The American venture capital landscape has undergone a profound transformation over the past two decades, evolving from a relatively niche financing mechanism to a multifaceted ecosystem supporting long-horizon innovation. At the forefront of this evolution, particularly in the institutionalization of the secondary market, stands Jared Carmel, co-founder of Manhattan Venture Partners (MVP). His journey, from navigating the aftermath of the dot-com bust to pioneering a sophisticated approach to venture secondaries, offers a compelling narrative of foresight, adaptability, and a deep conviction in the enduring power of American enterprise.
A Market Maverick: Reading the Economic Tape Early On
Jared Carmel’s entry into the professional world coincided with one of the most tumultuous periods in recent economic history. Graduating in the immediate wake of the dot-com bubble’s implosion and just weeks before the September 11th attacks, he gained an invaluable, albeit stark, education in market cycles and the ephemeral nature of speculative booms. This early exposure to economic volatility instilled a fundamental understanding: markets are cyclical, and patterns, though often dismissed, inevitably re-emerge. Lessons learned from the collapse of tech darlings, the subsequent resurgence of forgotten sectors like telecom infrastructure, or the later ebb and flow of clean tech and SPACs, solidified his belief in patient observation and counter-cyclical thinking.
A pivotal moment arrived in late 2009. The global financial crisis was receding, and a new generation of private technology companies was beginning to capture significant attention. It was then that a friend, an early employee at Facebook, sought to sell a portion of his shares as he prepared for a wedding and a departure from the company. Carmel seized the opportunity, acquiring the shares at a modest valuation of a few dollars apiece. While he readily admits to no longer owning those specific shares – a testament to the dynamic nature of early-stage investing – the transaction itself was a revelation. "This was before the secondary markets were even a market," Carmel recalls. "Before people knew it existed."
This singular transaction ignited a vision. Carmel recognized the nascent demand for liquidity among early employees and investors in rapidly scaling, yet still private, technology companies. He began to facilitate these transactions, providing critical liquidity for individuals at companies that would soon become household names, including Facebook, Twitter, and Palantir. This pioneering work eventually led him to G Squared, a firm that further cemented his expertise in late-stage private investments. By 2014, with a clear understanding of the market’s burgeoning potential, Carmel co-founded Manhattan Venture Partners. His conviction, then considered forward-thinking, has since become a widely accepted truth across the industry: the secondary market, far from being a fringe activity, needed to be institutionalized. It required the same rigorous diligence, disciplined underwriting standards, and analytical prowess traditionally applied to primary venture capital investments.
The Evolving Lifecycle of Innovation: Why Companies Stay Private Longer
The past decade has witnessed a quiet but profound shift in the operational lifecycle of American companies, particularly within the innovation economy. Founders are now building enterprises that demand significantly longer maturation periods. It is no longer uncommon for some of today’s most valuable private companies to operate for a decade, or even two, before considering a public offering. This extended private runway is not, as some market commentators might suggest, a sign of distress or a "closed IPO window" due to poor market conditions. On the contrary, Carmel argues, "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 a conventional wisdom that often equates market health with the volume of IPOs. Instead, it highlights a crucial adaptation within the venture ecosystem. The primary drivers for companies staying private longer are multi-faceted:
- Complexity of Innovation: Companies are tackling more ambitious and technically challenging problems, particularly in areas like artificial intelligence, biotech, and advanced manufacturing. These require sustained R&D, deep capital investment, and extensive development cycles that are often ill-suited to the quarterly reporting pressures of public markets.
- Abundance of Private Capital: The sheer volume and diversity of private capital available today – from growth equity funds to sovereign wealth funds and increasingly sophisticated family offices – means companies can access significant funding without the immediate need for a public listing. This patient capital allows founders to focus on long-term strategy and execution rather than short-term shareholder demands.
- Regulatory Burdens: The costs and regulatory compliance associated with being a public company, particularly in the post-Sarbanes-Oxley era, are substantial. Many founders prefer to defer this burden until their businesses are robustly scaled and strategically positioned.
- Strategic Flexibility: Remaining private offers greater flexibility in strategic decision-making, allowing companies to pursue bold initiatives, undertake complex M&A, or pivot without constant public scrutiny.
What has emerged in response to these dynamics is a far more sophisticated and flexible capital stack. Secondary markets, once seen as a last resort, now stand alongside growth equity and a diverse base of late-stage investors to provide the kind of patient, long-horizon capital essential for these multi-decade journeys. Even within IPOs themselves, secondary capital has grown, indicating how the public listing event has evolved to accommodate existing investors seeking partial liquidity, further underscoring the market’s maturity. Data from firms like Setter Capital and Greenhill show that the venture secondary market has grown exponentially, with estimated transaction volumes surging from a few billion dollars annually a decade ago to tens of billions today, reflecting its integral role in maintaining liquidity and supporting extended private company lifecycles.
The Crucial Role of Secondaries in the Innovation Economy
For many years, the secondary market was relegated to a niche corner of venture capital, often associated with distressed assets or desperate sellers. Jared Carmel was among the earliest proponents to articulate that secondaries would evolve into something far more central and strategic to the industry’s ability to foster 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," Carmel asserts.
The rationale behind this growing importance is straightforward and profoundly impactful:
- Extended Runway for Innovation: When a company is genuinely building for the long term, every additional year of private runway allows for further compounding of capabilities, technological advancements, and market penetration without external pressures. A robust secondary market grants companies this invaluable time.
- Liquidity for Early Stakeholders: Early employees, who often receive significant equity compensation, and early-stage investors, who took substantial risks, can realize partial or full liquidity without forcing the company into a premature public offering. This allows them to de-risk their personal finances or re-invest capital, fostering a healthy ecosystem where risk-takers are rewarded. This is especially critical for retaining top talent in competitive markets, as it allows employees to realize value from their equity grants before an uncertain IPO.
- Healthy Capitalization Tables: By providing an orderly mechanism for early stakeholders to exit, secondaries prevent cap tables from becoming overly diluted or burdened by legacy investors eager for an exit. This keeps the company’s ownership structure clean and attractive for new, long-horizon investors.
- Fresh Capital and Conviction: The entry of new investors through secondary transactions brings fresh capital and, crucially, renewed conviction at critical junctures in a company’s growth. These new investors often have longer investment horizons or specific strategic interests that align with the company’s evolving needs.
- Founder Empowerment: Ultimately, a robust secondary market empowers founders to maintain control over their vision and development timelines. They can continue building toward truly category-defining outcomes, rather than being forced to compromise their long-term strategy for short-term liquidity events. This directly supports the kind of ambitious, foundational innovation that the U.S. venture industry has historically championed.
Supporting the Companies America Needs: A Strategic Imperative
Beyond the financial mechanics, the deeper significance of these long-horizon companies lies in what they are actually building. For MVP, the focus is squarely on critical sectors that carry profound implications for national security, economic competitiveness, and societal well-being: artificial intelligence, defense, space, supply chain resilience, and frontier compute. These are not companies designed for a three-year flip, nor even a ten-year journey; they are twenty-year endeavors, requiring unprecedented patience and capital. "The companies are going to need to build longer because they have more to build," Carmel emphasizes.
Carmel traces his heightened conviction in these strategic sectors back to the stark realities exposed by the COVID-19 pandemic. The global supply-chain shock revealed a critical vulnerability: the United States’ inability to reliably source essential medications or even basic N95 masks. This crisis crystallized a trend he had observed for years – a quiet outsourcing of strategic capabilities that the nation could not afford to lose. The companies now being built to address these foundational gaps share a common profile: they demand deep capital, attract top-tier technical talent, and crucially, require a willingness to plan in decades rather than quarters.
Examples abound: companies developing advanced AI for autonomous systems, next-generation satellite constellations for secure communications, innovative materials for defense applications, or resilient domestic manufacturing solutions are all characterized by immense capital requirements, extensive R&D, and regulatory hurdles that necessitate a prolonged private phase. These are investments not just in technology, but in national infrastructure and future prosperity. The venture industry, therefore, has had to mature into this new reality, recognizing that showing up for these founders involves more than merely writing a check. It demands a commitment to staying alongside them through long stretches of difficult, often unglamorous work.
Beyond Capital: The Essence of Partnership
In this landscape of extended timelines and complex challenges, the definition of "being helpful" for a venture capitalist has expanded significantly. For Jared Carmel and MVP, it transcends transactional engagement. "Being helpful isn’t pushing a transaction. It’s being the person the founder calls before they decide whether they need one," he states. This philosophy underscores a deeper partnership model, one built on trust, strategic insight, and sustained support.
MVP’s approach involves leveraging its extensive network and expertise to provide founders with resources far beyond financial capital. This includes:
- Strategic Introductions: Connecting founders with board members who possess deep domain expertise in critical sectors like defense, national security, or specific industrial verticals. These are not merely figureheads but active advisors who can navigate complex regulatory environments, open new market opportunities, and provide invaluable strategic guidance.
- Operational Leadership: Facilitating introductions to experienced operating leaders who can help a growing company scale its operations, build robust teams, and institutionalize processes. This is particularly vital for companies transitioning from R&D to commercialization in highly regulated or capital-intensive fields.
- Long-Term Commitment: A willingness to remain invested and supportive through the often-arduous "long middle" of a company’s journey. This period, characterized by intensive development, market validation, and scaling challenges, is frequently the hardest, with public validation often furthest away. A patient, committed investor can make all the difference during these crucial phases.
This holistic approach reflects an understanding that in today’s innovation economy, capital is necessary but not sufficient. Strategic counsel, operational support, and unwavering conviction are equally, if not more, critical for companies building solutions that will define the next generation of American competitiveness.
Optimism for the Future of American Innovation
When asked what fuels his enduring commitment to this demanding work, Jared Carmel offers a dual perspective. Personally, he expresses a genuine sense of privilege in being able to delve deeply into a dozen or more companies annually, constantly learning from the visionary individuals at their helm. This intellectual curiosity and engagement remain a primary driver. The second, and perhaps more profound, reason is rooted in his optimism for the country 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 passionately asserts. This statement encapsulates the core mission of the U.S. venture industry today. The sheer breadth and depth of entrepreneurial activity, coupled with unprecedented technological advancements, particularly in areas like AI and quantum computing, promise a future defined by transformative innovation.
The companies American founders are building today are often characterized by longer horizons, greater capital intensity, and more profound societal implications than those of previous generations. The venture industry, spurred by pioneers like Jared Carmel and firms like Manhattan Venture Partners, has demonstrably adapted to support them. The ongoing work involves not just identifying the next groundbreaking idea, but ensuring that patient, strategic capital continues to flow to these enterprises through every stage of their demanding, yet ultimately world-changing, journeys. It is a testament to the dynamic resilience of the American innovation engine, continuously evolving to meet the challenges and opportunities of the 21st century.
Manhattan Venture Partners, as a key member of the National Venture Capital Association (NVCA), continues to play a vital role in this evolving ecosystem, proving that strategic foresight, institutional rigor, and unwavering support for long-term vision are the hallmarks of modern venture capital.
