The venture capital landscape has undergone a profound transformation over the past two decades, with one of the most significant shifts being the institutionalization and expansion of the secondary market. At the forefront of this evolution stands Jared Carmel, co-founder of Manhattan Venture Partners (MVP), a firm that has dedicated over a decade to building the foundational infrastructure for this crucial segment of the U.S. venture ecosystem. This movement is not merely a financial innovation; it represents a fundamental recalibration of how the industry funds, sustains, and supports high-growth American companies, particularly those embarking on multi-decade journeys in critical sectors.
A Prescient Vision Amidst Market Cycles: Reading the Tape Early
Jared Carmel’s journey into the intricate world of venture capital began at a challenging juncture. Graduating into the immediate aftermath of the dot-com bust in 2001, just weeks before the seismic events of September 11th, he was exposed early to the inherent volatility and cyclical nature of financial markets. This period, often characterized by widespread disillusionment with technology investments, instilled in Carmel a deep understanding that market patterns repeat and that overlooked sectors can re-emerge years later. His observations on the eventual resurgence of areas like telecom infrastructure and clean tech, long after they had been written off, laid the groundwork for a counter-cyclical and forward-looking investment philosophy.
A pivotal moment arrived in late 2009, a period that would prove to be a nascent stage for the future giants of social media and cloud computing. A friend, then an employee at Facebook, was preparing to leave the company and sought to liquidate some of his early-held shares. Carmel seized the opportunity, purchasing these shares at a valuation that, in retrospect, appears remarkably low. While he openly acknowledges the humor in no longer holding those specific shares, the transaction itself was a revelation. It occurred at a time when the concept of a secondary market for private company shares was virtually non-existent, largely unknown outside a small circle of insiders. "This was before the secondary markets were even a market. Before people knew it existed," Carmel recalls, highlighting the pioneering nature of his early endeavors.
From this initial foray, Carmel began to systematically provide liquidity for early employees and investors in what would become some of the most iconic technology companies of the era, including Facebook, Twitter, and Palantir. This hands-on experience in a nascent market led him to G Squared, a firm known for its growth equity investments. However, it was in 2014 that Carmel, alongside his co-founders, established Manhattan Venture Partners with a clear and ambitious conviction: the secondary market for private company shares required institutionalization. This meant applying the same rigorous diligence, discipline, and underwriting standards traditionally associated with primary venture capital firms, thereby elevating secondaries from a niche, often perceived as a market of last resort, to a respected and integral component of the venture ecosystem.
The Evolving Landscape of American Innovation: Longer Journeys and Flexible Capital
The past decade has witnessed a quiet but profound evolution within the American venture industry, primarily driven by a new reality: the companies founders are now building demand significantly longer maturation periods. Today, it is not uncommon for some of the largest and most impactful private companies to exist as private entities for well over a decade, with some approaching or even exceeding two decades without entering public markets. This trend, often misinterpreted as a sign of market distress or a "closed IPO window," is viewed by Carmel through a different lens. He posits that it is, in fact, an indicator of founders pursuing more ambitious, complex, and foundational challenges, and that the venture industry has commendably adapted to support these extended timelines.
"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. This perspective challenges conventional wisdom, suggesting that the primary driver for staying private is strategic choice rather than necessity. Companies are choosing to delay public offerings to maintain greater control, avoid the quarterly pressures of public markets, and continue investing heavily in long-term growth and innovation without the intense scrutiny often accompanying public listings. Regulatory burdens, such as those imposed by Sarbanes-Oxley, have also contributed to making public markets less attractive for rapidly growing, yet still maturing, enterprises.
In response to this phenomenon, a more sophisticated and flexible capital stack has emerged. This multi-layered funding structure integrates secondary markets, robust growth equity rounds, and a diverse base of late-stage investors, collectively providing the patient, long-horizon capital essential for supporting these twenty-year journeys. Data from PitchBook and other industry trackers consistently illustrate the increasing average time to IPO for venture-backed companies. In the late 1990s, the average time to IPO was often less than five years. By the 2010s, this figure had stretched to over seven years, and in the current decade, it frequently exceeds ten years, with many companies opting for direct listings or remaining private indefinitely. This trend is evident in the sustained private status of giants like SpaceX, Stripe, and Epic Games, which continue to attract massive private capital injections.
Moreover, the integration of secondary capital directly within IPOs themselves has grown, a subtle yet significant indicator of how the public listing event has evolved. These "secondary-heavy IPOs" allow existing shareholders to realize liquidity while also bringing in new capital, demonstrating the fluidity between private and public market mechanisms. This shift underscores the increasing comfort and sophistication with which both founders and investors view secondary transactions not as an exit of last resort, but as a strategic tool within a company’s capital strategy.
The Indispensable Role of Secondaries in the Innovation Economy
For many years, the secondary market was largely relegated to a niche corner of venture capital, often associated with distressed assets or limited partner portfolio adjustments. Jared Carmel, however, was among the earliest proponents to argue that secondaries would ascend to a much more central and critical role in the industry’s capacity to foster American innovation. This conviction has not only aged well but has become a widely accepted truth across the venture landscape.
"Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of the venture ecosystem," Carmel emphasizes. The rationale behind this assertion is straightforward and compelling. When a company is genuinely committed to building for the long term, every additional year spent as a private entity represents another year of compounding capability, shielded from public market pressures. A robust and liquid secondary market grants these companies the invaluable gift of time. It allows early employees, who often hold significant equity, and early investors to achieve partial or full liquidity without compelling the company into a premature public offering. This flexibility is crucial for talent retention and incentivization, ensuring that key individuals can realize returns on their hard work without being forced to wait for an often unpredictable IPO timeline.
Furthermore, a healthy secondary market helps maintain healthy capitalization tables. It provides an avenue for early investors to manage their fund lifecycles and rebalance portfolios, while simultaneously allowing new, long-horizon investors to enter with fresh capital and conviction at moments when a company might most need reinforcement or a new strategic partner. This infusion of new capital and perspective can be vital during challenging growth phases. Ultimately, this dynamic empowers founders to continue building towards truly category-defining outcomes, aligning with the long-standing ethos of the U.S. venture industry to support ambitious, transformative endeavors.
According to data from secondary market platforms and investment banks, the global volume of secondary transactions has seen exponential growth over the past decade. In 2022, secondary market transactions in venture capital reached an estimated $100 billion, a significant leap from just a few billion dollars annually in the early 2010s. This includes both LP-led secondaries (where limited partners sell their stakes in venture funds) and increasingly, GP-led secondaries (where general partners restructure their funds to provide liquidity to existing LPs while holding onto promising portfolio companies). This burgeoning market underscores its increasing importance as a liquidity mechanism and a strategic tool for capital management within the private markets.
Supporting the Companies America Needs: National Security and Economic Competitiveness
Beyond financial mechanisms, the deeper question for any observer of the venture industry is the nature of the "long-horizon" companies being built and supported. Carmel’s answer points directly to sectors of immense strategic importance, which MVP primarily targets: artificial intelligence, defense, space, supply chain resilience, and frontier compute. These are not merely three-year or ten-year ventures; they represent twenty-year journeys with 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, linking the extended timelines to the inherent complexity and societal impact of these undertakings. His conviction on this point crystallized during the COVID-19 pandemic, when the fragility of global supply chains became starkly apparent, particularly concerning essential goods like medications and N95 masks. This crisis underscored a trend Carmel had observed for years: the quiet outsourcing of strategic capabilities that the United States could ill afford to lose.
The companies now being built to re-establish and strengthen these critical capacities share a common profile. They demand deep, patient capital, access to world-class technical talent, and a fundamental willingness to plan in decades rather than quarters. These characteristics necessitate a venture industry that is equally committed to long-term partnership. Showing up for these founders, in Carmel’s view, extends far beyond merely writing a check. It involves unwavering support and guidance throughout the arduous, multi-year process of development and scaling.
"Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," Carmel states, emphasizing a relationship-centric approach. For MVP, this translates into providing tangible value: facilitating board introductions with deep expertise in critical sectors like defense and national security, connecting companies with seasoned operating leaders capable of scaling complex organizations, and demonstrating a steadfast willingness to remain invested through the often challenging "long middle" of a company’s journey, when the work is hardest and external validation may be furthest away. This commitment to long-term engagement fosters trust and enables founders to navigate the inherent uncertainties of building truly transformative enterprises.
Optimism for the Future of American Innovation
When asked about the driving force behind his continued dedication to this demanding work, Jared Carmel offers a dual perspective. Personally, he finds immense satisfaction in the unique opportunity to delve deeply into a dozen or more companies each year, constantly learning from the visionary individuals who are building the future. Beyond the personal, however, lies a profound optimism for 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," Carmel declares. This statement encapsulates the core mission of the U.S. venture industry: to act as a vital conduit, ensuring that the burgeoning wave of technological innovation across the country is adequately fueled. Having witnessed multiple boom-and-bust cycles, Carmel’s optimism is grounded in a deep understanding of market dynamics and the resilience of American entrepreneurship.
The venture industry has demonstrably adapted to support the longer-horizon, more capital-intensive companies that American founders are building today. The evolution of the secondary market, in particular, stands as a testament to this adaptability, providing essential liquidity and flexibility that enables these ambitious journeys. Keeping capital flowing effectively to these companies, through every stage of their extended development, is not just a business imperative for firms like MVP; it is a critical endeavor for safeguarding and enhancing America’s leadership in innovation, national security, and economic prosperity.
Manhattan Venture Partners’ commitment to this institutionalization and strategic support makes them a vital component of the broader venture ecosystem, contributing significantly to the sustained growth and success of the next generation of American companies.
