go public to keep building," Carmel asserts.
Supporting data corroborates this observation. According to PitchBook-NVCA Venture Monitor reports, the average age of U.S. venture-backed companies at the time of their IPO has steadily climbed. In the early 2000s, many companies went public within five to seven years of their founding. By the 2010s, this average stretched to nearly a decade, and more recently, it has extended even further, with some significant tech companies choosing to remain private for 12-15 years or longer. This trend is also reflected in the exponential growth of capital raised in the private markets, allowing companies to access substantial funding without the immediate pressures and regulatory burdens of public markets. In 2021, for instance, venture capital funding in the U.S. reached an unprecedented $330 billion, much of which flowed into later-stage rounds, enabling extended private growth.
What has emerged in response to these longer journeys is a more sophisticated and flexible capital stack. This multi-faceted approach integrates primary venture capital, growth equity, a diverse base of late-stage investors, and crucially, robust secondary markets. Together, these capital sources provide the patient, long-horizon funding essential for companies embarking on twenty-year development cycles. The role of secondary capital has even expanded to be integrated within IPOs themselves, a quiet but telling indicator of its mainstream acceptance and strategic importance. These "liquidity events" within public offerings allow existing shareholders to sell a portion of their holdings at the time of listing, demonstrating the continued need for flexible exit mechanisms even as companies transition to public ownership.
Strategic Importance: Why Secondaries Are a Core Pillar of the Innovation Economy
For a considerable period, venture secondaries were relegated to a niche corner of the broader investment landscape, often viewed with skepticism or as a last resort. Jared Carmel was among the earliest proponents to articulate the vision that secondaries would evolve into something far more central and critical to the venture industry’s capacity to foster American innovation. That conviction, once a bold prediction, has proven remarkably accurate and has aged exceptionally well.
"Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," Carmel emphasizes. The rationale behind this elevation is straightforward and compelling. When a company is genuinely committed to long-term development, every additional year spent in the private domain translates into another year of compounding capability, allowing for deeper product development, market penetration, and strategic execution free from quarterly earnings pressures. A robust and institutionalized secondary market grants these companies invaluable time. It enables early employees, who often receive equity as a core component of their compensation, and early-stage investors, such as angel investors and seed funds, to realize liquidity for a portion of their holdings without compelling the company into a premature public offering.
This flexibility has several profound benefits. Firstly, it helps maintain healthy cap tables by allowing early stakeholders to de-risk their positions without a full exit, potentially reducing pressure on founders to chase short-term gains. Secondly, it permits new, long-horizon investors to inject fresh capital and conviction precisely when a company might need reinforcement for its next phase of growth. This inflow of new capital and expertise can be crucial during challenging development phases. Finally, and perhaps most importantly, it empowers founders to remain focused on their long-term vision, building towards the kind of category-defining outcomes that have historically underpinned the success of the U.S. venture industry. By providing an orderly and transparent mechanism for liquidity, secondaries de-risk the entire venture ecosystem, making early-stage investments more attractive and sustainable. This trend is widely welcomed by early-stage investors and founders, who gain greater optionality and control over their financial futures and company trajectories, respectively.
Investing in America’s Future: Critical Sectors and National Imperatives
Beyond the mechanics of capital, a deeper question arises for any observer seeking to understand the contemporary venture industry: what are these long-horizon companies actually building? Jared Carmel’s answer points directly to the critical sectors that Manhattan Venture Partners primarily targets: artificial intelligence, defense, space, supply chain, and frontier compute. These are not merely high-growth sectors; they represent strategic national imperatives.
These companies are inherently different from the typical "three-year" or even "ten-year" venture plays of previous eras. They are embarking on "twenty-year journeys," and many carry profound implications for national security and economic competitiveness. "The companies are going to need to build longer because they have more to build," Carmel explains, underscoring the complexity and scale of these undertakings.
Carmel traces his personal conviction regarding these strategic investments back to the harrowing experience of the COVID-19 pandemic and the ensuing supply-chain shock. The inability of the United States to reliably source essential medications, N95 masks, and other critical goods laid bare a sobering reality: the nation had quietly outsourced strategic capabilities it could no longer afford to be without. This crisis crystallized a trend he had observed for years. The companies now being built to re-establish and strengthen these capacities share a common profile: they demand deep pools of patient capital, exceptional technical talent, and, crucially, a willingness to plan in decades rather than mere fiscal quarters.
This last requirement – the multi-decade planning horizon – is precisely what the venture industry has had to grow into. Showing up for these founders is no longer just a matter of writing a check; it demands a steadfast commitment to staying alongside them through extended periods of difficult, often unglamorous work. The implications for national security are clear: investing in these foundational technologies is paramount to maintaining U.S. leadership in a rapidly evolving global landscape. Government bodies, including the Department of Defense and agencies like DARPA, are increasingly recognizing the critical role of private innovation in these sectors, often looking to venture capital to bridge the gap between cutting-edge research and deployable solutions.
The Role of a Value-Added Investor: Beyond the Transaction
For Carmel and MVP, being a truly helpful partner to founders transcends the transactional act of providing capital. It embodies a philosophy of proactive, deeply engaged support that anticipates needs before they fully materialize. "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," Carmel states, highlighting a nuanced approach to investor-founder relationships.
This means MVP’s involvement extends far beyond capital deployment. It includes facilitating board introductions with individuals possessing deep expertise in critical sectors like defense and national security. It means connecting growing companies with seasoned operating leaders who possess the experience to guide them through complex scaling challenges. And perhaps most importantly, it signifies a genuine willingness to remain invested and supportive through the often-arduous "long middle" of a company’s journey – a phase where the foundational work is hardest, and external validation or clear exit pathways may still be years away. This long-term partnership approach is highly valued by founders, who often express the need for investors who understand the protracted nature of their endeavors and can offer strategic guidance beyond mere financial backing.
Optimism for the American Innovation Ecosystem
When asked about the enduring motivation behind his work, Jared Carmel offers a two-fold answer. On a personal level, he expresses a profound sense of privilege in being able to immerse himself deeply in a dozen or so innovative companies each year, learning directly from the visionary individuals who are building them. This intellectual curiosity and engagement with groundbreaking technology remain a powerful driving force.
On a broader scale, his optimism is rooted in the current state of the nation. "Technology is being built by more people than at any other moment in my career. Our job is to keep capital flowing in a way that matches that reality," he asserts. This statement encapsulates a powerful case for the enduring strength and adaptability of the U.S. venture industry, articulated by an individual who has witnessed its cycles of booms and resets. The companies American founders are conceptualizing and bringing to fruition today are, by and large, more ambitious, longer-horizon, and more capital-intensive than those of a generation past. The industry, through the likes of Manhattan Venture Partners and the institutionalization of mechanisms like the secondary market, has demonstrably adapted to meet these new demands.
The continuous flow of capital to these pioneering companies, through every stage of their protracted journeys, is not merely an economic function; it is a strategic imperative. It ensures that the United States maintains its competitive edge in critical technological domains, fosters job creation, and continues to be a global hub for innovation that addresses both market opportunities and national needs. Manhattan Venture Partners, through its focused strategy and deep conviction, plays a crucial role in sustaining this vital ecosystem. The NVCA is proud to recognize MVP as a key member contributing to the robust health and future direction of American venture capital. To learn more about MVP and its impact, further information is available at www.mvp.vc.
