Why Secondary Markets Are Eating the IPO | All-In Liquidity Secondary Markets Panel

2026-06-07 - 40 min - source - Read full transcript

Jason Calacanis (host)Chamath Palihapitiya (host)Kelly RodriguezGavin BakerBrad Gerstner

Key insights

Secondary markets have overtaken IPOs and M&A as the main way late-stage investors and employees get liquidity.

Brad Gerstner's opening data showed secondary transaction volume roughly double the 2021 peak, with secondaries now trading at a ~106% premium to last valuation versus an 80% discount to fair value a few years ago - a sign demand for private-company liquidity has outrun supply.

secondary-markets

Employee secondary sales made up 31% of primary venture activity in 2025.

People buying into Anduril, Anthropic, and SpaceX secondaries now represent a third of all primary venture dollars deployed, reflecting how much capital is chasing exposure to a handful of breakout private names rather than funding new companies.

secondary-markets

Companies stay private longer mainly to avoid public-market scrutiny, not for a defensible business reason.

Gerstner and Baker both said outright they see no good reason to delay an IPO once a company can access ample private capital; the real driver is founders wanting to avoid being 'under a microscope' and to keep making decisions without rigorous outside pressure-testing.

staying-private-longer

Zuckerberg has said Facebook's HTML5-vs-native-apps stumble would have been caught sooner if Facebook had been public earlier.

Calacanis recounted the internal 2010 debate (his own app-first pitch losing to Brett Taylor's HTML5 bet) and Zuckerberg's later comment that constant, rigorous questioning from public-market investors - which private investors don't provide - would have surfaced the mistake faster.

staying-private-longer

Private investors are structurally sycophantic because they need continued access to future funding rounds.

Panelists argued that as a private CEO you're treated as 'the most special flower' by your board and investors, who soften hard questions to preserve their seat at the table; once a company is public, investors can simply buy or sell rather than needing management's goodwill, which produces more honest scrutiny.

staying-private-longer

Schwab's platform deal gives Forge a pitch that converts retail access into an IPO-allocation asset for founders.

Kelly Rodriguez described pitching Elon Musk on SpaceX SPVs starting in 2018-2019, then later using the resulting retail base (30 million investors wanting $50,000 SpaceX slices) to secure Schwab a formal IPO allocation - a template Forge is now scaling to 46 million Schwab investors and $12 trillion in assets.

retail-investor-access

New interval and closed-end fund products are opening unaccredited retail investors to private-company exposure with $500 minimums.

Today, buying individual secondary shares (directly or via SPV) requires accreditation, but new listed products covering ~60 companies including SpaceX let unaccredited investors in; Baker cautioned these closed-end funds often trade at premiums disconnected from the underlying shares' real value, calling it a 'FOMO bet.'

retail-investor-access

Gerstner warns retail investors against yoloing into hot private names and advises sizing in gradually.

Asked on CNBC whether he'd put a fresh $100,000 fully into the market, Gerstner said no - he'd deploy roughly 30% and scale in over time, arguing nobody can reliably pick tops or bottoms and that investors chasing SpaceX-style 3x returns on IPO day are often disappointed.

retail-investor-access

Long-only mutual funds are allowed 15% private-market exposure by the SEC but typically self-cap at 3-7%, creating pent-up demand that unlocks at every IPO.

Baillie Gifford was forced to sell its SpaceX position last year purely for hitting its self-imposed cap; as companies go public and lockups expire, funds like Fidelity, Capital Research, and Wellington that are currently locked out by their own limits will release hundreds of billions of dollars of fresh late-stage demand back into the market.

venture-portfolio-management

VC firms without exposure to a top breakout company face rising 'franchise risk' that pushes some into speculative bets.

Gerstner said firms lacking material exposure to one of the handful of trillion-dollar-plus companies see weak DPI regardless of headline returns, and some respond by writing speculative 'call options' on hype-driven companies just to have a story for LPs - behavior he distinguishes from disciplined investing.

venture-portfolio-management

Selling pari passu with founders once a company crosses a valuation threshold is now standard practice for top-tier VCs.

Gerstner described systematically selling alongside founders starting around $500M in valuation to return DPI to LPs and free up capital for new deals - a shift from years ago when founders pressured him not to sell during the 2021 zero-rate peak; private sales stay invisible to the market, unlike public 13F disclosures.

venture-portfolio-management

Panelists' picks for private companies they'd buy via secondary spanned AI agents, fintech, AI infrastructure, robotics, and space/logistics.

Gerstner named Sierra and Parloa (agent-native customer service); Chamath named Revolut (neo-bank); Baker named Arrcus and DriveNets (AI-data-center networking for disaggregated inference) and Neura Robotics (German logistics robotics); Calacanis named Vast (space stations) and Zipline (drone delivery, credited with cutting African maternal mortality before expanding to the US).

private-market-investment-picks

Media referenced

BG2 Pod - podcast - Brad Gerstner's own podcast, referenced in banter about the panelists becoming honorary besties

Companies

Forge Global - Kelly Rodriguez is CEO; Forge runs the secondary-market platform partnering with Schwab to open private-company access to retail investors
Charles Schwab - Schwab's deal with Forge gives the platform access to 46 million retail investors and $12 trillion in assets
SpaceX - Cited repeatedly as the model for orderly, decade-long employee liquidity programs and for retail distribution at its IPO price
Anthropic - Hot AI company driving heavy secondary demand; publicly asked holders to dissolve unauthorized SPVs built on its shares
OpenAI - Also reportedly asked holders to dissolve unauthorized SPVs trading its private shares
Anduril - Named alongside Anthropic and SpaceX as a company retail buyers chase into secondary deals without discernment
Databricks - Cited as a $200B example of the trend toward staying private much longer
Sierra - Brett Taylor's agent-native customer-service company; Gerstner's pick for a private company he doesn't own but would buy
Parloa - European agent-native customer-service company Gerstner also flagged as attractive, with open-model disruption risk
Revolut - Neo-bank Chamath got excited about after a pitch from Thomas Laffont; cited as a next-generation rebuild of a regulated incumbent
Coinbase - Chamath's earlier fintech holding, mentioned in passing while explaining he had underweighted fintech until the Revolut pitch
Robinhood - Chamath's earlier fintech holding, same context as Coinbase
Arrcus - AI-data-center networking company Baker highlighted for the 'disaggregation of inference' trend (prefill/decode split)
DriveNets - Second networking pick alongside Arrcus for the same disaggregated-inference infrastructure thesis
Neura Robotics - German AI-powered logistics robotics company Baker called out as a quiet, well-funded, ~$100M-revenue business
Vast - Space-station company Calacanis backed on the thesis that Elon-driven launch-cost declines make orbital infrastructure viable
Zipline - Drone-delivery company Calacanis backed; credited with cutting delivery costs and maternal mortality in African countries before expanding to the US
Fidelity - Long-only mutual fund manager Gerstner's former employer, cited as an example of funds self-capping private allocations well below the SEC's 15% ceiling
Baillie Gifford - Forced to sell its SpaceX stake last year purely because it hit its self-imposed private-allocation limit
Capital Research - Cited alongside Fidelity and Wellington as a long-only manager under-allocated to private markets relative to the SEC's 15% cap
Wellington - Same context as Capital Research

Techniques and frameworks

DPI (distributions to paid-in capital) - The VC return metric Gerstner and Baker say now drives active secondary selling - funds without exposure to a breakout company have weak DPI regardless of paper returns
Selling pari passu with founders - Gerstner's practice of selling a proportional slice alongside the founder once a company crosses a valuation threshold (he cites starting at $500M), to return capital to LPs while staying invested
SPV structuring for private-share access - Special purpose vehicles that let outside investors buy exposure to hot private names; both Anthropic and OpenAI have pushed back on unauthorized SPVs trading their shares
Disaggregation of inference (prefill/decode split) - Baker's thesis that AI data centers need specialized chips and new networking to handle prefill and decode as separate, specialized workloads

Summary

This is a live panel recorded at what appears to be an All-In event, moderated by Jason Calacanis and Chamath Palihapitiya, with guests Kelly Rodriguez (CEO of Forge Global), Gavin Baker (Managing Partner and CIO of Atreides Management), and Brad Gerstner (Altimeter Capital, host of BG2 Pod). The premise: secondary markets for private-company shares have exploded, now trading at roughly double 2021's peak volume and at a premium to fair value rather than the discount they carried a few years ago, and they're increasingly competing with IPOs and M&A as the main exit path for late-stage investors and employees.

The panel's first thread is why companies stay private so long. Baker argues it's necessary given how much cash-rich-but-illiquid wealth builds up in employees over 7-15 years at a company like SpaceX, but both he and Gerstner are blunt that there's no good business reason for the delay itself - it mostly reflects founders wanting to avoid public-market scrutiny. Calacanis recounts Zuckerberg's own admission that Facebook's costly HTML5-vs-native-apps misstep (which Calacanis lost internally to Brett Taylor) would likely have been caught sooner under the rigorous questioning of public investors, since private investors tend toward sycophancy - they need continued access to future rounds and so soften hard truths.

Kelly Rodriguez makes the case for Forge's Schwab partnership as the next phase of legitimizing this market: regulated fund structures rather than ad hoc SPVs, giving Forge's platform access to Schwab's 46 million retail investors and $12 trillion in assets. She recounts pitching Elon Musk on SpaceX SPVs back in 2018-2019 and later parlaying that retail base into a formal Schwab allocation at the SpaceX IPO price - the template she's using to court the "next Elon." The conversation turns to access rules: today only accredited investors can buy individual secondary positions, but new interval and closed-end funds (covering ~60 companies including SpaceX) are opening $500-minimum access to unaccredited retail, alongside talk of a "sophisticated investor test" the SEC chair discussed on the show. Gerstner is careful to temper enthusiasm here, warning that closed-end funds often trade at premiums disconnected from underlying value and urging retail investors to size into positions gradually rather than yolo in at the top.

On the institutional side, Gerstner and Baker describe a structural shift in how top VCs manage portfolios: rather than only buying, they now actively sell alongside founders (pari passu) once valuations cross a threshold - Gerstner cites starting around $500M - to return DPI to LPs and recycle capital, a practice founders resisted during the 2021 zero-rate peak but broadly accept now. They flag a growing "franchise risk" for firms without exposure to one of the handful of trillion-dollar-plus breakout companies, which pushes some into speculative, story-driven bets. Long-only mutual funds add another demand source: SEC rules cap their private allocation at 15%, but most self-impose 3-7% limits (Baillie Gifford was forced to sell SpaceX purely for breaching its own cap), meaning every future IPO and lockup expiry releases pent-up institutional buying.

The panel closes with a lightning round of private companies each would buy via secondary if they could: Gerstner picks Sierra and Parloa (agent-native customer service), Chamath picks Revolut (neo-bank), Baker picks Arrcus and DriveNets (AI-infrastructure networking for disaggregated inference) and Neura Robotics (German logistics robotics), and Calacanis picks Vast (space stations) and Zipline (drone delivery, whose maternal-health impact in Africa he credits for later winning him over).

Notable Quotes

"There are a lot of people who are very wealthy on paper but actually cash poor... It's hard if you can't buy a nice house for your family. It's hard if you can't afford to do nice things." - Gavin Baker

"If you had $100,000 of fresh capital and you were sitting at home, is today the day that you would shove it all into the market? ... I think about it in sizes. I'm never going to pick the bottom, I'm never going to pick the top, but I certainly wouldn't be putting it all to work." - Brad Gerstner

"We've got 30 million retail investors that would like to have a $50,000 slice of SpaceX." - Kelly Rodriguez

"If you do not have material exposure to one of these trillion-dollar-plus companies... your returns are not only not going to be good, but you're not going to have DPI." - Brad Gerstner