Manhattan Venture Partners (MVP) has spent over a decade meticulously constructing the institutional bedrock for a fundamental transformation within the U.S. venture ecosystem: the ascendancy of the secondary market. This specialized segment, once considered niche, is now rapidly becoming an indispensable component in how the industry finances and sustains the growth of long-lived, high-potential American enterprises. At the forefront of this evolution is Jared Carmel, co-founder of MVP, whose prescient understanding of market cycles and an unwavering conviction in the strategic importance of secondaries have reshaped venture capital’s landscape.
From Dot-Com Bust to Market Foresight: Carmel’s Early Vision
Jared Carmel’s entry into the professional world was marked by the harsh realities of a challenging economic climate. Graduating in the immediate aftermath of the dot-com bust, just weeks prior to the seismic events of September 11, 2001, he was immersed in a period of profound market contraction and uncertainty. This experience, rather than deterring him, instilled a deep-seated understanding of market cyclicality—a foundational lesson that cycles repeat, and opportunities often resurface in areas previously written off. From the resurgence of SPACs to renewed interest in telecom infrastructure and clean technology, Carmel observed a consistent pattern: industries dismissed as fads often return to prominence years later, albeit in new forms and with refined approaches. This early exposure to market volatility and recovery proved instrumental in shaping his investment philosophy and ability to identify nascent trends before they became mainstream. The dot-com bust had left a legacy of caution, particularly around internet-based businesses, but it also cleared the way for a more disciplined approach to technology investment, paving the path for the next wave of innovation.
A pivotal moment arrived in late 2009, a period when the global financial crisis was still casting a long shadow, yet the seeds of a new tech boom were being sown in private markets. A friend, an early employee at Facebook, was preparing for marriage and a career transition, expressing a desire to monetize some of his vested shares. Carmel seized the opportunity, acquiring a tranche of these private shares at a valuation that, in retrospect, appears remarkably modest. While he humorously admits he no longer holds those specific shares, the transaction itself was revelatory. It illuminated a critical market inefficiency: a lack of liquidity for employees and early investors in rapidly growing private companies. "This was before the secondary markets were even a market. Before people knew it existed," Carmel recalls, underscoring the embryonic nature of the ecosystem at the time. This informal transaction catalyzed his journey into what would become a defining segment of modern venture finance.
From this initial foray, Carmel began systematically addressing the liquidity needs of early employees at other burgeoning tech giants, including Twitter and Palantir. These companies, though privately held, were generating significant value, and their early contributors sought avenues to realize returns without waiting for an initial public offering (IPO). His work in this nascent space eventually led him to G Squared, a firm known for its growth equity and secondary market activities. By 2014, armed with a decade of experience and a clear vision, Carmel co-founded Manhattan Venture Partners. The firm was built on a core conviction that has since gained widespread acceptance across the industry: the secondary market, characterized by transactions involving existing shares of private companies, demanded institutionalization. It needed to operate with the same rigorous diligence, discipline, and underwriting standards traditionally applied to primary venture investments. This commitment to structure and professionalism was critical for bringing legitimacy and scale to a burgeoning, yet often opaque, market.
Founding MVP: Institutionalizing a Nascent Market
The imperative for institutionalization that drove the founding of MVP was not merely about formalizing processes; it was about elevating the secondary market to a level of trust and efficiency comparable to other mature financial markets. Prior to this push, secondary transactions often occurred on an ad-hoc basis, lacking standardized valuation methodologies, clear legal frameworks, and robust investor protections. This environment posed significant risks for both sellers seeking fair value and buyers looking for transparent investment opportunities. MVP’s mission was to bridge this gap by implementing best practices adapted from traditional finance and primary venture capital.
Institutionalization, in the context of venture secondaries, means several things. Firstly, it entails the application of stringent due diligence processes, meticulously scrutinizing a company’s financials, intellectual property, market position, management team, and growth prospects—much like a primary investor would. This moves beyond simply valuing shares based on the last funding round to a deeper assessment of intrinsic value and future potential. Secondly, it involves establishing clear legal and regulatory compliance frameworks to ensure transactions are transparent, equitable, and legally sound, protecting all parties involved. This includes standardizing transaction documents, ensuring proper disclosure, and navigating complex shareholder agreements. Thirdly, it demands a disciplined approach to underwriting, where investment decisions are based on comprehensive analysis rather than speculative fervor, focusing on long-term value creation.
The impact of this institutionalization has been profound. It has attracted a broader base of sophisticated investors—from family offices and sovereign wealth funds to large institutional asset managers—who previously shied away from the perceived risks and complexities of the informal secondary market. This influx of capital has, in turn, fueled the market’s growth, making it a more reliable and efficient mechanism for liquidity. Moreover, it has provided a credible and accessible pathway for early employees and investors to realize returns, fostering greater participation in the innovation economy. The professionalization of secondaries has not only de-risked the market but also made it a more attractive and integral part of the overall venture capital landscape, proving Carmel’s early thesis correct.
The Evolving Landscape of Venture Capital: Longer Journeys, Deeper Capital
The past decade has witnessed a quiet but profound evolution within the American venture industry, driven by a new reality: the companies founders are building today require significantly longer incubation periods to mature. It is no longer uncommon to find some of the largest private companies existing as private entities for twenty years or more. This extended timeline is not, as Jared Carmel firmly asserts, a symptom of distress or market failure; rather, it is a testament to the ambition and complexity of the challenges founders are tackling, and a clear indication that the venture ecosystem has adapted to support these grander, longer-horizon endeavors.
Several factors underpin this shift. Foremost among them is the sheer availability of private capital. The proliferation of growth equity funds, corporate venture arms, and a diverse array of late-stage investors has created an environment where companies can access substantial funding rounds without the immediate pressure of public market scrutiny. This allows founders to focus on long-term strategic objectives, invest heavily in research and development, and build truly disruptive technologies without the quarter-to-quarter earnings pressure that often accompanies a public listing. The average age of companies at IPO has steadily increased over the last two decades, from around 5-7 years in the early 2000s to well over 10-12 years today, with many high-profile tech companies waiting even longer. This data highlights a clear trend towards extended private lifecycles.
Carmel’s perspective provocatively challenges conventional wisdom: "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 statement encapsulates the core argument that the current environment offers founders more optionality than ever before. Companies are no longer forced into an IPO primarily for capital; they can raise massive amounts in private rounds, often exceeding the capital raised in smaller public offerings of previous eras. The incentive to go public has shifted from being a primary funding mechanism to more of a branding exercise, a liquidity event for specific long-term holders, or a strategic move for market leadership.
What has emerged in response to these longer journeys is a more sophisticated and flexible capital stack. This intricate layering of funding sources includes, crucially, a robust secondary market, alongside traditional growth equity and a diverse base of late-stage investors. This diversified capital structure provides the kind of patient, long-horizon funding that twenty-year journeys demand. Secondary markets play a vital role here, offering liquidity to early investors and employees without forcing the company itself to go public. This means founders can retain control, avoid the administrative burdens and public reporting requirements of a listed company, and continue to execute their long-term vision. The growth of the secondary market, which has seen transaction volumes escalate from single-digit billions annually in the early 2010s to tens of billions in recent years, underscores its increasing prominence. Reports from firms like Setter Capital and Greenhill show consistent year-over-year growth, often exceeding 20% in active periods, reflecting its essential function in today’s private capital markets.
Furthermore, a quiet but significant indicator of this evolution is the increasing presence of secondary capital within IPOs themselves. Many public listings now include a component where existing shareholders, rather than just the company, sell shares. This "secondary offering" within an IPO allows early investors and employees to realize partial liquidity at the public listing, even as the company raises new capital. This demonstrates how integrated secondaries have become, not just as a pre-IPO liquidity mechanism, but as an accepted and often strategic part of the public listing event itself, further blurring the lines between private and public market financing. This multi-faceted capital approach ensures that ambitious companies have the necessary financial runway and flexibility to navigate complex development cycles and emerge as category-defining leaders.
Secondaries as a Strategic Pillar for American Innovation
For a considerable period, the venture secondary market occupied a peripheral position, often viewed as a niche activity for specialized investors or a last resort for those seeking early exits. Jared Carmel, however, was among the earliest proponents to articulate a more expansive vision: that secondaries would evolve into something far more central and strategic to the venture industry’s capacity to fuel American innovation. That conviction has proven remarkably prescient, as secondaries are now widely recognized as a foundational pillar supporting the entire venture ecosystem.
"Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," Carmel emphasizes. The reasoning behind this transformation is both straightforward and compelling, particularly in an era characterized by prolonged private company lifecycles and increasingly ambitious technological undertakings. When a company is genuinely committed to building for the long term, every additional year of private runway translates into another year of compounding capability—whether that’s in technology development, market penetration, or talent acquisition. A robust and liquid secondary market directly facilitates this extended runway.
The benefits are multifaceted and directly contribute to the health and dynamism of the innovation economy:
-
Extended Runway for Innovation: By providing liquidity to early investors and employees, secondaries remove the pressure for companies to rush to an IPO before their business models are fully mature or their technologies are ready for prime time. This allows founders the invaluable gift of time—time to perfect products, scale operations, penetrate new markets, and navigate complex regulatory landscapes without the immediate demands and scrutiny of public markets. This extended private period is crucial for ventures in deep tech, biotech, or infrastructure, where development cycles are inherently long.
-
Liquidity Without Disruption: Early employees, who often accept lower salaries in exchange for equity, and early-stage angel or seed investors are crucial to a startup’s genesis. The secondary market allows these individuals to realize liquidity and monetize their hard-earned shares without forcing the company into a public offering prematurely. This is vital for talent retention, as it provides a pathway for employees to benefit from their contributions even if the company remains private for a decade or more. It also allows early investors to re-deploy capital into new ventures, thus continually fueling the pipeline of innovation.
-
Healthy Capitalization Tables: The ability to provide liquidity selectively helps maintain healthy capitalization tables. Without secondaries, early investors might push for an exit earlier than optimal for the company, or employees might leave to cash out their equity. By facilitating orderly sales of shares, secondaries can prevent disruptive pressure on management, ensure that long-term strategic investors remain on board, and even bring in new investors whose mandates align with the company’s extended private journey. This maintains alignment between shareholders and the company’s long-term vision.
-
Fresh Conviction and Capital: Secondary transactions are not just about existing shareholders selling; they also involve new long-horizon investors acquiring stakes. These new investors often bring fresh conviction, strategic insights, and additional capital at a moment when a company might most need reinforcement. They are typically sophisticated institutions willing to commit for the long haul, understanding the complexities and extended timelines of these ventures. This inflow of "patient capital" is critical for sustained growth.
In essence, secondaries empower founders to continue building towards the kind of category-defining outcomes that the U.S. venture industry has historically championed. It’s a mechanism that supports the entire lifecycle of innovation, from initial ideation through to global market dominance, recognizing that the path to success for truly transformative companies is rarely a sprint, but rather a decades-long marathon.
Investing in America’s Future: Critical Sectors and National Security
Beyond the mechanics of capital flow, the deeper question for any observer of the venture industry is what these long-horizon companies are actually building. Jared Carmel’s answer points directly to sectors of critical strategic importance to the United States: artificial intelligence, defense, space, supply chain, and frontier compute. These are not merely industries; they represent the foundational infrastructure of national security and economic competitiveness for the 21st century. The dynamics at play in these sectors—the need for deep capital, specialized technical talent, and an unwavering willingness to plan in decades rather than quarters—are precisely why the institutionalization of secondaries and long-term venture support is so vital.
"The companies are going to need to build longer because they have more to build," Carmel asserts, highlighting the inherent complexity and societal impact of these ventures. Building a next-generation AI platform, developing advanced defense technologies, establishing commercial space infrastructure, fortifying national supply chains, or pioneering new forms of computing are not undertakings that yield results in a typical three-to-five-year venture cycle. These are twenty-year journeys, fraught with technical challenges, regulatory hurdles, and immense capital requirements. The implications of success or failure in these areas extend far beyond shareholder returns; they directly affect national security, economic resilience, and global leadership.
Carmel traces his deep conviction in this strategic investment back to the profound lessons of the COVID-19 pandemic, specifically the acute supply-chain shock it triggered. The inability of the United States to reliably source essential medications or even basic N95 masks exposed a stark reality: the nation had quietly outsourced strategic capabilities that were, in hindsight, indispensable. This crisis crystallized a trend he had observed for years: a gradual erosion of domestic capacity in critical sectors, making the country vulnerable to geopolitical shifts and global disruptions.
The companies now emerging to rebuild and fortify this capacity share a common profile. They are characterized by:
-
Deep Capital Requirements: Developing advanced AI models, launching satellite constellations, or establishing domestic manufacturing for critical components demands substantial, patient capital that can withstand long development cycles and significant upfront investment. Traditional short-term venture models are often ill-suited for this scale of funding.
-
Specialized Technical Talent: These sectors rely on highly specialized engineers, scientists, and researchers—talent that is scarce and requires sustained investment in R&D environments. Companies need the stability of long-term funding to attract and retain such expertise.
-
Long-Term Vision: Success in these areas is measured in decades, not quarters. Founders must be prepared for extended periods of R&D, pilot programs, regulatory approvals, and slow market adoption. The venture industry’s role must evolve to match this long-term horizon.
This last requirement—a willingness to plan in decades—is perhaps the most significant adaptation the venture industry has had to embrace. "Showing up for these founders is no longer just a matter of writing the check; it is a matter of staying alongside them across long stretches of difficult work," Carmel explains. This signifies a paradigm shift from transactional investing to genuine partnership. Being truly helpful, he argues, transcends merely pushing a funding round or a liquidity event. "It’s being the person the founder calls before they decide whether they need one." This implies a deep, trust-based relationship where VCs act as strategic advisors, providing guidance on everything from talent acquisition to navigating complex geopolitical landscapes.
For MVP and Carmel, this means actively facilitating board introductions with profound depth in critical sectors like defense and national security. It involves connecting founders with operating leaders who possess the experience to help a rapidly growing company scale efficiently and responsibly. Crucially, it signifies a willingness to remain invested and supportive through the often-arduous "long middle" of a company’s journey—the period when the foundational work is hardest, market validation might still be distant, and external enthusiasm may wane. This unwavering commitment is what truly enables companies building for national interest to survive and thrive.
A Foundation for Enduring Optimism
When asked what fuels his enduring commitment to the demanding world of venture capital, Jared Carmel offers a two-fold response. Firstly, it is deeply personal: he finds immense satisfaction and intellectual stimulation in the privilege of immersing himself in a dozen or more innovative companies each year, learning directly from the visionary individuals who are building them. This continuous engagement with cutting-edge technology and entrepreneurial spirit remains a powerful motivator.
Secondly, and perhaps more significantly, his optimism is rooted in his unwavering belief in the strength and potential of the United States. "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. This observation underscores a fundamental shift: innovation is no longer confined to a few tech hubs or traditional sectors. It is democratized, spread across diverse geographies and industries, fueled by a broader talent pool and greater access to information and tools. This widespread technological dynamism represents a powerful engine for future growth and competitiveness.
This perspective forms the core argument for the continued evolution and adaptation of the U.S. venture industry. The current generation of American founders is tackling challenges that are often more ambitious, more capital-intensive, and inherently longer-horizon than those of a generation ago. From developing advanced AI to securing critical supply chains, these ventures require sustained support. The industry, through mechanisms like the institutionalized secondary market, has demonstrated its capacity to adapt to these new demands. It has moved beyond simply identifying promising startups to becoming a resilient infrastructure that can nurture and sustain growth over decades.
The ongoing work, as Carmel articulates, is to ensure that capital continues to flow efficiently and strategically to these companies through every stage of their arduous, yet ultimately transformative, journeys. This sustained flow of capital is not just about financial returns; it is about empowering the next wave of American innovation, fortifying national capabilities, and securing a competitive edge in a rapidly changing global landscape. Manhattan Venture Partners, under Carmel’s leadership, stands as a testament to this evolving commitment, embodying the institutional foresight required to support the companies that are quite literally building America’s future.
Manhattan Venture Partners has carved out a pivotal role in the venture capital ecosystem, demonstrating that strategic liquidity and long-term capital are not mutually exclusive. As the U.S. innovation economy continues to mature and tackle increasingly complex challenges, MVP’s model of institutionalized secondary market engagement will remain a critical enabler for founders, investors, and ultimately, for the nation’s technological leadership. To learn more about MVP and its contributions to this evolving landscape, interested parties can visit their website at www.mvp.vc.
