Ideological resistance to secondaries has hindered venture performance and enabled bad habits.

It’s time to embrace secondaries for shorter feedback loops, properly managed risk, and stronger returns.

Holding 100% to maturity concentrates risk without guaranteed better outcomes.

GPs should consider strategic sales to optimize performance.

The case isn’t just opportunistic secondaries for IRR—it’s for a comprehensive secondaries strategy and opportunistic holding to improve MOIC.

AngelList data: Best time to sell (IRR basis) is year 8, with value concentrating in years 9-12. Partial sales in years 5-7 (post 3-year deployment) are optimal.

www.angellist.com/learn/tvpi

Later rounds include terms like IPO ratchet clauses, overvaluing early shares. Square’s 2015 IPO showed preferred shares got $93M extra, proving overvaluation.

papers.ssrn.com/sol3/papers....

Large funding rounds are often dilutive, with big firms ignoring pro-rata and cramming down early investors, concentrating risk and slowing TVPI growth.

Big winners absorb huge capital from mega VC funds, re-risking startups. Late-stage mega rounds can push risk back to maximum, despite appearing “safer.”

x.com/robgo/status...

Rob Go: “Series A is less risky than seed, Series D less than A, but VC dollars add and remove risk, making the risk curve less linear.” This disrupts the idea of steady risk reduction.

Investments don’t always increase in value.

Failure rates drop over time (39% at seed, 13% at Series D), but risk remains significant.

As a fund matures, value concentrates into fewer (riskier) winners.

Source: “Analyst Note: VC Returns by Series: Part IV”.

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