In an evolving landscape where innovation often demands extended development cycles and substantial capital, the venture capital industry has witnessed a profound shift, increasingly relying on sophisticated mechanisms to support long-lived, high-growth companies. Central to this transformation is the rise of the secondaries market, a segment once considered niche but now recognized as a critical pillar of the venture ecosystem. This development is exemplified by the work of figures like 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 market’s maturation. Carmel’s journey, from navigating post-dot-com bust uncertainties to pioneering liquidity solutions for early technology giants, offers a compelling narrative of foresight and strategic adaptation within the dynamic world of venture finance.
The Genesis of a Vision: Reading Market Signals in a Nascent Era
Jared Carmel’s entry into the professional world coincided with a period of significant economic volatility: the tail end of the dot-com bubble burst in 2001, followed closely by the September 11th attacks. This challenging environment, far from deterring him, instilled a profound understanding of market cycles and the cyclical nature of industry trends. Lessons learned from the downturns of sectors like telecom infrastructure and clean tech, which later experienced resurgences, underscored the importance of long-term perspective and the ability to identify value where others saw only decline. This early exposure to market fluctuations proved instrumental in shaping his future convictions.
A pivotal moment arrived in late 2009. The burgeoning social media giant Facebook, then a private company, was beginning to attract widespread attention. Carmel’s friend, an early employee, sought to sell some of his shares as he prepared to leave the company. Recognizing an opportunity, Carmel acquired these shares at a modest valuation of a few dollars apiece. While he candidly admits to no longer holding those particular shares – a common anecdote among early investors in now-trillion-dollar companies – the transaction itself was revelatory. "This was before the secondary markets were even a market. Before people knew it existed," Carmel recalls, highlighting the uncharted territory he was venturing into.
This initial foray into facilitating liquidity for early employees sparked a new direction for Carmel. He began systematically providing an exit path for personnel at rapidly growing private companies such as Facebook, Twitter, and Palantir. This nascent activity laid the groundwork for what would become a formalized segment of venture finance. His early success led him to join G Squared, a firm that would become known for its significant investments in late-stage private technology companies. The experience gleaned from these early transactions underscored a fundamental unmet need in the market: a structured, reliable mechanism for early stakeholders to realize value from their illiquid private holdings.
Manhattan Venture Partners and the Institutionalization of Secondaries
The conviction that the secondary market required institutionalization—a belief that has since gained widespread acceptance across the venture capital industry—led Jared Carmel to co-found Manhattan Venture Partners (MVP) in 2014. The founding principle of MVP was to build a secondary market firm grounded in the same rigorous diligence, discipline, and underwriting standards traditionally applied by primary venture firms. This commitment to institutional quality was a direct response to the market’s previous ad-hoc nature, aiming to provide transparency and reliability to transactions involving private company shares.
The growth of the secondary market since MVP’s inception has been remarkable. Data from industry sources like Preqin and PitchBook consistently illustrate this expansion. For instance, the total value of secondary transactions in venture capital has grown exponentially over the last decade, often reaching tens of billions of dollars annually. In 2023, while overall venture funding saw a dip, secondary transactions demonstrated resilience, with many analysts pointing to their increasing strategic importance. This market provides crucial liquidity, allowing early investors and employees to de-risk their positions without forcing companies into premature public offerings. The emergence of specialized funds and sophisticated platforms dedicated to secondaries further solidifies its position as a mature segment of the financial landscape.
MVP’s strategy has been to facilitate these complex transactions, offering solutions for both sellers seeking liquidity and buyers looking to gain exposure to high-growth private companies. This involves intricate financial engineering, legal expertise, and a deep understanding of the underlying companies’ fundamentals. The firm’s role has been instrumental in normalizing the perception of secondaries, transforming them from a last-resort option into a strategic tool for capital management within the venture ecosystem.
The Longer Journey: Why Companies Stay Private
One of the most significant shifts in the American venture industry over the past decade has been the extended lifecycle of private companies. It is no longer uncommon for promising ventures to remain private for fifteen, twenty, or even more years before considering a public listing. Today’s largest private companies, often valued in the tens of billions, have spent considerable time refining their products, scaling their operations, and building substantial market share away from the glare and pressures of public markets.
Carmel posits that this phenomenon is not indicative of distress or a "closed IPO window" due to unfavorable market conditions. Rather, he asserts, "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 perspective challenges conventional wisdom, suggesting that the primary drivers are the increasing complexity of the problems founders are solving, coupled with the ample availability of private capital.
Supporting data highlights this trend: The average time to IPO for venture-backed companies in the U.S. has steadily increased. In the early 2000s, it was often less than five years; by the late 2010s and early 2020s, it had stretched to over ten years for many tech companies. Companies like Palantir (founded 2003, IPO 2020), Airbnb (founded 2008, IPO 2020), and Stripe (founded 2010, still private) exemplify this trend. This extended private runway allows companies to achieve greater maturity, build more robust business models, and accumulate significant intellectual property before facing the quarterly scrutiny of public shareholders.
The motivations for remaining private are multifaceted. Founders often prefer to maintain control over strategic decisions and avoid the regulatory burdens, reporting requirements, and short-term earnings pressures associated with being a public company. Moreover, the sheer volume of private capital available—from traditional venture capital funds, growth equity firms, sovereign wealth funds, and increasingly, family offices and institutional investors—has provided a viable alternative to public markets for funding expansion and innovation. This access to patient, long-horizon capital is critical for companies tackling ambitious, long-term challenges.
A Refined Capital Stack: The Role of Secondaries in Modern Venture
The extended private lifecycles have necessitated the development of a more sophisticated and flexible capital stack. In this evolved ecosystem, secondary markets play an indispensable role alongside traditional primary venture funding, growth equity, and a diverse base of late-stage private investors. This comprehensive approach ensures that companies can access the patient, long-horizon capital required for journeys spanning two decades or more.
Secondary transactions provide crucial flexibility within this capital stack. They enable early employees, who often hold significant equity, to monetize a portion of their holdings without having to wait for a distant IPO or acquisition. This liquidity can be vital for personal financial planning, allowing individuals to diversify their wealth or cover major life expenses. Similarly, early-stage investors, who might have held positions for over a decade, can achieve partial or full exits, returning capital to their limited partners and freeing up funds for new investments. This mechanism maintains healthy capital tables and ensures that key stakeholders remain motivated and aligned with the company’s long-term vision.
Moreover, the growth of secondary capital flowing into IPOs themselves is a quiet but significant indicator of the market’s evolution. Increasingly, secondary share sales are incorporated into public listings, allowing existing shareholders to sell shares alongside the company’s primary offering. This dual-track approach provides immediate liquidity for early backers while simultaneously raising capital for the company’s continued growth, reflecting a hybrid model that maximizes benefits for all parties. Industry analysts often highlight this trend as a testament to the sophistication now present in public market debuts, where secondaries are no longer an afterthought but an integrated component of the listing strategy.
Secondaries as a Pillar of the Innovation Economy
For many years, the secondaries market was viewed as a specialized, even obscure, corner of venture capital. Jared Carmel was among the earliest to foresee its transformation into a central force supporting American innovation. His conviction has been thoroughly validated by market trends. "Secondaries are not just supporting the venture ecosystem. They are becoming a key pillar of venture ecosystem," he states, emphasizing their fundamental importance.
The rationale is compelling and straightforward: when a company is genuinely committed to long-term value creation, every additional year spent as a private entity allows for further compounding of capabilities. A robust secondary market grants companies this invaluable time. It alleviates the pressure on founders to rush towards a public offering before their business models are fully mature or their market positions are solidified. This allows them to focus on deep innovation, product development, and strategic expansion without the immediate demands of public market reporting.
By providing liquidity to early employees and investors, secondaries help maintain a healthy cap table. Employees are incentivized to stay and contribute to the company’s growth knowing they have a mechanism to access their accumulated wealth. New long-horizon investors, entering via secondary purchases, bring fresh capital and conviction, reinforcing the company at crucial junctures in its development. This dynamic ensures that founders can continue pursuing category-defining outcomes, supported by a patient and flexible capital base—a hallmark of the U.S. venture industry’s ability to foster groundbreaking innovation. The presence of a vibrant secondary market ultimately de-risks the long-term investment horizon for all parties, making ambitious projects more feasible.
Building for America’s Future: Critical Sectors and National Imperatives
Beyond the financial mechanics, the deeper question for understanding the venture industry is the nature of the "long-horizon companies" being built. Jared Carmel points to critical sectors where MVP primarily invests: artificial intelligence, defense, space, supply chain, and frontier compute. These are not merely three-year or ten-year ventures; they represent twenty-year journeys, often carrying significant implications for national security and economic competitiveness. "The companies are going to need to build longer because they have more to build," Carmel explains, underscoring the inherent complexity and societal importance of these undertakings.
The COVID-19 pandemic served as a stark wake-up call, crystallizing a realization Carmel had been observing for years: the United States had quietly outsourced strategic capabilities it could not afford to be without, evidenced by critical shortages of medications and N95 masks. This experience underscored the imperative to rebuild domestic capacity in vital areas. The companies now emerging to address these gaps share a common profile: they demand deep capital, unparalleled technical talent, and a willingness to plan in decades, not mere quarters.
For instance, investments in artificial intelligence are not just about software; they involve foundational research, massive data infrastructure, and ethical frameworks that require sustained effort. In defense and space, developing next-generation technologies like advanced propulsion systems, satellite constellations, or cybersecurity solutions involves multi-year R&D cycles, stringent regulatory hurdles, and immense capital outlays. Rebuilding resilient supply chains for critical goods requires complex logistical overhauls and strategic domestic manufacturing initiatives. These are not projects for rapid exits but for enduring impact. Government initiatives, such as increased defense spending on innovative technologies or efforts to reshore critical manufacturing, often align with and amplify these venture capital investments, creating a synergy between private capital and national objectives.
The Evolution of Venture Support: Beyond the Check
The "long journey" characteristic of these vital companies has also necessitated an evolution in the role of the venture industry itself. Showing up for these founders is no longer simply a matter of writing a check; it involves a commitment to staying alongside them through extended periods of difficult, often unglamorous, work. This requires a deeper, more hands-on approach from investors.
Carmel emphasizes this shift in investor engagement: "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one." This philosophy translates into tangible support, such as making strategic board introductions with individuals possessing deep expertise in critical sectors like defense and national security. It also means connecting growing companies with experienced operating leaders who can guide scaling efforts and navigate complex regulatory environments. Most importantly, it signifies a willingness to remain invested and actively supportive through the long, arduous "middle" of a company’s journey—a period when initial excitement may wane, challenges multiply, and external validation can feel distant.
This commitment reflects a mature understanding of company building, where venture capitalists become true partners, offering strategic counsel, operational guidance, and unwavering belief in the face of adversity. This long-term partnership approach is particularly crucial for companies in sensitive sectors where success might hinge on navigating government contracts, securing regulatory approvals, or building highly specialized technical teams over many years. It represents a maturation of the venture capital model, moving beyond purely transactional relationships to embrace a stewardship role for the nation’s most ambitious innovations.
Optimism Amidst Evolution: The Future of American Innovation
When questioned about the driving force behind his continued dedication, Jared Carmel offers a twofold answer. Personally, he finds immense satisfaction in the privilege of immersing himself in a dozen companies annually, learning directly from the visionary individuals who are building them. This intellectual engagement and exposure to cutting-edge innovation remain a powerful motivator.
The second, broader answer concerns 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," Carmel asserts. This statement encapsulates the core thesis for the U.S. venture industry today. The sheer breadth and depth of entrepreneurial activity, particularly in foundational technologies and critical national sectors, present an unparalleled opportunity.
The companies American founders are building today are often more capital-intensive and demand a longer horizon than those of a generation ago. The venture industry, through the institutionalization of secondaries and a more patient approach to capital deployment, has demonstrably adapted to support these ventures. The ongoing work involves ensuring that capital remains accessible and fluid across every stage of a company’s journey, from initial seed funding to late-stage growth and beyond, even if that "beyond" means a sustained period of private operation. This continuous flow of capital is essential to harness the full potential of American innovation, empowering founders to solve complex problems and build the companies that will define the nation’s future.
Manhattan Venture Partners, as an NVCA member, stands as a testament to this evolving landscape, embodying the forward-thinking approach required to nurture the next generation of American enterprises. Its work highlights how strategic financial innovation, particularly in the secondaries market, is not merely a financial convenience but a fundamental enabler of long-term economic growth and national resilience.
