The venture capital industry, a crucial engine for American innovation, has undergone a profound transformation over the past decade, marked by the ascendance of the secondaries market as a fundamental component of its operational infrastructure. 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 framework necessary for this paradigm shift. This strategic pivot reflects a broader understanding within the venture ecosystem: that supporting long-lived, high-growth American companies necessitates more flexible and patient capital structures, with secondaries playing an increasingly central role.
The Genesis of a Market: Reading the Tape Before the Consensus
Jared Carmel’s journey into the nascent world of venture secondaries began against a backdrop of economic turbulence. Graduating into a challenging job market at the tail end of the dot-com bust, mere weeks before the September 11th attacks, Carmel’s formative professional experiences were steeped in market volatility. This period instilled in him a critical understanding of economic cycles and the recurring patterns that define them. He observed how sectors once written off, from SPACs to telecom infrastructure and clean tech, often re-emerged years later, driven by renewed innovation and capital flows. This early lesson in market dynamics proved invaluable, shaping his conviction that understanding cyclicality was paramount to identifying future opportunities.
A pivotal moment arrived in late 2009. The anecdote often recounted is simple yet profound: a friend, an early employee at Facebook, was preparing for his wedding and sought to sell some of his shares before leaving the company. Carmel seized the opportunity, acquiring these shares at a few dollars apiece. While he readily admits to no longer owning them – a testament to the long-term holding power required in venture – the transaction itself was a revelation. It occurred before the concept of a "secondary market" was widely recognized or institutionalized. As Carmel himself noted, "This was before the secondary markets were even a market. Before people knew it existed."
This singular transaction opened a floodgate of possibilities. Recognizing an unmet need for liquidity among early employees and investors in burgeoning private companies, Carmel began actively facilitating such transactions. He provided an essential service for individuals holding valuable, yet illiquid, stakes in future tech giants like Facebook, Twitter, and Palantir. This early work eventually led him to G Squared, a prominent growth equity firm, where he further honed his expertise in private market transactions.
Manhattan Venture Partners and the Institutionalization Imperative
By 2014, Carmel’s experience had crystallized into a profound conviction: the secondaries market, while growing, desperately needed to be institutionalized. It required the same rigor, diligence, discipline, and sophisticated underwriting standards that characterized traditional primary venture capital firms. This belief served as the bedrock for the co-founding of Manhattan Venture Partners (MVP). MVP was established with a clear mission: to professionalize the secondaries space, transforming it from an opportunistic, often opaque, corner of finance into a transparent, robust, and reliable capital conduit.
The timing for MVP’s founding proved prescient. The venture landscape was already shifting, with companies choosing to remain private for significantly longer periods. The conventional wisdom of a quick exit via an IPO was being challenged by a confluence of factors, including increased regulatory burdens associated with public listings (such as the Sarbanes-Oxley Act of 2002), the growing availability of substantial private capital, and founders’ desire to retain control and focus on long-term value creation away from quarterly public market pressures.
The Evolving Landscape of Venture Capital: Longer Journeys, Deeper Capital
The American venture industry has spent the last decade quietly adapting to a new reality: the companies founders are now building demand longer maturation cycles. What were once seen as outliers – private companies enduring for a decade or more – have become increasingly common. Today, some of the most valuable private companies are well into their second decade of existence without having gone public.
Carmel posits that this extended private runway is not a symptom of distress within the market. On the contrary, he views it as a positive indicator, signifying that founders are tackling more complex, harder challenges that require substantial time, capital, and iterative development. He famously states, "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." This perspective challenges the conventional narrative of a "closed IPO window" as a negative economic indicator, reframing it as an evolution of the capital markets.
Indeed, data supports this observation. According to industry reports, the average time to IPO for venture-backed companies has steadily increased. In the early 2000s, it might have been around five to seven years; by the 2010s, it stretched to eight to ten years, and today, many prominent companies exceed a decade. For instance, data from sources like PitchBook and NVCA consistently show a rising median age of companies at IPO, reflecting this trend. This extended private phase necessitates a more sophisticated and flexible capital stack than previously existed. Secondary markets, alongside growth equity and a diverse base of late-stage investors, collectively provide the patient, long-horizon capital essential for these multi-decade journeys.
The integration of secondary capital has even begun to reshape the IPO process itself. Increasingly, secondary transactions are incorporated within IPOs, allowing existing shareholders to realize liquidity alongside new public investors. This subtle yet significant development underscores how deeply entrenched secondaries have become in the overall venture financing lifecycle, transforming the public listing event from a singular liquidity moment into one element of a broader, continuous capital strategy.
Why Secondaries Matter to the Innovation Economy: A Core Pillar
For many years, the secondaries market was considered a niche, often associated with "distressed" assets or limited partner (LP) portfolio rebalancing. Jared Carmel was among the earliest and most vocal proponents arguing that secondaries would transcend this narrow perception to become something far more central to the industry’s ability to support American innovation. His conviction has been thoroughly validated by market trends.
"Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," Carmel asserts. The rationale behind this transformation is straightforward and compelling. When companies are genuinely building for the long term – developing foundational technologies or tackling complex societal problems – every additional year of private runway translates into another year of compounding capability. A robust secondary market provides this invaluable time.
The benefits ripple across the entire ecosystem:
- For Early Employees and Investors: Secondaries offer crucial liquidity without forcing the company into a premature public offering. This allows individuals who took early risks to realize returns on their investments or equity compensation, improving personal financial planning and incentivizing future participation in nascent ventures. This is vital for attracting and retaining top talent in high-growth companies.
- For Companies: Healthy cap tables are paramount. Secondaries enable early investors to exit gracefully without creating pressure for an IPO or diluting subsequent funding rounds. This mechanism helps maintain a balanced investor base, bringing in new long-horizon investors with fresh conviction precisely when a company needs reinforcement for its next growth phase. It allows founders to concentrate on their core mission, building towards category-defining outcomes, rather than being distracted by constant fundraising or exit pressures.
- For the Broader Economy: By enabling companies to stay private longer, secondaries facilitate the development of more mature, resilient businesses before they face the intense scrutiny and short-term demands of public markets. This fosters deeper innovation and allows for strategic, rather than reactive, growth.
The growth of the secondary market itself is telling. According to various market reports, secondary transaction volume has surged, with annual figures often in the tens of billions of dollars globally. Secondary funds have also seen significant growth, with many major institutional investors launching dedicated secondary strategies or increasing their allocations to the asset class. Data from firms like Setter Capital or Greenhill shows that the market has expanded significantly, both in terms of the number of participants and the sophistication of the transactions.
Supporting the Companies America Needs: A National Imperative
Beyond the financial mechanics, a deeper question underpins the importance of the extended private journeys: what exactly are these long-horizon companies building? Jared Carmel’s answer points directly to critical sectors that Manhattan Venture Partners primarily invests in: artificial intelligence, defense, space, supply chain, and frontier compute. These are not merely industries; they represent foundational pillars for national security and economic competitiveness.
These companies are not "three-year" or even "ten-year" ventures; they embody twenty-year journeys, often with significant geopolitical and strategic implications. "The companies are going to need to build longer because they have more to build," Carmel explains, highlighting the inherent complexity and long development cycles required to innovate in these domains.
Carmel traces his personal conviction on this matter back to the COVID-19 supply-chain shock. The pandemic brutally exposed the United States’ vulnerabilities, revealing its inability to reliably source essential goods like medications and N95 masks. This crisis crystallized a trend he had observed for years: the quiet outsourcing of strategic capabilities that the country could ill afford to lose. The companies now emerging to rebuild and strengthen this domestic capacity share a common profile: they demand deep capital, attract top-tier technical talent, and crucially, require a willingness to plan in decades rather than quarters.
This last requirement – patient, long-term planning – is precisely where the venture industry has had to mature most significantly. Showing up for these founders is no longer simply a matter of writing a check. It involves a commitment to stay alongside them through protracted periods of difficult work, where validation may be years away, and the path is often uncertain.
For Carmel and MVP, being "helpful" transcends transactional engagement. "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," he emphasizes. This philosophy translates into tangible support: facilitating introductions to board members with deep expertise in critical sectors like defense and national security, connecting founders with operating leaders who can help scale complex organizations, and demonstrating a genuine willingness to remain invested through the arduous "long middle" of a company’s journey, when challenges are greatest and public accolades are scarcest. This deep engagement fosters trust and resilience, critical for companies operating in high-stakes, long-development environments.
The Broader Economic and Security Implications
The rise of institutionalized secondaries, particularly in critical sectors, carries significant broader implications for the United States. By providing sustained capital and liquidity for long-term projects in AI, defense, space, and supply chain, the venture ecosystem directly contributes to national resilience and strategic independence. In an increasingly complex global landscape, the ability to domestically develop and control cutting-edge technologies and essential infrastructure is paramount.
For instance, investments in frontier compute and AI are vital for maintaining technological leadership against global competitors. Enhanced defense capabilities, developed by agile private companies rather than solely relying on traditional government contractors, can provide a strategic edge. Rebuilding robust domestic supply chains reduces vulnerability to geopolitical shocks and ensures access to critical resources. The patient capital provided by firms like MVP allows these companies to develop their technologies fully, scale operations, and achieve strategic market positions without premature pressure to go public or seek foreign capital that might compromise national interests. This approach underpins a long-term vision for American innovation and security.
Future Outlook and Continued Optimism
When asked what fuels his enduring commitment to this work, Jared Carmel offers a two-fold answer. Personally, he finds immense satisfaction in the intellectual challenge and learning opportunity presented by delving deep into a dozen innovative companies each year, learning directly from the visionary individuals building them. The second, more expansive answer, centers on the future of the country.
"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 states with conviction. This encapsulates the core mission of the modern U.S. venture industry, as articulated by someone who has witnessed its cycles of booms and resets. The companies American founders are building today are often more ambitious, longer-horizon, and more capital-intensive than those of a generation ago. The venture industry, through the evolution of its capital structures and the institutionalization of markets like secondaries, has adapted to meet these demands. The ongoing work, therefore, is to ensure that capital continues to flow effectively and strategically to these companies through every stage of their challenging, yet profoundly impactful, journeys.
Manhattan Venture Partners’ role as a key member of the NVCA underscores its influence and commitment to advancing the venture ecosystem. To explore more about MVP’s mission and investment strategies, interested parties are encouraged to visit their website at www.mvp.vc.
