In a landscape increasingly defined by protracted growth cycles for innovative companies, the venture capital industry has quietly undergone a profound structural evolution. At the forefront of this transformation is Jared Carmel, co-founder of Manhattan Venture Partners (MVP), a firm that has dedicated over a decade to building the robust institutional infrastructure necessary for the burgeoning secondaries market. This market, once a niche corner of venture finance, is now recognized as a critical pillar, funding and sustaining the long-lived, high-growth American enterprises that are shaping the nation’s future economy and security.
The Genesis of a Market Visionary
Jared Carmel’s journey into the intricacies of venture capital began at a challenging juncture: his graduation coincided with the tail end of the dot-com bust and the immediate aftermath of the September 11th attacks. This turbulent period instilled in him an indelible lesson about market volatility and the cyclical nature of economic trends. He observed how sectors once deemed obsolete, from SPACs to telecom infrastructure and clean technology, would invariably re-emerge years later, often with renewed vigor and institutional backing. This early exposure to market ebb and flow cultivated a keen sense for identifying latent opportunities and understanding underlying patterns before they became widely apparent.
A pivotal moment arrived in late 2009, when a friend, an early employee at Facebook, sought to liquidate some shares prior to his wedding and departure from the company. Carmel, recognizing the intrinsic value, purchased these shares at a modest price. While he no longer holds them—a fact he readily acknowledges with humor—the transaction itself was revelatory. It occurred at a time when secondary markets were virtually nonexistent, operating largely in an informal, ad hoc manner without established frameworks or widespread recognition. This informal exchange highlighted a critical unmet need: a mechanism for early employees and investors in promising private companies to realize liquidity without forcing a premature public offering.
From this initial, serendipitous transaction, Carmel began systematically providing liquidity to early stakeholders at rapidly growing private companies such as Facebook, Twitter, and Palantir. His expertise in this nascent field quickly grew, leading him to G Squared, a firm known for its focus on growth equity and secondaries. By 2014, armed with a conviction that was then ahead of its time but has since become an industry consensus, he co-founded Manhattan Venture Partners. The firm’s founding principle was clear: the secondaries market needed to be institutionalized, underpinned by the same rigorous diligence, discipline, and underwriting standards applied by leading primary venture capital firms. This vision aimed to elevate secondary transactions from informal dealings to a sophisticated and essential component of the venture ecosystem.
The Era of Longer Journeys: Why Companies Stay Private
The past decade has witnessed a fundamental shift in the operational lifespan of American venture-backed companies. What was once a typical five-to-seven-year journey to an IPO has extended considerably, with many prominent private companies now operating for a decade, or even two decades, before considering a public listing. This phenomenon is not, as some might perceive, a signal of market distress or an inability to attract public investors. On the contrary, Carmel argues it reflects a maturing ecosystem that is better equipped to support founders building more complex, ambitious, and often capital-intensive enterprises.
Several factors contribute to this trend. Firstly, the regulatory burden and compliance costs associated with being a public company have increased significantly, particularly since the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010. These regulations, while designed to protect investors, have added layers of complexity and expense that can be particularly onerous for younger, still-evolving companies. Staying private allows companies to defer these costs and focus resources on product development, market expansion, and strategic growth without the quarterly pressures of public reporting.
Secondly, the sheer volume and sophistication of private capital available today are unprecedented. The venture capital landscape has diversified beyond traditional early-stage funds to include mega-funds, growth equity firms, corporate venture capital arms, family offices, and sovereign wealth funds. This expanded pool of private capital means companies no longer need to access public markets to secure the funding required for significant scale. Instead, they can raise ever-larger private rounds, often at valuations that rival or exceed those of many publicly traded companies. Data from PitchBook consistently shows that the average time to IPO has steadily climbed from approximately 4 years in the late 1990s to over 11 years by the late 2010s, with many companies opting to remain private even longer. The median age of companies at IPO in 2023, for instance, hovered around 10-12 years, starkly contrasting with historical norms.
This evolution has given rise to a more sophisticated and flexible "capital stack." This multi-layered funding structure integrates primary venture capital, growth equity, venture debt, and critically, a robust secondaries market. Together, these diverse capital sources provide the patient, long-horizon funding necessary for companies embarking on multi-decade journeys. The increasing prevalence of secondary capital within IPOs themselves – where existing shareholders sell a portion of their holdings during the public listing – further underscores how integral these mechanisms have become to the modern liquidity event. It signals a quiet but profound transformation of the public listing process itself, acknowledging the long private runways these companies have navigated.
The Indispensable Role of Secondaries in the Innovation Economy
For many years, the secondaries market was viewed as a peripheral, almost opportunistic, corner of venture capital. Jared Carmel was among the earliest proponents to articulate its inevitable ascent to a central role in supporting American innovation, a conviction that has been thoroughly validated by market trends. Today, secondaries are not merely supporting the venture ecosystem; they are an indispensable pillar of its functionality and resilience.
The logic underpinning this assertion is straightforward and compelling. When a company is genuinely committed to long-term value creation, every additional year spent privately allows for compounding growth, deeper product development, and stronger market positioning. A vibrant secondary market provides companies with this crucial time. It enables early employees, whose equity grants might represent a significant portion of their net worth, to realize partial liquidity without compelling the company into a public offering before it is operationally or strategically ready. This preserves employee morale and retention, allowing key talent to remain engaged while still benefiting from their hard-earned equity.
Furthermore, a healthy secondary market helps maintain healthy cap tables. It allows early investors, who might have specific fund timelines or portfolio rebalancing needs, to exit or reduce their positions, making way for new, long-horizon investors. These new investors often bring fresh conviction, strategic insights, and additional capital precisely when a company needs reinforcement to tackle its next phase of growth. This dynamic prevents "stale" capital from stifling a company’s progress and ensures that capital flows efficiently to where it can have the greatest impact. According to reports from firms like Setter Capital and Greenhill, the global secondary market transaction volume has grown from tens of billions in the early 2010s to over $100 billion annually in recent years, reflecting its expanding role and acceptance. Dedicated secondary funds have proliferated, raising billions of dollars specifically for these types of transactions.
Supporting the Strategic Companies America Needs
Beyond merely facilitating liquidity, the deeper implication of these extended private journeys, according to Carmel, lies in the nature of the companies being built. MVP primarily focuses its investments on critical sectors: artificial intelligence, defense, space, supply chain, and frontier compute. These are not businesses designed for a quick exit or a short-term profit cycle. They represent twenty-year journeys, demanding immense capital, profound technical expertise, and a willingness to plan in decades rather than quarters. Many of these ventures carry significant implications for national security and economic competitiveness.
Carmel traces his own heightened conviction on this point back to the global supply-chain shock triggered by the COVID-19 pandemic. The crisis starkly revealed the United States’ precarious reliance on external sources for critical goods, from essential medications to N95 masks. This experience crystallized a trend he had observed for years: the quiet outsourcing of strategic capabilities that the nation could not afford to lose. The companies now emerging to rebuild and fortify this capacity share a common profile: they are deeply technical, require patient, substantial capital, and operate with a long-term strategic vision.
These enterprises often address complex problems with no easy solutions, necessitating extensive research and development, protracted regulatory approvals, and significant infrastructure build-outs. Consider the development of advanced AI models, next-generation space launch systems, or resilient domestic manufacturing for critical components. These are monumental undertakings that cannot be rushed. The venture industry’s adaptation to support these longer journeys is not merely a financial adjustment; it is a strategic imperative for the nation.
For MVP, "being helpful" to these founders transcends merely writing a check. It involves deep engagement, providing strategic guidance, and staying committed through the often-difficult "long middle" of a company’s journey, when validation may be distant and the work most arduous. This means leveraging MVP’s network to facilitate board introductions with expertise in critical sectors like defense and national security, connecting companies with experienced operating leaders who can scale complex organizations, and demonstrating a steadfast willingness to remain invested for the duration. The emphasis is on partnership and long-term alignment, fostering trust that positions MVP as a strategic advisor rather than just a transaction facilitator.
Optimism for the Future of American Innovation
When asked about the driving force behind his continued dedication, Carmel offers a two-fold answer. Personally, he expresses a profound sense of privilege in spending his career immersing himself in a dozen or more innovative companies each year, constantly learning from the visionary individuals who are building them. This intellectual engagement and exposure to cutting-edge technology fuels his passion.
On a broader scale, his optimism stems from a deep belief in America’s innovative capacity. "Technology is being built by more people than at any other moment in my career," he states, highlighting the democratized access to tools and knowledge that empowers a new generation of founders. In this context, the primary role of the venture capital industry is to ensure that capital flows efficiently and effectively, matching the immense potential of this widespread innovation.
The companies that American founders are building today are inherently longer-horizon and more capital-intensive than those of previous generations. They are tackling foundational challenges, from national security to global climate change, requiring sustained investment and unwavering commitment. The venture industry’s adaptation, spearheaded by firms like Manhattan Venture Partners and the institutionalization of the secondaries market, is crucial for supporting these ambitious undertakings. By providing flexible liquidity and patient capital, the industry empowers founders to pursue their visions without compromise, ensuring that America continues to lead in critical technological advancements. Keeping this vital capital flowing, through every stage of a company’s extended journey, remains the essential work that will underpin the nation’s economic vitality and strategic advantage for decades to come.
Manhattan Venture Partners, as an NVCA member, stands as a testament to this evolving landscape, embodying the dedication to fostering long-term American innovation. Further details on MVP’s work and investment thesis can be found at www.mvp.vc.
