The evolving landscape of U.S. venture capital, marked by companies taking longer to mature and remaining private for extended periods, has propelled the secondary market from a niche corner to an indispensable component of the innovation ecosystem. 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 shift. MVP’s vision extends beyond mere capital provision, focusing on enabling long-horizon investments in strategically vital sectors critical for national security and economic competitiveness.
Early Visionary: Reading the Market Before the Curve
Jared Carmel’s journey into the world of venture capital secondaries began amidst a challenging economic backdrop, graduating into the tail end of the dot-com bust in 2001, just weeks before the September 11th attacks. This formative period instilled a crucial lesson: markets are cyclical, and patterns, though often forgotten, inevitably repeat. Carmel observed how sectors once dismissed—from SPACs to telecom infrastructure and clean tech—re-emerged years later, underscoring the importance of long-term perspective and contrarian thinking.
A pivotal moment arrived in late 2009. A friend, an early Facebook employee, was getting married and leaving the company, seeking to liquidate some of his shares. Carmel seized the opportunity, purchasing these shares at a modest valuation, a transaction he now humorously recounts as having divested from prematurely. However, this personal transaction was more than just an investment; it was an epiphany. "This was before the secondary markets were even a market. Before people knew it existed," Carmel recalls, highlighting the nascent stage of an industry that would soon become central to venture finance. This experience illuminated a significant unmet need: a structured mechanism for providing liquidity to early employees and investors in high-growth private companies.
Following this insight, Carmel began actively facilitating liquidity for individuals at burgeoning tech giants such as Facebook, Twitter, and Palantir. This early work laid the foundation for his expertise, eventually leading him to G Squared, a prominent growth equity firm. By 2014, armed with a deep understanding of private markets and a conviction that the secondary market demanded greater rigor and transparency, Carmel co-founded Manhattan Venture Partners. His core belief, now widely validated across the industry, was that secondaries needed to be institutionalized—governed by the same stringent diligence, discipline, and underwriting standards as any serious primary venture capital firm. This foresight positioned MVP as a pioneer in developing a robust, credible secondary market.
The Evolution of Venture Capital: A Longer Runway for Innovation
The American venture industry has undergone a profound, albeit quiet, evolution over the past decade, adapting to a new reality where companies require significantly longer periods to achieve maturity. Today, it is not uncommon for some of the largest private companies to operate for fifteen, even twenty years, before considering a public listing. This extended private lifecycle is not, as some might perceive, a signal of distress in the capital markets. Instead, Carmel posits it as a testament to founders tackling more ambitious and complex challenges, and the industry’s successful adaptation to support these extended journeys.
"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 closed IPO window signifies market weakness. Instead, it points to the remarkable depth and flexibility of today’s private capital markets. Data from PitchBook and NVCA supports this, showing that the median time to IPO for venture-backed companies has steadily increased from approximately 5-7 years in the early 2000s to over 10-12 years in the 2020s. This trend is driven by several factors:
- Abundant Private Capital: The proliferation of growth equity funds, corporate venture arms, and sovereign wealth funds has provided private companies with access to vast sums of capital, reducing the urgency to tap public markets for funding.
- Reduced Regulatory Burden: Remaining private allows companies to avoid the onerous reporting requirements, quarterly earnings pressures, and increased scrutiny associated with public market listing, enabling them to focus purely on long-term strategic execution.
- Strategic Control: Founders and early investors often prefer to maintain greater control over their company’s vision and operations, which can be diluted by the demands of public shareholders.
- Market Volatility: Public market volatility can make IPO timing challenging, leading companies to wait for more favorable conditions, often while continuing to raise private capital.
What has emerged in this environment is a more sophisticated and flexible capital stack. Secondary markets, growth equity, and a diverse base of late-stage investors now collectively provide the patient, long-horizon capital essential for these multi-decade journeys. Even within IPOs themselves, secondary capital offerings have grown, indicating a further evolution of the public listing event. This quiet integration of secondary sales into IPOs allows existing shareholders to realize liquidity while new public investors simultaneously participate, demonstrating the seamless blending of private and public market mechanisms.
Secondaries Market: A Core Pillar of the Modern Venture Ecosystem
For many years, secondaries were regarded as a peripheral, opportunistic corner of the venture landscape, often associated with distressed assets or niche transactions. Jared Carmel, however, was among the earliest and most vocal proponents arguing that secondaries would become fundamentally central to the industry’s capacity to fuel American innovation. That conviction has proven remarkably prescient. Today, the secondary market is a robust, multi-billion-dollar segment of venture capital, with a diverse array of participants and increasingly standardized practices. According to reports from firms like Setter Capital and Greenhill, global secondary market transaction volume for private assets has grown substantially, often exceeding $100 billion annually in recent years, with venture secondaries constituting a significant and growing portion of this.
"Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of the venture ecosystem," Carmel emphasizes. The rationale behind this elevation is straightforward and compelling:
- Extended Compounding Capability: For companies genuinely building for the long term, every additional year of private runway allows for further compounding of capabilities, market penetration, and technological development without the pressures of short-term public market expectations.
- Liquidity Without Exit Pressure: A robust secondary market provides crucial liquidity for early employees and initial investors. This allows them to realize returns on their investments and hard work without forcing the company into a premature public offering before its business model is fully validated or scaled. This is particularly vital for retaining top talent, as employees can monetize vested equity without having to leave the company or wait indefinitely for an IPO.
- Healthy Cap Tables: By enabling orderly sales of shares, secondaries help maintain healthy cap tables. This prevents situations where early investors or founders might hold onto large blocks of shares due to a lack of liquidity, potentially stifling new investment or creating misalignment as the company matures.
- Fresh Conviction Capital: Secondary transactions bring new, long-horizon investors into a company’s capital structure at moments when fresh conviction and growth capital are most needed. These new investors often bring not just funds but also strategic guidance and networks aligned with the company’s later stages of development.
- Founder Empowerment: Ultimately, the robust secondary market empowers founders to continue building towards category-defining outcomes, leveraging the patient capital that the U.S. venture industry has historically championed, but now with enhanced flexibility and optionality for all stakeholders.
Strategic Imperatives: Investing in America’s Future
Beyond the structural benefits, the deeper question for any observer of the venture industry is what these long-horizon companies are actually building. Jared Carmel’s answer points to critical sectors where MVP primarily invests: artificial intelligence, defense technology, space exploration, supply chain resilience, and frontier compute. These are not merely high-growth areas; they represent strategic imperatives for national security and economic competitiveness. They demand patient capital and a long-term perspective, often requiring multi-decade journeys rather than typical 3-5 year venture cycles.
"The companies are going to need to build longer because they have more to build," Carmel explains, underscoring the complexity and foundational nature of innovations in these fields. Consider the development cycles in advanced AI, which requires immense computational resources and years of research; or next-generation defense systems, which involve rigorous testing and regulatory hurdles; or space infrastructure, where projects span decades. These are capital-intensive endeavors with profound societal and geopolitical implications.
Carmel traces his personal conviction regarding these sectors back to the COVID-19 pandemic and the ensuing supply-chain shock. The inability of the United States to reliably source essential medications or N95 masks laid bare a critical vulnerability: the quiet outsourcing of strategic capabilities that the nation could not afford to be without. This crisis crystallized a trend he had been observing for years. The companies now emerging to rebuild and strengthen these capacities share a common profile: they demand significant capital, exceptional technical talent, and a willingness to plan in decades, not quarters. Investment in areas like advanced manufacturing, resilient logistics, and domestic semiconductor production exemplifies this shift towards strategic self-reliance. For instance, the CHIPS and Science Act, a bipartisan effort to boost domestic semiconductor manufacturing, highlights the national consensus around rebuilding these critical supply chains.
Beyond Capital: The Role of Patient Partnership
This last requirement—the willingness to plan in decades—is precisely what the venture industry has had to grow into. For firms like MVP, simply writing a check is no longer sufficient. Showing up for these founders means staying alongside them through long stretches of difficult, often unglamorous, work. It requires a different kind of engagement, one that prioritizes partnership over transactional speed.
"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 built on trust and proactive support. For MVP, this translates into tangible actions: facilitating board introductions with deep expertise in critical sectors like defense, national security, and complex logistics; connecting growing companies with seasoned operating leaders who can help navigate scaling challenges; and demonstrating a steadfast willingness to remain invested through the arduous "long middle" of a company’s journey—the period when the work is hardest, validation is often furthest away, and patience is most severely tested. This hands-on, long-term approach aligns with the institutionalization of secondaries, ensuring that the capital provided is not just smart, but also steadfast.
Outlook: Sustaining the Flow of Innovation Capital
When asked about his enduring optimism, Jared Carmel offers a two-fold answer. The first is deeply personal: he finds immense satisfaction in the intellectual rigor of his work, spending his career delving into a dozen or more companies each year, constantly learning from the visionary individuals building them. The second, broader answer, speaks to the trajectory of the nation itself.
"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 declares. This perspective underscores a fundamental truth about the current era: innovation is democratized and accelerating across an unprecedented breadth of disciplines and geographies. The American venture industry’s critical role, as articulated by Carmel, is to act as a vital circulatory system, ensuring that capital—both primary and secondary—reaches these innovators at every stage of their journey.
This is the compelling case for the U.S. venture industry, articulated by a seasoned observer who has navigated multiple market cycles, booms, and resets. The companies American founders are building today are frequently longer-horizon and more capital-intensive than those of a generation ago, addressing challenges that are often fundamental to societal progress and national resilience. The industry’s successful adaptation, particularly through the institutionalization of the secondaries market, is not merely a financial innovation; it is a strategic imperative. Keeping capital flowing to these companies through every demanding stage of their journey—from nascent idea to global impact—remains the essential work, ensuring that America continues to lead in the global innovation race.
Manhattan Venture Partners, through its pioneering work in the secondaries market, stands as a testament to this adaptive spirit, proud to be a member of the NVCA and a critical enabler of the next generation of American enterprise. To learn more about MVP, visit www.mvp.vc.
