The venture capital landscape has undergone a profound transformation over the past decade, witnessing the emergence of a robust secondary market as a foundational component for funding and sustaining high-growth American companies with extended private lifecycles. At the forefront of this evolution is Jared Carmel, co-founder of Manhattan Venture Partners (MVP), a firm that has dedicated more than ten years to building the institutional infrastructure necessary for this pivotal shift. This strategic reorientation reflects a deeper understanding of market cycles, the changing demands of ambitious founders, and the critical need for flexible capital in an increasingly complex global economy.
Early Insights and the Dawn of a New Market Paradigm
Jared Carmel’s journey into the nascent secondary market began against a backdrop of significant economic upheaval. Graduating into the challenging job market at the tail end of the dot-com bust, mere weeks before the September 11th attacks, Carmel gained invaluable early lessons. This period underscored the cyclical nature of markets and the inevitability of patterns repeating themselves, a perspective that would later inform his pioneering approach. He observed how sectors once deemed obsolete, from specialized telecom infrastructure to clean technology and even special purpose acquisition companies (SPACs), often resurfaced years later, reinvented and reinvigorated. This cyclical understanding fostered a long-term view, preparing him for opportunities that others might initially dismiss.
A pivotal moment arrived in late 2009. The economic recovery was nascent, and the tech sector was quietly rebuilding. A friend, an early employee at Facebook, was preparing to leave the company for marriage and sought to liquidate some of his shares. Carmel, recognizing an unusual opportunity, acquired these shares at a modest valuation of a few dollars apiece. While he readily admits he no longer holds those specific shares – a common anecdote among early investors in hyper-growth companies – the transaction itself was revelatory. It illuminated a significant, albeit unacknowledged, liquidity gap within the private market. As Carmel himself noted, "This was before the secondary markets were even a market. Before people knew it existed."
At this juncture, the concept of a "secondary market" for private company shares was largely informal and fragmented, often associated with distressed assets or niche transactions. There was no established framework for diligence, valuation, or settlement. Yet, Carmel saw beyond the ad hoc nature, recognizing the immense potential for a structured market. From this initial transaction, he began systematically providing liquidity to early employees and investors at other burgeoning private companies, including social media giants like Twitter and emerging data analytics firms such such as Palantir Technologies. His early successes in this space eventually led him to G Squared, a prominent global venture capital firm, where he further honed his expertise in late-stage private equity and growth investments.
Manhattan Venture Partners: Institutionalizing the Secondary Market
In 2014, Carmel co-founded Manhattan Venture Partners (MVP) with a clear and ambitious conviction: the secondary market for private company shares needed to be institutionalized. This vision was predicated on the belief that these transactions should adhere to the same rigorous standards of diligence, discipline, and underwriting that characterized traditional primary venture capital investments. This was a radical idea at the time, challenging the prevailing perception of secondaries as a less sophisticated, often opaque segment of the market. MVP set out to build the necessary infrastructure, establishing robust processes for valuation, legal structuring, and investor relations, effectively professionalizing a market that was previously driven by individual connections and opportunistic trades.
The timing of MVP’s founding coincided with a broader trend in the American venture industry: a shift towards companies staying private for significantly longer periods. Historically, the average time to an initial public offering (IPO) for a venture-backed company was often in the range of 5-7 years. However, by the mid-2010s, this timeline began to stretch considerably, with many leading technology and innovation companies remaining private for 10, 12, or even 15+ years. Data from various sources, including PitchBook and NVCA, consistently illustrate this trend, showing median time to IPO increasing from around 6 years in the early 2000s to over 10 years by the late 2010s and early 2020s. This extended private runway necessitated new mechanisms for liquidity and capital infusion, which traditional primary VC funding alone could not fully address.
The Evolving Landscape: Longer Journeys and Deeper Capital
The industry’s adaptation to this new reality is not, as some might interpret, a sign of distress or a lack of viable exit opportunities. Instead, Carmel argues, it reflects a more profound development: founders are tackling more complex, harder problems that require extended development cycles and substantial capital. Many of today’s most valuable private companies are now well over a decade old, some even approaching two decades, as private entities. "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, challenging the conventional narrative. This perspective highlights the robust nature of the private capital markets, which have grown exponentially, offering founders ample resources to scale without the immediate pressures and regulatory burdens associated with public markets.
What has emerged in response is a more sophisticated and flexible capital stack. This multi-layered funding structure integrates various forms of capital: primary venture capital for early stages, growth equity for scaling, and crucially, a diverse base of late-stage investors, including secondary market participants. This ecosystem provides the patient, long-horizon capital essential for companies undertaking twenty-year journeys. The growth of secondary capital within IPOs themselves, where existing shareholders sell a portion of their holdings during the public listing, serves as a quiet but powerful indicator of how much the public listing event itself has evolved, often incorporating a liquidity event for early stakeholders alongside capital raising for the company. The global secondary market, once a niche, has surged in volume, with transaction values growing from an estimated $20-30 billion annually in the early 2010s to over $100 billion in some recent years, underscoring its increasing significance.
Secondaries as a Pillar of the Innovation Economy
For many years, the secondary market was relegated to a niche corner of venture finance, often viewed with skepticism or as a last resort. Jared Carmel was among the earliest proponents to articulate its potential to become far more central to the industry’s ability to foster American innovation. His conviction has proven prescient. "Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," he states, emphasizing its integral role.
The rationale is straightforward and compelling. When companies are genuinely building for the long term, every additional year spent privately offers a compounding effect on their capabilities, allowing for deeper product development, market penetration, and strategic partnerships without the quarterly pressures of public markets. A robust secondary market provides this essential time. It enables early employees and investors to realize liquidity from their holdings without compelling the company into an IPO before its business model, market position, or operational infrastructure are fully mature. This flexibility is critical for talent retention, as employees can monetize their equity without exiting the company or forcing a premature public offering.
Furthermore, a healthy secondary market ensures that cap tables remain dynamic and balanced. It allows early investors to manage their portfolio liquidity and rebalance allocations, while also facilitating the entry of new long-horizon investors. These new entrants often bring fresh conviction, strategic expertise, and additional capital at precisely the moment a company requires reinforcement for its next phase of growth. Ultimately, this mechanism empowers founders to maintain control and continue building towards the kind of category-defining outcomes that have historically been the hallmark of the U.S. venture industry.
Strategic Imperatives: Supporting Critical National Technologies
Beyond the financial mechanics, a deeper question arises: what kinds of long-horizon companies are being built with this patient capital? Carmel’s answer points to critical sectors where MVP primarily invests: artificial intelligence, defense technology, space exploration, supply chain resilience, and frontier computing. These are not merely industries; they represent strategic national imperatives. The dynamics at play in these sectors — deep capital requirements, highly specialized technical talent, and a willingness to plan in decades rather than quarters — are universal. Many of these ventures carry profound implications for national security, economic competitiveness, and societal well-being.
Carmel traces his strong conviction in these areas back to the profound shock of the COVID-19 pandemic and the ensuing global supply-chain disruptions. The inability of the United States to reliably source essential medications or even basic N95 masks highlighted a sobering reality: the country had quietly outsourced strategic capabilities that were indispensable. This crisis crystallized a trend he had been observing for years, underscoring the urgent need to rebuild domestic capacity in critical areas. The companies now emerging to address this challenge share a common profile: they demand significant capital investment, attract top-tier technical talent, and, crucially, necessitate a long-term vision from both their founders and their investors.
This last requirement has compelled the venture industry to evolve significantly. Supporting these founders is no longer simply a matter of writing a check. It demands a commitment to staying alongside them through extended periods of difficult work, navigating technical challenges, market uncertainties, and geopolitical complexities. As Carmel aptly puts it, "The companies are going to need to build longer because they have more to build." The scale of innovation required in areas like advanced AI, next-generation defense systems, and resilient supply chains dictates a patient, enduring approach to capital deployment.
For MVP and Carmel, being truly "helpful" to founders transcends transactional interactions. "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," he explains. This ethos translates into providing tangible, strategic support: facilitating board introductions with deep expertise in critical sectors like defense and national security, connecting companies with operating leaders capable of scaling complex organizations, and demonstrating an unwavering willingness to remain invested through the often-arduous "long middle" of a company’s journey, when the work is hardest and external validation may still be distant. This hands-on, long-term partnership approach is vital for companies tackling truly transformative challenges.
Optimism for the Future of American Innovation
When asked what fuels his continued dedication to this demanding work, Carmel offers a two-fold answer. Personally, he expresses a genuine sense of privilege in being able to immerse himself deeply in a dozen or more innovative companies each year, constantly learning from the visionary individuals who are building them. The intellectual stimulation and the opportunity to contribute to groundbreaking advancements are powerful motivators.
The second, broader answer centers on the country itself. "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," Carmel states with conviction. This observation underscores a vibrant, decentralized innovation ecosystem that spans diverse geographies and disciplines across the United States. The challenge, and the opportunity, for the U.S. venture industry, is to ensure that this burgeoning wave of creativity and entrepreneurship is adequately capitalized.
Having witnessed several boom-and-bust cycles, Carmel’s perspective is grounded in experience. The companies being built by American founders today are, by and large, more ambitious, longer-horizon, and more capital-intensive than those of previous generations. The venture industry, through the institutionalization of markets like secondaries, has adapted to meet these new demands. The ongoing work of keeping capital flowing to these critical companies, across every stage of their arduous, yet potentially transformative, journeys, is paramount to sustaining American leadership in innovation and securing its strategic future.
Manhattan Venture Partners, through its pioneering work in institutionalizing the secondary market, exemplifies this adaptive spirit. As a proud member of the NVCA, MVP continues to play a vital role in shaping an ecosystem that not only fuels economic growth but also strengthens the foundational pillars of national competitiveness and security. More information about MVP and its strategic investments can be found at www.mvp.vc.
