SlideShare a Scribd company logo
“Skip the J-Curve” – An Intro to Venture Secondary
Seed A B C LATER-STAGE IPOs / Big ExitsSTAGE
TIME
LIQUIDITY
C
A
A
A
B
B
3Y2Y1Y 4Y 5Y 6Y 9Y8Y7Y 10Y + beyond
Buy fund secondary
@ 25-50% discount
D
C
B
D
“Buy Unicorns on Sale”
Invest in VC funds that are already winning
“Skip the J-Curve”
Avoid the first 5 years of risky bets
FUNDS
COMPANIES
VALUE
RISK
3Y 4Y2Y1Y 5Y 6YTIME 7Y 8Y 11Y 12Y10Y9Y 13Y 14Y 15Y
7 year vehicle
1X
Faster return
of principal
10-15 year vehicle
Better
performance
0.5X
3-5X
1-2X
VC Fund
Secondary
Typical
VC Fund
Benefits: Faster Growth, Faster Liquidity
What’s the Difference between Fund Secondary and Company Secondary?
DIVERSIFIED: less risk exposure
LESS COMPETITIVE: less activity, fewer buyers
BIGGER DISCOUNTS: 25 - 50%
D
B
D
C
B
C
Company (Direct) SecondaryFund Secondary
CONCENTRATED: more risk exposure
MORE COMPETITIVE: more buyers and sellers
SMALLER DISCOUNTS: 0 - 20%
FUND
COMPANIES
SLICE of LP interests across PORTFOLIO Equity stake in a SINGLE COMPANY
D
C
B
PVC advantage
Why are Discounts BIGGER for Fund Secondary than Company Secondary?
D
C
B
Fewer Buyers, More Arbitrage
Because there are fewer buyers specializing in Fund
Secondary and because many sellers are competing
for liquidity, buyers have greater leverage relative to
sellers. Fund Secondary is a buyer’s market.
Basket of Assets, Harder to Value
Fund Secondary is often heavily discounted because
it’s more complex to evaluate a basket of assets
than just a single company. As former managers and
LPs in over 40 venture funds, PVC has extensive
experience evaluating multi-asset portfolios.
Fund Secondary is a
buyer’s market…
but only for buyers
who know what
they’re doing.
Unicorns Matter, Horses Discounted
Larger companies close to IPO or acquisition are in
greater demand; smaller companies that are still
growing are in less demand. Multi-asset portfolios
are valued primarily based on current unicorns;
future unicorns and other non-IPO winners are more
heavily discounted.
LPs and GPs need
liquidity and partners
for multiple reasons
(not just distress).
Why do LPs and GPs Sell Winning Portfolios Early?
• HNWIs and family offices need liquidity when change happens (death, divorce, retirement)
• Corporate LPs change strategy every few years, just as CEOs/CFOs come and go
• LPs may need liquidity when purchasing a major asset (e.g., real estate)
• Market volatility and uncertainty may increase the need for cash
Non-institutional LPs may sell because:
• Sell a portion to show realized gains as they raise their next fund
• Sell to generate cash for operational expenses, recycling, or distributions
• Sell to hedge and take (some) money off the table
• Partner (raise capital) to exercise pro-rata rights
• Partner (co-invest) to increase investment in follow-on rounds
Early-stage GPs may sell (or partner):
Secondary Market Growth: Venture Capital vs. Private Equity
PE Secondary: 10x Growth from 2000 to 2020
VC Secondary: 10x Growth from 2010 to 2030
2000 2020201520102005 2025 2030
$10B
$100B+
$80B*
(2018)
$38B**
(2019 e)$26B
Dot-com
crash
US financial
crisis
EUR
sovereign
debt crisis
China-US
Trade War /
CFIUS /
Coronavirus
$10B
Company Secondary
(Direct)
VC Fund
Secondary
* https://settercapital.com/media/reports/Setter_Capital_Volume_Report_FY_2018.pdf
** https://www.industryventures.com/estimating-the-size-of-the-secondary-market-for-venture-investments
Case Study: Venture Secondary SPVs
(Q1/20): $5M secondary in 500 Startups Fund I (2010)
• Purchased $7M in LP interests @ 30-45% discounts (42% avg)
• 4 Unicorns: Talkdesk, Lucid, Intercom, Udemy (~80% of portfolio)
• Previous IPOs: Twilio (2016), SendGrid (2017), The RealReal (2019)
> 3x
Projected
net return
to LPs:
in 5 years
1X
2X
3X
4X
2021 2022 2023 2024 2025
est. 1x principal
returned in 2-3 yrs
1.5x immediate
markup (due to
discount)
0.47
0.45
0.54
0.87
1.27 3.60
1.0x invested capital
2020 Total
Source: PitchBook, July 2020
* Undisclosed.
Company Val Latest Funding Round, Lead Investors
$3B Q3 / 20 $143M Series C, Franklin Templeton
$1.0B Q2 / 20 $52M Series D, ICONIQ, Spectrum, Meritech
$1.2B Q2 / 18 $125M Series D, Kleiner Perkins
$2.0B Q1 / 20 $50M Series E, Benesse Holdings, IVP
$300M * Q1 / 20 [ Undisclosed ]
$300M * Q3 / 20 [ Undisclosed ]
** Q2 / 20 $251 Series C Itochu, Visa, Soros, PayPal
[ other ] - Notable: Smule, Flywire, KiwiCo, Conekta
5-Year Projected Distributions and Returns
2.2x gross
after Q2
FMV Realized Returns
Unicorns
Non-Unicorns
1
We buy secondary interests in top-
performing VC funds and portfolio
companies, from LPs and GPs who
want early liquidity.
2
We buy VC portfolios at 5-10 years
maturity, after winners are already
winning and growth is accelerating.
3
Our portfolios contain pre-IPO
unicorns, after they have raised
Series B/C/D financing from top-
tier institutional VCs.
4
We have invested in thousands of
companies across 20 VC funds
with over 100 exits, 15 unicorns,
and 5 IPOs. Forbes Midas List,
2016 and 2017.
5
We are experienced investors and
startup veterans who worked at PayPal,
eBay, Founders Fund, and 500 Startups.
We’ve spent 50 years in Silicon Valley.
6
We buy VC portfolios after losing assets
are written off, when distributions are
already happening. We expect a quick
1X return of principal within 3-5 years,
and 3X or better in 5-7 years.
Reasons to Invest with Practical Venture Capital
Established Portfolio WinnersVC Secondary @ 25-50% DiscountsSilicon Valley Network
Forbes Midas List Top 100 VCs Access to Pre-IPO Unicorns Faster Liquidity, Returns in 5 Years
TOP 100 GLOBAL VCs
2017 (#68), 2016 (#96)
15+ UNICORNS / 5 IPOs
Dave McClure
General Partner
BS, Engineering, Applied Math
Johns Hopkins University
Aman Verjee
General Partner
FORMER COO
500 STARTUPS
FORMER CFO
SONOS (NASDAQ: SONO)
FORMER CFO
EBAY NORTH AMERICA
(NASDAQ: EBAY)
FINANCE & STRATEGY
PAYPAL (NASDAQ: PYPL)
BA, Economics
Stanford University
JD, Harvard University
Stephanie Shorter
Investor Relations
Jake Block
Senior Advisor
NEUROSCIENCE PROFESSOR
VANDERBILT UNIVERSITY
PhD, Behavioral Neuroscience
Washington State University
HOW TO VC
VC Book Co-Author
BRAIN + BEHAVIOR CHANGE
EXPERT
Consultant to 50+ startups
ACCELERATOR
NEUROTECH LEAD
Transformative Technology
Academy + Conference
MANAGING PRINCIPAL
JBB CAPITAL
MBA, Finance
London Business School
EXECUTIVE DIRECTOR,
EUROPEAN INSTITUTIONAL
EQUITY SALES
NOMURA SECURITIES
PRIVATE BANKER + DIRECTOR
DEUTSCHE BANK
San Francisco office
ASSISTANT VP, ACQUISITIONS
MARCUS & MILLICHAP /
SOVEREIGN INVESTMENT CO.
DIRECTOR OF MARKETING
PAYPAL (NASDAQ: PYPL)
VC, FOUNDERS FUND
INVESTOR, FACEBOOK fbFUND
Taught “VC Unlocked”
at Stanford University
FOUNDER
MANAGING PARTNER
$500 AUM / 20 VC funds
JBB
For illustrative purposes only, not drawn to true scale. Based on fund financials, as at 6.30.20.
18 UNICORNS FLYWIRE
TALKDESK
INTERCOM
CANVA
IPSY
UDEMY
REDDIT
GITLAB
FABFITFUN
THE REALREAL
4 UNICORNS CREDIT KARMA
SENDGRID
TWILIO
LYFT
2004-09 2010-15
DMC
angel
FF Angel
Founders Fund II
500 Startups F1 500 Startups F2 500 Startups F3
$85M
$2.5M $1M
$175M
$40M
$180M
20%
>50%
>50%
$44M
$29M
$226M $124M
23.6%
12.8%
12.1%
5X
65X
40X
5.6X
2.4X
1.8X
Net IRR
Net TVPI
AUM
$1.6M
NAV
~20%
$325K
PORTFOLIO PERFORMANCE Dave McClure / Founders Fund / 500 Startups
2004-09 2008-09 2009 2010-11 2012-13 2014-15
Facebook fbFund
Founders Fund II, Accel X
CREDIT KARMA
SENDGRID
TWILIO
GRAB
STRIPE
BUKALAPAK
LUCID
VTS

More Related Content

What's hot

Notation Capital Fund 1 pitch deck
Notation Capital Fund 1 pitch deckNotation Capital Fund 1 pitch deck
Notation Capital Fund 1 pitch deck
Notation Capital
 
How to VC: Creating a VC fund portfolio model
How to VC: Creating a VC fund portfolio modelHow to VC: Creating a VC fund portfolio model
How to VC: Creating a VC fund portfolio model
Dave McClure
 
Hack Fund V - Pitch Deck
Hack Fund V - Pitch DeckHack Fund V - Pitch Deck
Hack Fund V - Pitch Deck
Hack Fund V
 
Seedcamp Fund V Fundraising Deck
Seedcamp Fund V Fundraising DeckSeedcamp Fund V Fundraising Deck
Seedcamp Fund V Fundraising Deck
Seedcamp
 
The Helpful VC
The Helpful VC The Helpful VC
The Helpful VC
Dave McClure
 
Guest lecture corporate venture capital (herman kienhuis)
Guest lecture corporate venture capital (herman kienhuis)Guest lecture corporate venture capital (herman kienhuis)
Guest lecture corporate venture capital (herman kienhuis)
Herman Kienhuis
 
Prop Tech 3.0 - The Future of Real Estate
Prop Tech 3.0 - The Future of Real EstateProp Tech 3.0 - The Future of Real Estate
Prop Tech 3.0 - The Future of Real Estate
Edward Lange
 
Corporate VC - Qualcomm Ventures
Corporate VC - Qualcomm VenturesCorporate VC - Qualcomm Ventures
Corporate VC - Qualcomm Ventures
StartupAlliance
 
1776 discovery fund investor pitch
1776 discovery fund investor pitch1776 discovery fund investor pitch
1776 discovery fund investor pitch
Glen Hellman
 
Seedcamp Fund IV Fundraising Deck
Seedcamp Fund IV Fundraising DeckSeedcamp Fund IV Fundraising Deck
Seedcamp Fund IV Fundraising Deck
Seedcamp
 
Workshop startup fundraising during World Summit AI.pdf
Workshop startup fundraising during World Summit AI.pdfWorkshop startup fundraising during World Summit AI.pdf
Workshop startup fundraising during World Summit AI.pdf
Herman Kienhuis
 
VENTURE CAPITAL FUND Financial Model
VENTURE CAPITAL FUND Financial ModelVENTURE CAPITAL FUND Financial Model
VENTURE CAPITAL FUND Financial Model
Manuel Lacarte
 
Kleiner Perkins Fund 18
Kleiner Perkins Fund 18Kleiner Perkins Fund 18
Kleiner Perkins Fund 18
Kleiner Perkins
 
VC Fundraising Deck Template: Carta x Kauffman Fellows
VC Fundraising Deck Template: Carta x Kauffman FellowsVC Fundraising Deck Template: Carta x Kauffman Fellows
VC Fundraising Deck Template: Carta x Kauffman Fellows
Nihar Neelakanti
 
Gorilla Labs - Venture Builder
Gorilla Labs - Venture BuilderGorilla Labs - Venture Builder
Gorilla Labs - Venture Builder
Nikhil Jacob
 
KP19
KP19 KP19
Notation: Pre-seed Investing & Risk
Notation: Pre-seed Investing & RiskNotation: Pre-seed Investing & Risk
Notation: Pre-seed Investing & Risk
Notation Capital
 
A Quiz on First-Time VC Funds
A Quiz on First-Time VC FundsA Quiz on First-Time VC Funds
A Quiz on First-Time VC Funds
Dan Abelon
 
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
UCICove
 
Notation II Pitch Deck
Notation II Pitch DeckNotation II Pitch Deck
Notation II Pitch Deck
Notation Capital
 

What's hot (20)

Notation Capital Fund 1 pitch deck
Notation Capital Fund 1 pitch deckNotation Capital Fund 1 pitch deck
Notation Capital Fund 1 pitch deck
 
How to VC: Creating a VC fund portfolio model
How to VC: Creating a VC fund portfolio modelHow to VC: Creating a VC fund portfolio model
How to VC: Creating a VC fund portfolio model
 
Hack Fund V - Pitch Deck
Hack Fund V - Pitch DeckHack Fund V - Pitch Deck
Hack Fund V - Pitch Deck
 
Seedcamp Fund V Fundraising Deck
Seedcamp Fund V Fundraising DeckSeedcamp Fund V Fundraising Deck
Seedcamp Fund V Fundraising Deck
 
The Helpful VC
The Helpful VC The Helpful VC
The Helpful VC
 
Guest lecture corporate venture capital (herman kienhuis)
Guest lecture corporate venture capital (herman kienhuis)Guest lecture corporate venture capital (herman kienhuis)
Guest lecture corporate venture capital (herman kienhuis)
 
Prop Tech 3.0 - The Future of Real Estate
Prop Tech 3.0 - The Future of Real EstateProp Tech 3.0 - The Future of Real Estate
Prop Tech 3.0 - The Future of Real Estate
 
Corporate VC - Qualcomm Ventures
Corporate VC - Qualcomm VenturesCorporate VC - Qualcomm Ventures
Corporate VC - Qualcomm Ventures
 
1776 discovery fund investor pitch
1776 discovery fund investor pitch1776 discovery fund investor pitch
1776 discovery fund investor pitch
 
Seedcamp Fund IV Fundraising Deck
Seedcamp Fund IV Fundraising DeckSeedcamp Fund IV Fundraising Deck
Seedcamp Fund IV Fundraising Deck
 
Workshop startup fundraising during World Summit AI.pdf
Workshop startup fundraising during World Summit AI.pdfWorkshop startup fundraising during World Summit AI.pdf
Workshop startup fundraising during World Summit AI.pdf
 
VENTURE CAPITAL FUND Financial Model
VENTURE CAPITAL FUND Financial ModelVENTURE CAPITAL FUND Financial Model
VENTURE CAPITAL FUND Financial Model
 
Kleiner Perkins Fund 18
Kleiner Perkins Fund 18Kleiner Perkins Fund 18
Kleiner Perkins Fund 18
 
VC Fundraising Deck Template: Carta x Kauffman Fellows
VC Fundraising Deck Template: Carta x Kauffman FellowsVC Fundraising Deck Template: Carta x Kauffman Fellows
VC Fundraising Deck Template: Carta x Kauffman Fellows
 
Gorilla Labs - Venture Builder
Gorilla Labs - Venture BuilderGorilla Labs - Venture Builder
Gorilla Labs - Venture Builder
 
KP19
KP19 KP19
KP19
 
Notation: Pre-seed Investing & Risk
Notation: Pre-seed Investing & RiskNotation: Pre-seed Investing & Risk
Notation: Pre-seed Investing & Risk
 
A Quiz on First-Time VC Funds
A Quiz on First-Time VC FundsA Quiz on First-Time VC Funds
A Quiz on First-Time VC Funds
 
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
Understanding How Venture Capital Works | Kirsten Leute and John Lee | Lunch ...
 
Notation II Pitch Deck
Notation II Pitch DeckNotation II Pitch Deck
Notation II Pitch Deck
 

Similar to Skip the J-Curve: An Intro to Venture Capital Secondary

SpringTime Ventures 2022 Startup Fundraising Market Analysis
SpringTime Ventures 2022 Startup Fundraising Market AnalysisSpringTime Ventures 2022 Startup Fundraising Market Analysis
SpringTime Ventures 2022 Startup Fundraising Market Analysis
SpringTime Ventures
 
Vc Intro Seedfund Iimc
Vc Intro Seedfund IimcVc Intro Seedfund Iimc
Vc Intro Seedfund Iimc
guestab57a1
 
Starting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand LuniaStarting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand Lunia
GetEvangelized
 
Funding options for Life Science Companies
Funding options for  Life Science CompaniesFunding options for  Life Science Companies
Funding options for Life Science Companies
The Capital Network
 
Healthcare Fundraising 101
Healthcare Fundraising 101Healthcare Fundraising 101
Healthcare Fundraising 101
The Capital Network
 
Introduction to private equity (2008)
Introduction to private equity (2008)Introduction to private equity (2008)
Introduction to private equity (2008)
gooseinoz
 
Angel investing bootcamp
Angel investing bootcampAngel investing bootcamp
Angel investing bootcamp
Ravi Trivedi
 
Angel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspectiveAngel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspective
Ravi Trivedi
 
Venture Capital 101
Venture Capital 101Venture Capital 101
Venture Capital 101
Eventbrite
 
Funding A Technology Start Up Insights Into The World Of Venture Capital
Funding A Technology Start Up   Insights Into The World Of Venture CapitalFunding A Technology Start Up   Insights Into The World Of Venture Capital
Funding A Technology Start Up Insights Into The World Of Venture Capital
Thomas Weithman
 
Gs503 VC industry players lecture 1 120115
Gs503 VC industry players lecture 1 120115Gs503 VC industry players lecture 1 120115
Gs503 VC industry players lecture 1 120115
Stephen Ong
 
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
Edge AI and Vision Alliance
 
Vcic Prep Session Vc 101
Vcic Prep Session Vc 101Vcic Prep Session Vc 101
Vcic Prep Session Vc 101
ClimbChen
 
Venture Capital Primer Rev2 101309
Venture Capital Primer Rev2 101309Venture Capital Primer Rev2 101309
Venture Capital Primer Rev2 101309
jamerine
 
Introduction to-venture-capital-9229
Introduction to-venture-capital-9229Introduction to-venture-capital-9229
Introduction to-venture-capital-9229
jimeetshh
 
Introduction to Venture Capital
Introduction to Venture CapitalIntroduction to Venture Capital
Introduction to Venture Capital
pricew
 
Venture Capital 101
Venture Capital 101 Venture Capital 101
Venture Capital 101
Brett Munster
 
EIA2016 Turin - Ravi Belani. Startup Funding
EIA2016 Turin - Ravi Belani. Startup Funding			EIA2016 Turin - Ravi Belani. Startup Funding
EIA2016 Turin - Ravi Belani. Startup Funding
European Innovation Academy
 
Lunch and Learn - Due Diligence
Lunch and Learn - Due DiligenceLunch and Learn - Due Diligence
Lunch and Learn - Due Diligence
Wealth University
 
VC 101
VC 101VC 101

Similar to Skip the J-Curve: An Intro to Venture Capital Secondary (20)

SpringTime Ventures 2022 Startup Fundraising Market Analysis
SpringTime Ventures 2022 Startup Fundraising Market AnalysisSpringTime Ventures 2022 Startup Fundraising Market Analysis
SpringTime Ventures 2022 Startup Fundraising Market Analysis
 
Vc Intro Seedfund Iimc
Vc Intro Seedfund IimcVc Intro Seedfund Iimc
Vc Intro Seedfund Iimc
 
Starting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand LuniaStarting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand Lunia
 
Funding options for Life Science Companies
Funding options for  Life Science CompaniesFunding options for  Life Science Companies
Funding options for Life Science Companies
 
Healthcare Fundraising 101
Healthcare Fundraising 101Healthcare Fundraising 101
Healthcare Fundraising 101
 
Introduction to private equity (2008)
Introduction to private equity (2008)Introduction to private equity (2008)
Introduction to private equity (2008)
 
Angel investing bootcamp
Angel investing bootcampAngel investing bootcamp
Angel investing bootcamp
 
Angel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspectiveAngel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspective
 
Venture Capital 101
Venture Capital 101Venture Capital 101
Venture Capital 101
 
Funding A Technology Start Up Insights Into The World Of Venture Capital
Funding A Technology Start Up   Insights Into The World Of Venture CapitalFunding A Technology Start Up   Insights Into The World Of Venture Capital
Funding A Technology Start Up Insights Into The World Of Venture Capital
 
Gs503 VC industry players lecture 1 120115
Gs503 VC industry players lecture 1 120115Gs503 VC industry players lecture 1 120115
Gs503 VC industry players lecture 1 120115
 
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
“Navigating the Evolving Venture Capital Landscape for Edge AI Start-ups,” a ...
 
Vcic Prep Session Vc 101
Vcic Prep Session Vc 101Vcic Prep Session Vc 101
Vcic Prep Session Vc 101
 
Venture Capital Primer Rev2 101309
Venture Capital Primer Rev2 101309Venture Capital Primer Rev2 101309
Venture Capital Primer Rev2 101309
 
Introduction to-venture-capital-9229
Introduction to-venture-capital-9229Introduction to-venture-capital-9229
Introduction to-venture-capital-9229
 
Introduction to Venture Capital
Introduction to Venture CapitalIntroduction to Venture Capital
Introduction to Venture Capital
 
Venture Capital 101
Venture Capital 101 Venture Capital 101
Venture Capital 101
 
EIA2016 Turin - Ravi Belani. Startup Funding
EIA2016 Turin - Ravi Belani. Startup Funding			EIA2016 Turin - Ravi Belani. Startup Funding
EIA2016 Turin - Ravi Belani. Startup Funding
 
Lunch and Learn - Due Diligence
Lunch and Learn - Due DiligenceLunch and Learn - Due Diligence
Lunch and Learn - Due Diligence
 
VC 101
VC 101VC 101
VC 101
 

More from Dave McClure

VC Marketing and Branding Strategies
VC Marketing and Branding StrategiesVC Marketing and Branding Strategies
VC Marketing and Branding Strategies
Dave McClure
 
Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
 Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
Dave McClure
 
Building #500STRONG
Building #500STRONGBuilding #500STRONG
Building #500STRONG
Dave McClure
 
Take a Walk on the Dark Side: Branding for Startups & Sith Lords
Take a Walk on the Dark Side: Branding for Startups & Sith LordsTake a Walk on the Dark Side: Branding for Startups & Sith Lords
Take a Walk on the Dark Side: Branding for Startups & Sith Lords
Dave McClure
 
Startup & VC Tech Trends
Startup & VC Tech Trends Startup & VC Tech Trends
Startup & VC Tech Trends
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging MarketsFarming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
Dave McClure
 
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #GitexFarming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
Dave McClure
 
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems
Farming Unicorns: Building Startup & Investor EcosystemsFarming Unicorns: Building Startup & Investor Ecosystems
Farming Unicorns: Building Startup & Investor Ecosystems
Dave McClure
 
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
Dave McClure
 
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
Dave McClure
 
500 Startups / Batch 16 Demo Day (Q1/2016 update)
500 Startups / Batch 16 Demo Day (Q1/2016 update)500 Startups / Batch 16 Demo Day (Q1/2016 update)
500 Startups / Batch 16 Demo Day (Q1/2016 update)
Dave McClure
 
Startup Metrics for Pirates (FounderX, May 2016)
Startup Metrics for Pirates (FounderX, May 2016)Startup Metrics for Pirates (FounderX, May 2016)
Startup Metrics for Pirates (FounderX, May 2016)
Dave McClure
 
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
Dave McClure
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Dave McClure
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Dave McClure
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Dave McClure
 

More from Dave McClure (20)

VC Marketing and Branding Strategies
VC Marketing and Branding StrategiesVC Marketing and Branding Strategies
VC Marketing and Branding Strategies
 
Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
 Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
Bringing Silicon Valley to LatAm: Startup Ecosystems & Investment
 
Building #500STRONG
Building #500STRONGBuilding #500STRONG
Building #500STRONG
 
Take a Walk on the Dark Side: Branding for Startups & Sith Lords
Take a Walk on the Dark Side: Branding for Startups & Sith LordsTake a Walk on the Dark Side: Branding for Startups & Sith Lords
Take a Walk on the Dark Side: Branding for Startups & Sith Lords
 
Startup & VC Tech Trends
Startup & VC Tech Trends Startup & VC Tech Trends
Startup & VC Tech Trends
 
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging MarketsFarming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
Farming Unicorns: Building Startup & Investor Ecosystems for Emerging Markets
 
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #GitexFarming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
Farming Unicorns in Emerging Markets (Dubai, Oct 2016) #Gitex
 
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
The Unicorn Hedge: Why Are Corporations Buying Unicorns? (Madrid, Oct 2016)
 
Farming Unicorns: Building Startup & Investor Ecosystems
Farming Unicorns: Building Startup & Investor EcosystemsFarming Unicorns: Building Startup & Investor Ecosystems
Farming Unicorns: Building Startup & Investor Ecosystems
 
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
500 Startups #Batch17 #DemoDay: "Beauty and the GEEK"
 
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Stanford, June 2016)
 
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
Dinosaurs vs Unicorns aka "Bubble My Ass, All Dinosaurs Gonna Die" (London, J...
 
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Madrid, June 2016)
 
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
Farming Unicorns: Building Startup & Investor Ecosystems (Dublin, June 2016)
 
500 Startups / Batch 16 Demo Day (Q1/2016 update)
500 Startups / Batch 16 Demo Day (Q1/2016 update)500 Startups / Batch 16 Demo Day (Q1/2016 update)
500 Startups / Batch 16 Demo Day (Q1/2016 update)
 
Startup Metrics for Pirates (FounderX, May 2016)
Startup Metrics for Pirates (FounderX, May 2016)Startup Metrics for Pirates (FounderX, May 2016)
Startup Metrics for Pirates (FounderX, May 2016)
 
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
Farming Unicorns: Building Startup & Investor Ecosystems in Emerging Markets ...
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
 
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
Build Your Own Valley: Engineering Startup & Investor Ecosystems in Emerging ...
 

Recently uploaded

高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
234knry
 
Enhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impactEnhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impact
Alexander Belyaev
 
China's Investment Leader - Dr. Alyce SU
China's Investment Leader - Dr. Alyce SUChina's Investment Leader - Dr. Alyce SU
China's Investment Leader - Dr. Alyce SU
msthrill
 
10 geo ch 7 lifelines of economy and studies
10 geo ch 7 lifelines of economy and studies10 geo ch 7 lifelines of economy and studies
10 geo ch 7 lifelines of economy and studies
RhemanRaphael
 
Economic trends from a business point of view (May 2024)
Economic trends from a business point of view (May 2024)Economic trends from a business point of view (May 2024)
KYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksKYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
KYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
Any kyc Account
 
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdfGUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
ProexportColombia1
 
Singapore 2024 Sustainability Reporting and Accountancy Education Slides
Singapore 2024 Sustainability Reporting and Accountancy Education SlidesSingapore 2024 Sustainability Reporting and Accountancy Education Slides
Singapore 2024 Sustainability Reporting and Accountancy Education Slides
International Federation of Accountants
 
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
28xo7hf
 
Singapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdfSingapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdf
International Federation of Accountants
 
TechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdfTechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdf
richardwellington119
 
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdfMacroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
olaola5673
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
Newman Leech
 
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptxExploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
cosmo-soil
 
The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...
Yashwanth Rm
 
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
yeuwffu
 
Monthly Market Risk Update: June 2024 [SlideShare]
Monthly Market Risk Update: June 2024 [SlideShare]Monthly Market Risk Update: June 2024 [SlideShare]
Monthly Market Risk Update: June 2024 [SlideShare]
Commonwealth
 
How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
Daniel
 
PM pre reads for the product manager framework
PM pre reads for the product manager frameworkPM pre reads for the product manager framework
PM pre reads for the product manager framework
KishoreKatta6
 
Ending stagnation: How to boost prosperity across Scotland
Ending stagnation: How to boost prosperity across ScotlandEnding stagnation: How to boost prosperity across Scotland
Ending stagnation: How to boost prosperity across Scotland
ResolutionFoundation
 

Recently uploaded (20)

高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
 
Enhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impactEnhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impact
 
China's Investment Leader - Dr. Alyce SU
China's Investment Leader - Dr. Alyce SUChina's Investment Leader - Dr. Alyce SU
China's Investment Leader - Dr. Alyce SU
 
10 geo ch 7 lifelines of economy and studies
10 geo ch 7 lifelines of economy and studies10 geo ch 7 lifelines of economy and studies
10 geo ch 7 lifelines of economy and studies
 
Economic trends from a business point of view (May 2024)
Economic trends from a business point of view (May 2024)Economic trends from a business point of view (May 2024)
Economic trends from a business point of view (May 2024)
 
KYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksKYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
KYC Compliance: A Cornerstone of Global Crypto Regulatory Frameworks
 
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdfGUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
GUIA_LEGAL_CHAPTER_2_FOREIGN EXCHANGE.pdf
 
Singapore 2024 Sustainability Reporting and Accountancy Education Slides
Singapore 2024 Sustainability Reporting and Accountancy Education SlidesSingapore 2024 Sustainability Reporting and Accountancy Education Slides
Singapore 2024 Sustainability Reporting and Accountancy Education Slides
 
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
 
Singapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdfSingapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdf
 
TechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdfTechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdf
 
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdfMacroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
 
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptxExploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
Exploring-Madhya-Pradesh-Culture-Heritage-and-Land-Records.pptx
 
The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...
 
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
快速办理(RWTH毕业证书)德国亚琛工业大学毕业证录取通知书一模一样
 
Monthly Market Risk Update: June 2024 [SlideShare]
Monthly Market Risk Update: June 2024 [SlideShare]Monthly Market Risk Update: June 2024 [SlideShare]
Monthly Market Risk Update: June 2024 [SlideShare]
 
How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
 
PM pre reads for the product manager framework
PM pre reads for the product manager frameworkPM pre reads for the product manager framework
PM pre reads for the product manager framework
 
Ending stagnation: How to boost prosperity across Scotland
Ending stagnation: How to boost prosperity across ScotlandEnding stagnation: How to boost prosperity across Scotland
Ending stagnation: How to boost prosperity across Scotland
 

Skip the J-Curve: An Intro to Venture Capital Secondary

  • 1. “Skip the J-Curve” – An Intro to Venture Secondary
  • 2. Seed A B C LATER-STAGE IPOs / Big ExitsSTAGE TIME LIQUIDITY C A A A B B 3Y2Y1Y 4Y 5Y 6Y 9Y8Y7Y 10Y + beyond Buy fund secondary @ 25-50% discount D C B D “Buy Unicorns on Sale” Invest in VC funds that are already winning “Skip the J-Curve” Avoid the first 5 years of risky bets FUNDS COMPANIES VALUE RISK
  • 3. 3Y 4Y2Y1Y 5Y 6YTIME 7Y 8Y 11Y 12Y10Y9Y 13Y 14Y 15Y 7 year vehicle 1X Faster return of principal 10-15 year vehicle Better performance 0.5X 3-5X 1-2X VC Fund Secondary Typical VC Fund Benefits: Faster Growth, Faster Liquidity
  • 4. What’s the Difference between Fund Secondary and Company Secondary? DIVERSIFIED: less risk exposure LESS COMPETITIVE: less activity, fewer buyers BIGGER DISCOUNTS: 25 - 50% D B D C B C Company (Direct) SecondaryFund Secondary CONCENTRATED: more risk exposure MORE COMPETITIVE: more buyers and sellers SMALLER DISCOUNTS: 0 - 20% FUND COMPANIES SLICE of LP interests across PORTFOLIO Equity stake in a SINGLE COMPANY D C B PVC advantage
  • 5. Why are Discounts BIGGER for Fund Secondary than Company Secondary? D C B Fewer Buyers, More Arbitrage Because there are fewer buyers specializing in Fund Secondary and because many sellers are competing for liquidity, buyers have greater leverage relative to sellers. Fund Secondary is a buyer’s market. Basket of Assets, Harder to Value Fund Secondary is often heavily discounted because it’s more complex to evaluate a basket of assets than just a single company. As former managers and LPs in over 40 venture funds, PVC has extensive experience evaluating multi-asset portfolios. Fund Secondary is a buyer’s market… but only for buyers who know what they’re doing. Unicorns Matter, Horses Discounted Larger companies close to IPO or acquisition are in greater demand; smaller companies that are still growing are in less demand. Multi-asset portfolios are valued primarily based on current unicorns; future unicorns and other non-IPO winners are more heavily discounted.
  • 6. LPs and GPs need liquidity and partners for multiple reasons (not just distress). Why do LPs and GPs Sell Winning Portfolios Early? • HNWIs and family offices need liquidity when change happens (death, divorce, retirement) • Corporate LPs change strategy every few years, just as CEOs/CFOs come and go • LPs may need liquidity when purchasing a major asset (e.g., real estate) • Market volatility and uncertainty may increase the need for cash Non-institutional LPs may sell because: • Sell a portion to show realized gains as they raise their next fund • Sell to generate cash for operational expenses, recycling, or distributions • Sell to hedge and take (some) money off the table • Partner (raise capital) to exercise pro-rata rights • Partner (co-invest) to increase investment in follow-on rounds Early-stage GPs may sell (or partner):
  • 7. Secondary Market Growth: Venture Capital vs. Private Equity PE Secondary: 10x Growth from 2000 to 2020 VC Secondary: 10x Growth from 2010 to 2030 2000 2020201520102005 2025 2030 $10B $100B+ $80B* (2018) $38B** (2019 e)$26B Dot-com crash US financial crisis EUR sovereign debt crisis China-US Trade War / CFIUS / Coronavirus $10B Company Secondary (Direct) VC Fund Secondary * https://settercapital.com/media/reports/Setter_Capital_Volume_Report_FY_2018.pdf ** https://www.industryventures.com/estimating-the-size-of-the-secondary-market-for-venture-investments
  • 8. Case Study: Venture Secondary SPVs (Q1/20): $5M secondary in 500 Startups Fund I (2010) • Purchased $7M in LP interests @ 30-45% discounts (42% avg) • 4 Unicorns: Talkdesk, Lucid, Intercom, Udemy (~80% of portfolio) • Previous IPOs: Twilio (2016), SendGrid (2017), The RealReal (2019) > 3x Projected net return to LPs: in 5 years 1X 2X 3X 4X 2021 2022 2023 2024 2025 est. 1x principal returned in 2-3 yrs 1.5x immediate markup (due to discount) 0.47 0.45 0.54 0.87 1.27 3.60 1.0x invested capital 2020 Total Source: PitchBook, July 2020 * Undisclosed. Company Val Latest Funding Round, Lead Investors $3B Q3 / 20 $143M Series C, Franklin Templeton $1.0B Q2 / 20 $52M Series D, ICONIQ, Spectrum, Meritech $1.2B Q2 / 18 $125M Series D, Kleiner Perkins $2.0B Q1 / 20 $50M Series E, Benesse Holdings, IVP $300M * Q1 / 20 [ Undisclosed ] $300M * Q3 / 20 [ Undisclosed ] ** Q2 / 20 $251 Series C Itochu, Visa, Soros, PayPal [ other ] - Notable: Smule, Flywire, KiwiCo, Conekta 5-Year Projected Distributions and Returns 2.2x gross after Q2 FMV Realized Returns Unicorns Non-Unicorns
  • 9. 1 We buy secondary interests in top- performing VC funds and portfolio companies, from LPs and GPs who want early liquidity. 2 We buy VC portfolios at 5-10 years maturity, after winners are already winning and growth is accelerating. 3 Our portfolios contain pre-IPO unicorns, after they have raised Series B/C/D financing from top- tier institutional VCs. 4 We have invested in thousands of companies across 20 VC funds with over 100 exits, 15 unicorns, and 5 IPOs. Forbes Midas List, 2016 and 2017. 5 We are experienced investors and startup veterans who worked at PayPal, eBay, Founders Fund, and 500 Startups. We’ve spent 50 years in Silicon Valley. 6 We buy VC portfolios after losing assets are written off, when distributions are already happening. We expect a quick 1X return of principal within 3-5 years, and 3X or better in 5-7 years. Reasons to Invest with Practical Venture Capital Established Portfolio WinnersVC Secondary @ 25-50% DiscountsSilicon Valley Network Forbes Midas List Top 100 VCs Access to Pre-IPO Unicorns Faster Liquidity, Returns in 5 Years
  • 10. TOP 100 GLOBAL VCs 2017 (#68), 2016 (#96) 15+ UNICORNS / 5 IPOs Dave McClure General Partner BS, Engineering, Applied Math Johns Hopkins University Aman Verjee General Partner FORMER COO 500 STARTUPS FORMER CFO SONOS (NASDAQ: SONO) FORMER CFO EBAY NORTH AMERICA (NASDAQ: EBAY) FINANCE & STRATEGY PAYPAL (NASDAQ: PYPL) BA, Economics Stanford University JD, Harvard University Stephanie Shorter Investor Relations Jake Block Senior Advisor NEUROSCIENCE PROFESSOR VANDERBILT UNIVERSITY PhD, Behavioral Neuroscience Washington State University HOW TO VC VC Book Co-Author BRAIN + BEHAVIOR CHANGE EXPERT Consultant to 50+ startups ACCELERATOR NEUROTECH LEAD Transformative Technology Academy + Conference MANAGING PRINCIPAL JBB CAPITAL MBA, Finance London Business School EXECUTIVE DIRECTOR, EUROPEAN INSTITUTIONAL EQUITY SALES NOMURA SECURITIES PRIVATE BANKER + DIRECTOR DEUTSCHE BANK San Francisco office ASSISTANT VP, ACQUISITIONS MARCUS & MILLICHAP / SOVEREIGN INVESTMENT CO. DIRECTOR OF MARKETING PAYPAL (NASDAQ: PYPL) VC, FOUNDERS FUND INVESTOR, FACEBOOK fbFUND Taught “VC Unlocked” at Stanford University FOUNDER MANAGING PARTNER $500 AUM / 20 VC funds JBB
  • 11. For illustrative purposes only, not drawn to true scale. Based on fund financials, as at 6.30.20. 18 UNICORNS FLYWIRE TALKDESK INTERCOM CANVA IPSY UDEMY REDDIT GITLAB FABFITFUN THE REALREAL 4 UNICORNS CREDIT KARMA SENDGRID TWILIO LYFT 2004-09 2010-15 DMC angel FF Angel Founders Fund II 500 Startups F1 500 Startups F2 500 Startups F3 $85M $2.5M $1M $175M $40M $180M 20% >50% >50% $44M $29M $226M $124M 23.6% 12.8% 12.1% 5X 65X 40X 5.6X 2.4X 1.8X Net IRR Net TVPI AUM $1.6M NAV ~20% $325K PORTFOLIO PERFORMANCE Dave McClure / Founders Fund / 500 Startups 2004-09 2008-09 2009 2010-11 2012-13 2014-15 Facebook fbFund Founders Fund II, Accel X CREDIT KARMA SENDGRID TWILIO GRAB STRIPE BUKALAPAK LUCID VTS