In a significant evolution of the American venture capital landscape, the secondary market has transcended its niche origins to become a foundational pillar supporting long-lived, high-growth companies. 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 institutional infrastructure necessary for this pivotal shift. Through a blend of foresight, disciplined underwriting, and a deep understanding of market cycles, Carmel and MVP have not only validated the necessity of secondary markets but have also positioned them as crucial enablers for innovation in sectors vital to national security and economic competitiveness.
The Genesis of a Vision: Reading the Market Tape
Jared Carmel’s journey into the intricate world of venture capital secondaries began in an unlikely crucible: the turbulent aftermath of the dot-com bust, just weeks before the seismic events of September 11, 2001. Graduating into an exceptionally challenging job market, Carmel gleaned an invaluable, albeit harsh, initial lesson: understanding what not to do. This foundational experience instilled a profound appreciation for market cyclicality, a conviction that patterns repeat, and that seemingly discarded sectors—from SPACs to telecom infrastructure and clean tech—often re-emerge years later, reinvented and revitalized. This early exposure to market volatility and resilience shaped his contrarian yet ultimately prescient investment philosophy.
A critical turning point arrived in late 2009. The burgeoning social media giant, Facebook, was still a private entity, but its early employees were beginning to seek liquidity. When a friend, an early Facebook employee, sought to sell some of his shares before leaving the company, Carmel seized the opportunity, purchasing them at a modest valuation. While he humorously acknowledges no longer owning those specific shares, the transaction itself was a revelation. "This was before the secondary markets were even a market. Before people knew it existed," Carmel recalls, highlighting the nascent stage of what would soon become a multi-billion-dollar industry. This initial foray into providing liquidity for early employees at then-private tech behemoths like Facebook, Twitter, and Palantir laid the groundwork for his eventual tenure at G Squared, a prominent growth equity firm, before co-founding Manhattan Venture Partners in 2014.
The Institutionalization Imperative: Elevating Secondary Markets
Carmel’s experience solidified a conviction that was then far from mainstream: the secondary market, traditionally viewed with skepticism or as a domain for distressed assets, needed to be institutionalized. This meant applying the same rigorous diligence, financial discipline, and underwriting standards characteristic of established primary venture capital firms. His vision was to transform the buying and selling of private company shares from an ad hoc, often opaque process into a transparent, efficient, and respected segment of the broader venture ecosystem.
Historically, secondary transactions often carried a stigma, perceived as signals of distress from selling shareholders or a lack of confidence in a company’s future prospects. However, Carmel and MVP recognized the immense potential for secondaries to serve as a vital mechanism for portfolio management, liquidity generation, and capital reallocation without forcing premature public offerings. Their commitment to institutionalizing this market involved developing robust valuation methodologies, establishing clear legal frameworks, and fostering trust among both sellers and buyers, thereby legitimizing secondary transactions as a strategic tool for all stakeholders.
The Evolving Landscape of Venture: Longer Journeys, Deeper Capital Stacks
The past decade has witnessed a quiet but profound evolution in 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 for some of the largest and most impactful private companies to operate for well over a decade, even two, before considering an initial public offering (IPO) or other exit strategies.
This extended private tenure, Carmel argues, is not a symptom of market weakness or a "closed IPO window" but rather a testament to the ambition and complexity of modern innovation. "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 the conventional wisdom that a swift IPO is the ultimate measure of success, instead positing that prolonged private growth allows companies to fully realize their potential, build defensible moats, and execute on long-term strategic visions unburdened by quarterly public market pressures.
Indeed, data from industry analysts corroborates this trend. Over the past two decades, the average time from a company’s founding to its IPO has steadily increased, from an average of around five years in the late 1990s to well over ten years in recent times. This elongation is attributed to several factors, including the increasing availability of sophisticated private capital, the growing regulatory burden and compliance costs associated with public listings (such as Sarbanes-Oxley), and a desire by founders to maintain control and strategic flexibility for longer periods.
In response, a more sophisticated and flexible capital stack has emerged. This ecosystem now seamlessly integrates primary venture funding, growth equity, diverse late-stage investors, and, crucially, robust secondary markets. This multi-layered approach provides the patient, long-horizon capital essential for supporting companies on twenty-year journeys. Secondary capital’s growing presence even within IPOs themselves—where existing shareholders might sell a portion of their holdings alongside the company’s primary offering—is a subtle yet powerful indicator of how thoroughly this market mechanism has integrated into the broader capital formation process. This flexibility allows companies to access capital and provide liquidity to early stakeholders without disrupting their long-term development trajectory.
Why Secondaries are Indispensable to the Innovation Economy
For many years, the secondary venture market was relegated to a niche, often misunderstood corner of finance. Jared Carmel, however, was among the earliest and most vocal proponents arguing for its centrality to the industry’s capacity to fuel American innovation. That conviction has proven remarkably prescient. "Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," he states, emphasizing their transformative impact.
The rationale behind this growing importance is straightforward and compelling. When a company is genuinely committed to long-term development, every additional year spent privately compounding its capabilities significantly enhances its ultimate value and impact. A robust secondary market provides this invaluable runway. It empowers early employees, who might otherwise face golden handcuffs, to realize liquidity from their equity holdings without compelling the company to prematurely go public. This not only serves as a critical retention tool for talent but also allows these individuals to reinvest capital, fueling new ventures and fostering a dynamic entrepreneurial ecosystem.
Similarly, early investors can manage their portfolios effectively, recycling capital into new opportunities without forcing an exit event for a promising company that is still in its growth phase. This flexibility maintains healthy cap tables, preventing "stale" capital from stifling a company’s progress. Furthermore, the entry of new, long-horizon investors via secondaries can inject fresh capital, expertise, and conviction precisely when a company needs reinforcement to tackle its next phase of growth. This symbiotic relationship ensures that founders can continue building towards category-defining outcomes, a hallmark of the U.S. venture industry’s historical success.
The growth of the secondary market itself offers compelling evidence of its rising prominence. Industry reports indicate that the global secondary market for venture capital has seen dramatic increases in transaction volume and assets under management (AUM) over the past five to seven years, often growing at a faster rate than the primary market during certain periods. This expansion is driven by a diverse set of participants, including institutional investors, family offices, and dedicated secondary funds, all seeking exposure to high-growth private companies while also providing liquidity solutions.
Supporting the Companies America Needs: A Strategic Imperative
Beyond the financial mechanics, Carmel and MVP’s strategic focus illuminates a deeper, more profound purpose for the venture industry. The "deeper question," as Carmel frames it, for anyone seeking to understand venture’s role, is what these long-horizon companies are actually building. MVP’s investment thesis centers on critical sectors: artificial intelligence, defense, space, supply chain, and frontier compute. These are not merely three-year or ten-year ventures; they are twenty-year journeys, often carrying profound implications for national security, economic sovereignty, and global competitiveness.
"The companies are going to need to build longer because they have more to build," Carmel explains, underscoring the inherent complexity and capital intensity of these endeavors. The development of advanced AI models, resilient defense technologies, sophisticated space infrastructure, localized supply chains, and next-generation computing paradigms demands sustained investment, protracted research and development, and a long-term strategic outlook. These are not projects amenable to short-term financial pressures.
Carmel traces his conviction on this back to the profound shock of the COVID-19 pandemic, specifically the acute supply-chain disruptions that revealed America’s alarming vulnerabilities in sourcing essential medications and N95 masks. This crisis crystallized a trend he had been observing for years: the quiet outsourcing of strategic capabilities that the nation could ill afford to lose. The companies now being built to re-shore and rebuild this critical capacity share a common profile: they require deep pools of patient capital, access to top-tier technical talent, and a willingness to plan in decades rather than fiscal quarters.
This last requirement represents a significant maturation for the venture industry itself. Showing up for these founders extends far beyond merely writing a check; it necessitates staying alongside them through long stretches of difficult, often unglamorous work. MVP’s engagement philosophy embodies this commitment. "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," Carmel emphasizes. This means providing strategic support that goes beyond capital, including making invaluable 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 a willingness to remain invested through the arduous "long middle" of a company’s journey, when validation may be distant and the work most challenging.
Optimism for the Future of American Innovation
When asked what fuels his enduring commitment to this work, Carmel offers a two-fold answer. Personally, he finds immense satisfaction in the privilege of immersing himself in a dozen or so innovative companies each year, learning directly from the visionary individuals who are building them. This intellectual curiosity and direct engagement with cutting-edge technology remain powerful motivators.
On a broader scale, his optimism stems from a profound belief in the nation’s innovative capacity. "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 perspective, forged through several market booms and resets, forms the core argument for the continued evolution of the U.S. venture industry. The companies American founders are building today are often more ambitious, longer-horizon, and more capital-intensive than those of a generation ago. The industry, through the likes of MVP and the institutionalization of secondary markets, has adapted to provide the robust and flexible capital ecosystem necessary to support these endeavors. Ensuring the continuous flow of capital to these critical companies, through every stage of their protracted journeys, is the essential work that will define America’s leadership in the innovation economy for decades to come.
Manhattan Venture Partners, through its pioneering efforts and unwavering conviction, stands as a testament to this evolving landscape. By championing the institutionalization of secondary markets, MVP is not just facilitating financial transactions; it is actively shaping the future of venture capital, enabling the growth of companies that are fundamental to the nation’s strategic interests and long-term prosperity.
