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

Summary

Brad Gerstner (Altimeter), Gavin Baker (Atreides) and Kelly Rodriques (Forge CEO) sit with the Besties for a 40-minute Liquidity Summit panel that opens with Gerstner’s headline chart: secondary market volume is now 2x the 2021 peak, employee-secondary transactions are 31% of all primary venture activity in 2025, and the bid-side has flipped from an 80-cent discount to a 106-cent premium. Secondaries are no longer a workaround — they’re the principal exit competing with IPOs and acquisitions. Friedberg flags the wild-west underbelly: 10% loading fees, double-carry SPVs, and “gray market off-market stuff” that Anthropic and OpenAI are now demanding be dissolved.

The panel’s most interesting argument is that staying private is bad for the company. Gavin Baker delivers the line of the day — “I don’t think there is actually a good reason to stay private longer” — and tells the Mark Zuckerberg story: had Facebook been public during the HTML5-vs-apps debate, the rigorous pressure-testing from public market investors would have killed the HTML5 bet years sooner. Chamath confirms the inside version: he asked Zuck for a billion to build a phone in 2010 (“the third leg of the stool” with Android and iPhone), was told they didn’t have it, and Zuck conceded he could’ve had it from the public markets a year earlier than the actual IPO. Gerstner generalizes: “private investors are often selling to management teams” — you tell management what they need to hear to stay in the next round.

The middle of the conversation is the mechanics: Kelly Rodriques explains why Forge sold to Schwab (46M investors, $12T) and how the next phase is interval funds with 60 companies including SpaceX available at $500 minimums to unaccredited investors (different from the FOMO closed-end funds that Robinhood and Naval are launching, which Rodriques warns have “no bearing to reality”). Gavin Baker lays out the structural setup: long-only mutual funds (Fidelity, Baillie Gifford, Wellington, T. Rowe, Capital Research) are capped at 3-5% private exposure (Baillie Gifford was forced to sell SpaceX) — so when these go public and the lockup expires, hundreds of billions of dollars of late-stage demand come back to the public bid. Gerstner closes by warning retail to size in carefully and noting that he sees venture firms without trillion-dollar-private exposure “doing unnatural acts for optics,” writing call options on neolabs because their relative DPI is collapsing. The Besties’ picks for under-$50B secondaries you’d want to own: Sierra (Brett Taylor), Revolut (Chamath’s Laffont pitch), Arya + DriveNets (networking disaggregation), Neuro Robotics (German AI-powered logistics, $100M revenue), Vast (space stations), and Zipline.

Highlights

”There Is No Good Reason to Stay Private Longer”

“I don’t think there is actually a good reason to stay private longer.” — Gavin Baker, 4:33

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Secondaries: 2x the 2021 Peak, 31% of Primary VC

“Look at that, Jason, relative to the ‘21 peak. We thought that was crazy at the end of ‘21. We’re double that now in terms of secondary transactions… people buying into Anduril, Anthropic, SpaceX, now represents 31% of all primary venture activity is buying into these secondaries in 2025.” — Brad Gerstner, 0:54

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Zuck, the Billion-Dollar Phone, and the HTML5 Mistake

“I went to Zuck and I said I need a billion dollars to build this phone. And we are in this moment in 2010 where we can have the third leg of the stool. There’s Android, there’s iPhone, neither really taken off yet. And he’s like ‘we don’t have a billion’. And I said ‘but the public markets will give us a billion’. And he said no, but then we went public a year later. But that year made all the difference.” — Chamath Palihapitiya, 6:32

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Private Investors Are Sycophantic Salesmen

“When you’re private, you do not get clean information as the CEO and the management team because people want access. And once you give the truth or you ask the hard questions, you might lose access. The sycophantic nature of private markets is real.” — Brad Gerstner, 8:23

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”We’re Selling Into This”

“We are selling into this… Venture capitalists don’t think about the sell part. They think about the buy part. So one of — if we’re going to stay private for longer and we’re going to have trillion dollar private companies and Databricks at 200 billion dollars, you gotta think about is today a day we should be selling some and returning it to our investors?” — Brad Gerstner, 16:38

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”This is Nothing Relative to 99 and 2000”

“99 was Vegas on a Friday night after way too many drugs okay like it was out of control nuts. CMGI had no revenue and the stock went from two dollars to two thousand dollars over the course of six months, they’d buy Foxboro stadium, they’re on the cover of Time Magazine and they’re out of business two years later.” — Brad Gerstner, 31:04

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Key Points

Secondaries 2x the 2021 peak (1:26) — Record volume; secondary market at historical highs
Employee secondaries: 31% of primary VC activity (1:26) — Buying into Anduril, Anthropic, SpaceX
Premium of 106 cents on the dollar (1:26) — Flipped from 80-cent discount; Q1 2025
SPV wild west: 10% loading fees + double carry (2:45) — Friedberg’s gray market warning
Wealthy on paper, cash poor (3:39) — Year 7-15 employees need to buy a house
No good reason to stay private (4:33) — Baker; Chamath agrees
The HTML5 cataclysmic debate (5:33) — Chamath vs Bret Taylor; Zuck picked Bret, spent 3 years unwinding
The 2010 billion-dollar phone ask (6:32) — Public markets would have given Facebook the capital a year earlier
Private investors are sycophants (8:23) — Gerstner: telling management what they need to hear to preserve access
Elon as the exception (8:42) — Baker: “actively seeks out negative feedback”
Time to Get Fit (Oct ‘22) (9:06) — Gerstner’s second deck to Zuck after the 2012 first
Public CEO job is “much less fun” (9:51) — Rodriques: turn from visionary to investment manager
SpaceX private for 24 years (10:28) — Extended life via internal liquidity programs
Schwab-Forge deal democratizes (10:52) — 46M investors, $12T platform
First SpaceX SPV in 2018-2019 (12:18) — “Totally permissioned” by Elon
30M retail wants $50K SpaceX slice (12:27) — Schwab got an IPO allocation
Gerstner cautions retail on CNBC (14:39) — “Time to be careful” on YOLOing double-fee SPVs
80% of Americans think it’s a scam (15:00) — Destabilization risk from trillion-dollar private value
Stack-of-100 strategy (15:33) — Gerstner: put 30 to work today, not 100
“We are selling into this” (16:34) — VCs returning capital to LPs via secondaries
Public vs private sell signaling (17:26) — In publics 13F-delayed; in privates it’s a direct founder conversation
Interval funds at $500 unaccredited minimums (20:32) — 60 companies including SpaceX
Closed-end FOMO funds are detached from reality (21:16) — Robinhood and Naval USVC; Rodriques: “no bearing to reality”
Mean returns will look incredible, median still shit (21:49) — Jason’s framing question
VCs without trillion-dollar exposure doing unnatural acts (22:09) — Writing “call options” on neolabs for franchise-risk optics
15% SEC mutual-fund cap on privates (23:23) — Most self-impose 3-7%; massive pool of capital
Baillie Gifford forced to sell SpaceX (24:00) — Regulatory cap example
Hundreds of billions of late-stage demand coming back (24:34) — When IPOs move out of the private bucket, dry powder unlocks
SEC sophisticated investor test coming (24:57) — Invest America accreditation reform
Retail wins when they got in 2018-2019 at $30B SpaceX (27:34) — Baker: look “down market” away from CNBC names
IPOs are “still massively mispriced” (28:05) — Gerstner disagrees that Gurley’s reforms fixed it
14 levered ETFs launching on SpaceX IPO day (28:19) — Top-of-market signal
Sacks: “Nothing relative to 99 and 2000” (30:38) — CMGI as the canonical example
CMGI story (31:04) — $2 to $2,000 in six months, bought Foxboro Stadium, gone two years later
Better compare to 2021 (31:04) — Top-end of range; 10-20% semi index correction possible
Sierra (Brett Taylor) as Gerstner’s pick (33:13) — Salesforce-agent-native; downside is OpenAI/Anthropic do it
Parlo as Sierra’s European counterpart (33:17) — In Gerstner’s portfolio
Chamath’s Revolut conversion (33:49) — Pitched backstage by Thomas Laffont; next-gen neobank
Arya + DriveNets (networking disaggregation) (34:45) — Baker’s picks; AI infra supercycle
Disaggregation of inference into prefill and decode (35:00) — Networking reinvention thesis
Neuro Robotics (Germany, $100M revenue) (35:38) — Kelly’s pick; AI-powered logistics
Vast for space stations (36:20) — Chamath’s SPV; price-of-launch thesis
Zipline as the rare African-tested autonomous play (36:30) — 90-95% maternal mortality reduction
The Zipline tether innovation (36:30) — Drone stays up, drops a string; no landing, no blade danger
Chamath’s barbell strategy (38:32) — Reconstructed firm; rejected Zipline seed, took late stage

Mentions

Companies

Forge (0:02) — Kelly Rodriques is CEO; sold to Schwab
Schwab (9:13) — 46M investors, $12T; Forge acquirer
Atreides (0:19) — Gavin Baker’s firm
Altimeter (0:33) — Brad Gerstner’s firm
SpaceX (1:26) — 24 years private; 1.75T IPO; first SPVs 2018-2019
Anduril (1:26) — Top secondaries target
Anthropic (1:26) — Demanding SPV dissolution
OpenAI (9:26) — Same SPV stance as Anthropic
Databricks (17:26) — $200B private valuation reference
Facebook / Meta (5:29) — The HTML5 story; “Time to Get Fit”
CMGI (31:04) — Dot-com poster child; bought Foxboro Stadium
Fidelity / Baillie Gifford / Wellington / T. Rowe / Capital Research (23:23) — Long-only mutual funds; 15% SEC cap
Robinhood (21:10) — Just launched closed-end private fund
Sierra (Brett Taylor) (33:13) — Salesforce-agent-native; Gerstner’s pick
Parlo (33:17) — European Sierra; Gerstner-owned
Revolut (33:49) — Chamath’s pick after Laffont backstage pitch
Coinbase / Robinhood (33:49) — Chamath’s prior fintech bets
Arya (34:45) — Networking disaggregation; Baker pick
DriveNets (34:45) — Networking disaggregation; Baker pick
Neuro Robotics (35:38) — Kelly’s pick; Germany; $100M revenue
Vast (36:20) — Chamath SPV; space stations
Zipline (36:30) — Drone logistics; African maternal mortality

Products & Technologies

Interval funds (21:07) — 60 companies including SpaceX at $500 minimums
SPVs (Special Purpose Vehicles) (2:45) — Gray-market underbelly; 10% loading fees, double carry
HTML5 (5:29) — The mobile-web bet Facebook spent 3 years unwinding
13F (17:50) — Delayed public-market disclosure

People

Brad Gerstner (Altimeter) (0:33) — Lead voice on Invest America, fifth bestie
Gavin Baker (Atreides CIO) (0:19) — Sixth bestie crowned
Kelly Rodriques (Forge CEO) (0:02) — Secondary platform builder
Mark Zuckerberg (4:59) — HTML5 mistake; “had I been public” reflection
Bret Taylor (5:33) — HTML5 advocate; later Salesforce CEO; now Sierra
Elon Musk (8:42) — Permissioned SpaceX SPVs; “seeks negative feedback”
Thomas Laffont (Coatue) (33:49) — Pitched Chamath on Revolut backstage
Bill Gurley (27:54) — Cited on IPO pricing reforms
Keller Rinaudo (Zipline) (36:30) — Founder behind the tether innovation
Naval Ravikant (21:12) — USVC closed-end fund

Surprising Quotes

“The ROI on AI has empirically, factually, unambiguously been possible.” — Gavin Baker, 0:23

“I don’t think there is actually a good reason to stay private longer.” — Gavin Baker, 4:33

“He’s like ‘we don’t have a billion’. And I said ‘but the public markets will give us a billion’.” — Chamath Palihapitiya recounting his 2010 pitch to Zuck, 6:32

“The sycophantic nature of private markets is real.” — Brad Gerstner, 8:23

“We are selling into this.” — Brad Gerstner on Altimeter and secondaries, 16:34

“Venture capitalists don’t think about the sell part. They think about the buy part.” — Brad Gerstner, 17:00

“99 was Vegas on a Friday night after way too many drugs okay like it was out of control nuts. CMGI had no revenue and the stock went from two dollars to two thousand dollars… they’d buy Foxboro stadium, they’re on the cover of Time Magazine and they’re out of business two years later.” — Brad Gerstner, 31:04

“It’s the drone stays up in the air and drops a tether with the box and your burrito. If you grab the tether and you pull it, it just comes down. You don’t have to land like this giant robot in your backyard with blades spinning to kill your dog.” — Chamath Palihapitiya on Zipline, 36:30

Transcript

Kelly Rodriques: 0:00 Everybody wants access to these private markets.

Jason Calacanis: 0:02 Joining us right now to discuss all of this is Kelly Rodriques, the Forge CEO.

Kelly Rodriques: 0:06 We see a world where the private market opens up and is accessible to any US and global investor.

Brad Gerstner: 0:13 There’s 19 companies in the private market AI basket. These companies have grown on average 300%.

David Friedberg: 0:19 Please join us in welcoming Gavin Baker, managing partner and CIO of Atreides.

Gavin Baker: 0:23 The ROI on AI has empirically, factually, unambiguously been possible. Investing is the search for truth.

Jason Calacanis: 0:33 We welcome in Brad Gerstner. Good to be back with you. You have a program called Invest America.

Brad Gerstner: 0:38 I think we have a historic moment right now to get everybody into the game of capitalism.

David Friedberg: 0:46 Do we have a few slides from Brad to kick this off?

David Sacks: 0:48 Yeah, let’s get going.

Jason Calacanis: 0:50 A little thought starter, a little spicy thought starter, like old times.

Brad Gerstner: 0:54 This panel, I actually was backstage, I said, “Gavin, do you know we’re talking about secondaries?” He’s like, “What do you mean?” And I said, “Okay, so here let’s just set this up for everybody. The room’s full of people who are allocators, people who are looking for distributions.” So this is secondary markets over the course of the last decade. This is the amount of money going into VC each year, the amount of money coming out of VC each year. The red line represents the net effect of that. So Chamath, we’re in like five years, right, where a lot more is going in than coming out.

Chamath Palihapitiya: 1:25 Right.

Brad Gerstner: 1:26 But the secondary market is at record volume. So I call these companies quasi-public companies. These are these later stage companies. There’s buying and selling that’s going on every day. Look at that, Jason, relative to the ‘21 peak. We thought that was crazy at the end of ‘21. We’re double that now in terms of secondary transactions. This is the amount of employee secondaries. So this is people buying into Anduril, Anthropic, SpaceX, now represents 31% of all primary venture activity is buying into these secondaries in 2025. Secondaries are now competing with IPOs and acquisitions as the principal way that these guys are exiting. And then the final one is secondaries over the last couple of years were trading at a discount to market. So if we wanted to sell shares in one of our companies to buyers out there, they were willing to give us 80 cents on the dollar in order for us to get liquid so that we could send DPI back to our LPs. Today it’s at 106, so a premium in the market as of Q1 2025.

David Friedberg: 2:45 And this doesn’t include some of the wild west of SPVs that have been unraveled recently, people charging 10% loading fees, double carry, and a lot of gray market off-market stuff. This is also having a profound impact, Gavin, on…

Jason Calacanis: 3:00 employees at these companies that I want to hear about because you’ve seen it up close and personal with SpaceX and they have a very orderly process here. So why don’t we start there. What impact is this having on the employees, Gavin, and then on the market, how orderly is this and who are the buyers? Are the buyers the sucker at the table? Are these family offices, high net worth individuals who keep hearing us talk about Anthropic or SpaceX or Anduril and they just say I have to own the name and they’re not discerning?

Gavin Baker: 3:39 Well, maybe broadening it beyond SpaceX. I do just think if companies are going to be staying private longer, this is absolutely necessary. I think there are a lot of people who are very wealthy on paper but actually cash poor. And if you’re making tremendous sacrifices because you work for a company that you really believe in and you’re contributing a lot to that company, 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,

Jason Calacanis: 4:14 especially in year seven, eight or nine of working at the company and you tell your spouse we’re worth 10 million on paper, 30 million on paper, and you don’t own your home.

Gavin Baker: 4:21 Yeah, or year 15. And so I think this is necessary and important and whether it is good or bad, I think it is very clear that companies are going to stay private for longer.

David Friedberg: 4:33 What’s the reason to stay private longer? Truly.

Gavin Baker: 4:37 I don’t think there is actually a good reason to stay private longer.

Jason Calacanis: 4:42 Hear hear.

Chamath Palihapitiya: 4:43 I completely agree with you too.

Jason Calacanis: 4:46 And why is it happened? This is founders don’t want, let’s just call it what it is, founders don’t want to be under a microscope. They want to build and enjoy life and have an easier than being on the public market microscoped?

Gavin Baker: 4:59 Yeah, I think there is a perception that life as a private company is easier and you have more freedom and you can think long term. I don’t agree with this. I always think about Mark Zuckerberg’s commentary that had he been public, so just, you know, Facebook’s, I won’t call it a near-death experience, but long ago, it’s difficult to believe, but I don’t know, 2010, 11, 12, Facebook did not believe in apps. They believed in something called HTML 6.

Jason Calacanis: 5:29 5. HTML 5.

Gavin Baker: 5:30 HTML 5. HTML 5. HTML 5. Yes, you were the actual expert.

Chamath Palihapitiya: 5:33 No, it was the cataclysmic debate and it was me and Bret Taylor, me versus Bret. I was like apps, I want to go build a phone. Bret was like HTML 5, Zuck picked Bret. Spent the next three years unwinding that decision.

Gavin Baker: 5:46 Absolutely. And Mark Zuckerberg, basically the idea was, you know the iPhone comes out and initially there was not a big app ecosystem and there was a thought that, hey, there’s no need for apps, you’re just going to use the web browser on phone and HTML5 was a way of making websites look mobile native. Yeah, and this seemed like kind of the future to a lot of very smart people including Google, Facebook, but it was not the future. It was wrong. And what Mark Zuckerberg has said, I think several times in public, is he profoundly believes that had he been a public company, when there was this internal debate between Chamath and Brad…

Chamath Palihapitiya: 6:32 And the detail was actually I went to Zuck and I said I need a billion dollars to build this phone. And we are in this moment in 2010 where we can have the third leg of the stool. There’s Android, there’s iPhone, neither really taken off yet. And he’s like ‘we don’t have a billion’. And I said ‘but the public markets will give us a billion’. And he said no, but then we went public a year later. But that year made all the difference.

David Sacks: 6:54 Made all the difference.

Gavin Baker: 6:55 Made all the difference. And he has said that had I had the constant pressure testing from public market investors… there’s a dynamic I was talking to another CEO here this morning. When you’re the CEO of a private company, you are the most special flower to all of your investors. You’re like, you are as important to your board members, particularly if you’re really successful, maybe as the board members’ families or parents. The board members think about you a lot. Once you’re public, you’re one of thousands of companies, and that’s its own dynamic. But the consequence of this is that private investors are often selling to management teams. And at some level that can mean telling management teams what they need to hear because you want to be able to keep participating in the rounds. Once a company’s public, you can buy or sell as you wish, and this means that investors feel freer to give companies’ management teams… and Zuckerberg said ‘had I been public, had I been getting rigorous, detailed questions from really smart public equity investors, I think I would have made the bet on…’

Chamath Palihapitiya: 8:03 And this is by the way the second unwritten story of that, which has never been said. He called me, he’s like ‘hey man, what the fuck is going on over there?’ And I was like ‘yeah, I know’ because I had just left. And then we wrote a deck and I walked over to Zuck and I was like ‘here’s the deck of what you need to do. Do these things.’

Brad Gerstner: 8:23 Well, this is a key point I think, Gavin. When you’re private, you do not get clean information as the CEO and the management team because people want access. And once you give the truth or you ask the hard questions, you might lose access. The sycophantic nature of private markets is real.

Chamath Palihapitiya: 8:41 100%.

Gavin Baker: 8:42 No, an exceptional CEO, Elon, seeks out negative feedback. He’s looking for that, and actively discards, but not many CEOs maybe are wired that way. By the way, I do think we have to give Brad credit. That was a very good deck you sent back in 2012.

Chamath Palihapitiya: 9:00 No, because he did a second one. He had a…

Jason Calacanis: 9:00 The second one. He did the open letter to Zuckerberg at the end of… was that at the end of ‘22?

Brad Gerstner: 9:06 22. October ‘22.

Jason Calacanis: 9:07 What did he call it? Get Fit? What was the name of it?

Brad Gerstner: 9:09 Time to get fit.

Jason Calacanis: 9:10 Time to get fit. That was impactful. Those were two very impactful… Okay, so look, there’s… you’re hearing the bulls on going public, but Kelly, take the red team the other side, because you’re on the other side. You built a private business, you sold it to Schwab. So clearly, one of the largest financial institutions now is going to ram its way into this market. But then you’re seeing a lot of pushback. Anthropic is like, ‘Hey, dissolve these SPVs.’ OpenAI, I think, was saying today now, ‘Dissolve these SPVs.’ Should we dissolve the SPVs? Where are they coming from, and why are you on the right side of history? And have you had to dissolve any of the ones on your marketplace?

Kelly Rodriques: 9:50 No. Look, I think that first of all, being a private company CEO for most of my career and then being a public company CEO for three years, I recognize the job is incredibly different. It’s much less fun.

Jason Calacanis: 10:05 Hold on, hold on. What do you mean when you say much less fun?

Kelly Rodriques: 10:07 Turning into an investment manager primarily as a public company CEO is a very different job than being a visionary, product-first, first-principles business. When you become a public company CEO, everything changes. And I would say in the world we’re in now, the kind of capital you can raise, the kind of capital that was represented in the very last discussion, allows you to extend your private life. SpaceX, a private company for 24 years. But the reality is these SPVs that are now emerging because these companies are getting so big is because a market’s trying to happen. And a company like SpaceX has done this extraordinarily well. They’ve run essentially liquidity programs for almost a decade because there’s so much pent-up interest in both being an investor and getting liquidity for some of the reasons that Gavin was mentioning. So I think what we see now is the next phase of this. This Schwab deal with Forge basically says to the world, this is a real asset class. It’s more than just secondaries. We’re going to put these companies’ equity into fund products, into very well-managed, regulated SPV structures because they do serve a purpose in the market.

Brad Gerstner: 11:14 Yeah, but if you’re… how do you convince Elon specifically to give you access to that when he wants to do it himself, and he has a team, and every six months he runs it himself? How do you get access to that? What’s your pitch to the next Elon?

Kelly Rodriques: 11:22 Here’s the pitch. The pitch is you’re going to go from being a private company eventually to a public company. What Schwab represents is 46 million investors and 12 trillion dollars. This will change capital access and the way that you distribute your shares moving from private to public.

Jason Calacanis: 12:15 How did that work when you pitched him on that? Were you successful?

Kelly Rodriques: 12:18 It was, I’ll tell you, we got our first SPVs on SpaceX in 2018 and 2019.

Jason Calacanis: 12:24 Were they… was he okay with it?

Kelly Rodriques: 12:27 Absolutely. Totally permissioned. And then, as we got closer to the IPO, we said, guess what? We’ve got 30 million retail investors that would like to have a $50,000 slice of SpaceX. And he went out publicly and talked about having broad-based distribution at the IPO price, and Schwab was named one of the IPO allocations.

Brad Gerstner: 12:52 Beautiful pitch. I do think this is actually a very effective pitch. I think a lot of these CEOs, they’re a little bit ambivalent about, and I think they understand that maybe the institutions who are investing in these private rounds, you know, they may represent unions, they may represent retirement plans, but I do think they like the idea of democratizing access, and if they’re building something that they think is great, giving ordinary Americans an opportunity to participate. I actually think that’s a very appealing story to a lot of these CEOs.

Jason Calacanis: 13:25 Well, because they’re capitalists and they understand the power of equity. So, Brad, what is the downside then of, because you’re part of the Go-Direct movement now, BG2 pod, officially 5th bestie, Gavin officially 6th bestie. Gavin, that’s new news. We officially made you 6th bestie today. So, congratulations.

Gavin Baker: 13:46 But does that mean I’m definitively behind Brad? Because that’s the real news.

Jason Calacanis: 13:48 You’re standing behind Brad. You’re just giving him that big bear hug right behind him.

Gavin Baker: 13:53 Wow. So are you saying I’m the big spoon?

Jason Calacanis: 13:54 You’re the big spoon now. In the side drawer with the extra spoons. But, Brad, it’s getting very weird very quick. In all seriousness, with great power comes great responsibility. Sometimes the enthusiasm people can have can exceed reality.

Brad Gerstner: 14:18 Correct.

Jason Calacanis: 14:19 Going direct, you’ve become more measured, I’ve noticed, as your profile has gone up. I think all of us have to just make sure people don’t blindly follow trades. And you were talking stuff down on CNBC a couple of times saying, hey, I don’t think the average American needs to be in some of these companies, there’s time.

Brad Gerstner: 14:39 I get worried at this point in the markets, particularly on CNBC where you’re talking to retail investors at home. I was one of those retail guys looking up to everybody on this stage, trusting everybody on this stage, and when people are telling you to YOLO into double-fee structure SPVs and all this, it’s time to be careful. To do your work, to be thoughtful. We’re in this because we want this to be durable democratization for a long time. We want to build trust among those who feel left out and left behind in capitalism. We all think that we need to go public sooner. The reason I think — it is destabilizing when you’re creating trillions of dollars in private value and 80% of Americans think it’s a scam where they’re left out and left behind.

Jason Calacanis: 15:30 And then they come rushing in and they could be maybe playing not so good cards.

Brad Gerstner: 15:33 Right. So all I’m saying — they asked the question on CNBC last week, 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? And I said no, I think about it in sizes. We just had two of the biggest months in the last 10 years in the public markets. So if I had a stack of 100, I may put 30 to work today. 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. I’d say the same thing about late stage privates, people who are YOLOing into this stuff and then they feel really disappointed. They’re like, hold on a second, I bought the SpaceX IPO and it didn’t go up 3x.

David Friedberg: 16:21 But let me ask you then, do you view this as exit liquidity for you? Like would you shape your portfolio and returns and increasingly say, you know what, I don’t know when this guy’s going to go public, let me just pump the stuff out, let me get the distribution, let me send it to my LPs and just call it a day?

Brad Gerstner: 16:34 We are selling into this.

David Friedberg: 16:38 You’re selling into this.

Brad Gerstner: 16:38 Right. So I have LPs in this room who say, listen, we invested in your VC5 or VC6 seven or eight years ago. If you can go sell a slice of that at 4 or 5x and we get DPI and it’s priced really high, then go sell some of it. And we often don’t talk about this in Ventureland. Half of what we do is in the public markets. Gavin and I get up every morning and we think to ourselves, should we buy today or should we sell today? Venture capitalists don’t think about the sell part. They think about the buy part. So one of — if we’re going to stay private for longer and we’re going to have trillion dollar private companies and Databricks at 200 billion dollars, you gotta think about is today a day we should be selling some and returning it to our investors?

David Friedberg: 17:26 But doesn’t it create though, as what Jason said, these very complicated personality dynamics where maybe you get shut out of a new company, maybe you get shut out of an incremental round, and there’s bad blood because you’re a credible investor and there’s this signaling risk, whereas in the privates if you and Gavin decide to sell, nobody knows.

Brad Gerstner: 17:47 Well no, in the private…

David Friedberg: 17:49 Sorry, in the publics nobody knows.

Brad Gerstner: 17:50 Exactly. In the publics, they don’t know until our 13F comes out, okay? But in the private market, it’s always a conversation between me and the founder to say, listen.

Chamath Palihapitiya: 18:00 We’re gonna sell 30% of our position.

Jason Calacanis: 18:02 They never like it, Chamath. They’re always like, we wish you wouldn’t do that. They don’t want it known, etc.

Chamath Palihapitiya: 18:09 But my job as a fiduciary to the LPs in this room is to do that.

Jason Calacanis: 18:11 It does feel, Gavin, like we have crossed over for early stage venture to a point in which there is a third way. Either your company had M&A, and we saw in the presentation yesterday that during the wrath of Lina Khan there was no M&A and they just froze the market, now it’s coming back. IPOs, we did have some freezing of that market for certain periods, but this third way is now fantastic. I can tell you, as the earliest of the early, we are now pari passu selling into every chance we get because our average investment is at $10 to $20 million valuations. When they hit 500 million, I tell the founder, you’re gonna start selling at 500 million, I’m going to sell right alongside you so that I can invest in the next you coming into the market. Everybody’s fine with it. But I can tell you six or seven years ago when I did this with a company, they begged me to not participate when they hit peak ZIRP 2021. They begged me, J-Cal, you have to be loyal to us, you can’t sell pari passu. And I said, you guys are clearing 40 million of the 110 million dollar round. I’m just asking to be next to you. Same amount.

Chamath Palihapitiya: 19:25 Can I ask Kelly a question? How do you systematize this so that it’s like an exchange? So like if we just want to hit the bid, we can do it. Like what I don’t like about the secondary markets is, you know, I ask my CFO, he calls five guys, then my fund CFO, she calls like four…

Brad Gerstner: 19:38 It’s like ticket brokers.

Chamath Palihapitiya: 19:40 Yes. We get a bunch of bids, none of it makes any sense and I’m like, and I’m already dealing with, as Brad said, the agita from the CEO. It’s got to be easier than this.

Kelly Rodriques: 19:51 Yes. Look, 10 years ago we said there needs to be infrastructure to pull this off. This can’t just be a big shadow market. We’re sort of in this tipping point now where we spent the last three years building this brand new platform so that a company could plug into it the same way they could list on an exchange and say, we’re going to offer liquidity. And furthermore, if you’re a VC and you’re on that cap structure for 10 years and you want to offer LP liquidity, you can do it in a way…

Chamath Palihapitiya: 20:21 But to be specific, what do you mean? You’re like we would be plugging into Schwab’s 30 million humans that are buying stuff on Schwab?

Kelly Rodriques: 20:27 Yes, there’s a platform we brought, a platform with about 3 million investors and now we’re going to add 46 million investors to it.

Jason Calacanis: 20:32 Yeah, but wait, hold on a second. Aren’t those accredited investors? Who do they need to be? Because we just had the chair of the SEC on.

Kelly Rodriques: 20:40 So today, if you are trading individual shares, whether it’s in an SPV or direct on a cap table, you’re accredited. However, there are products coming to market, and we can talk about this in detail later, that have 60 companies including SpaceX that are listed products for unaccredited $500 minimums and that capital for those funds will be the underlying…

Jason Calacanis: 21:05 These are closed-end funds?

Kelly Rodriques: 21:07 These are interval funds.

Jason Calacanis: 21:09 Interval funds.

Chamath Palihapitiya: 21:10 Robinhood just put that one out now.

David Sacks: 21:12 I think Naval just did USVC as one of these, he’s going to contribute them.

Kelly Rodriques: 21:16 Now, the closed-end funds are a very different bet because you’re betting on FOMO, because if you look at the underlying value of some of the assets in those closed-end funds, they have no bearing to reality of what those underlying shares are actually worth. So price discovery’s another key component of this structural shift. But to answer your question specifically, if a VC’s LPs want to recycle or want to get liquid, then a platform like this will allow them to recycle that capital and put it back into the next vintage fund if they want.

Jason Calacanis: 21:49 I have a question for you based on this. When these returns come out, the mean return in venture’s going to look incredible. The median return is still going to be shit. So walk us through how people will sort through that and the reality of what’s going to happen in the next year.

Gavin Baker: 22:09 Well, so I think there’s two very important things. One, I observe if you’re a venture firm and you do not have material exposure to one of these trillion-dollar-plus companies that you had many, many chances to buy into, not only are your returns not going to be good, but you’re not going to have DPI on a relative basis. And there’s exceptions, our great Series A firms, they may not have this, but their returns are still amazing with great DPI. But so I am beginning to see venture firms who don’t have exposure to one of these companies behave in strange ways because I think they’re starting to feel a little bit of franchise risk because their DPI and their returns are going to go from top quintile, top tercile…

Jason Calacanis: 23:05 So they’re doing unnatural acts for optics.

Gavin Baker: 23:07 They’re doing unnatural things. They’re writing what I see as call options, like a bunch of these neolabs. Well, I need a story. I’ve done something. And maybe some of these call options pay off, but I do think they’re engaging at some level in maybe…

Jason Calacanis: 23:22 They’re chasing it.

David Friedberg: 23:23 They’re chasing it. In gambling terms.

Gavin Baker: 23:24 They’re chasing it. Whereas the people who have exposure to this, like, are being a lot more disciplined because they know they’re in a great position. I think another very important dynamic is going to happen in the world of long-only mutual funds and crossover funds. So long-only mutual funds, you know, my former employer Fidelity — amazing place, love it — Baillie Gifford, Capital Research, Wellington, T. Rowe, they all can, per SEC rules, allocate up to 15% of their funds into privates. And these are the biggest pools of capital in the world. They dwarf sovereign wealth funds. But you know, most firms because they don’t want to get in trouble with the SEC, they say ‘Hey, we’re going to cap it at 3 percent, or 5 percent, or 7 percent.’ It was very public. Baillie Gifford was forced to sell SpaceX last year for regulatory reasons.

Kelly Rodriques: 24:08 That’s right.

Gavin Baker: 24:14 And what’s going to happen as these companies go public, all of these long-only mutual funds are by and large finding it hard to participate in private markets right now because they’re at the limits of their self-imposed…

Jason Calacanis: 24:33 3, 5 percent.

Gavin Baker: 24:34 3, 5 percent. When a company goes public and the lockup expires, it moves out of that bucket. So this is going to be hundreds of billions of dollars of new late-stage demand that is coming back to the market after kind of being out of the market for a while.

Jason Calacanis: 24:53 That’s a lot of dry powder. The next trade is up then. The marginal trade is up.

Brad Gerstner: 24:57 The founders are going to be in the catbird seat, people are going to be looking to put money to work. Interesting buzz around about accreditation rules. We had the head of the SEC on All-In’s interview show… And they’re going to have a sophisticated investor test, something I’ve been talking about for a long time that would really democratize the way Invest America has access. And then funds, I’ve been getting pitched for years on ‘Oh put your fund on blockchain’ or ‘sell your fund into this ETF.’ Maybe you could talk a little Kelly about the possibilities around venture funds being more tradeable like secondaries are. Is that on your roadmap?

Kelly Rodriques: 25:52 So there’s been secondary fund trading for a long time. I think blockchain and tokenization makes it more efficient, that world will come. But the question we’re asking ourselves now is if you’re an LP in a fund that’s holding something as valuable as this, are you really interested in trading your fund position or do you just want to get out of the big winner, that name? And our view is it’s probably the latter. And in some cases, funds will come to us and say ‘We’ve got a vintage fund that has two companies in it that are 15 years old and we can’t clear that fund.’ And so that’s an application of liquidity to the market that we think is coming to the market.

Jason Calacanis: 26:54 Are you worried at all over this next year about this idea of retail being exit liquidity? For these three ginormous companies, like is there any risk? How do you bucket the risk? How do you manage the risk? What is the risk? If something were to happen, what’s the blowback?

Gavin Baker: 27:09 I was talking with Brad about this yesterday. We’re watching these valuations and these multiples. We had this conversation at dinner last night and saying, wow, these are extraordinary. And people should come into this market and not look…

Jason Calacanis: 27:23 Extraordinary is a coded word for…

Gavin Baker: 27:25 It’s, you know, it’s elevated. Okay, fine.

David Friedberg: 27:28 It’s a bubble, call it what it is.

Jason Calacanis: 27:31 You’re saying you think they’re high, the valuations are high.

Gavin Baker: 27:34 I think the retail investor coming into this space needs to look down market and look at interesting opportunities that aren’t the things that are on CNBC every day and have access to them earlier. And we had a bunch of retail investors show up in 2018 and 2019 that wanted to be in SpaceX. And they’re thrilled that they got in when the valuation was 30 billion. And I think if the market opens up, that’s what we’ll be talking about. What do I want to get into now that’s not at the very, very top of the market getting ready to go public?

Jason Calacanis: 27:54 Also Brad and Gavin, we’re getting better, shout out to Gurley, we’re getting better at pricing these IPOs and not leaving money on the table. They’re fully valued in most cases when they go public.

Brad Gerstner: 28:05 No, they’re still mispriced. They’re massively mispriced.

Jason Calacanis: 28:07 Well no, we have seen some that have gone down, you know, after they go out, so you know.

Brad Gerstner: 28:13 Nothing good that anybody wants.

Jason Calacanis: 28:14 Anyway, what do you guys think? Is it, are we closer to correctly pricing them?

Brad Gerstner: 28:19 The public market, I mean, Gavin and I have been doing this 25 years. There are moments that the public market is undervalued relative to privates and moments where privates are undervalued relative to public. Right now, everything in the tech world is pretty fully valued. You can’t have the parabolic moves we’ve had and think that everything is cheap. That’s not to say that we’re not going to go higher, but when you’ve been punched in the face as many times as all of us have over the last 15 years in technology, we know it’s a jagged line up and to the right. So for the retail investor, so long as they have staying power, so if you’re going to launch a product, as long as the retail investor can stay in that product through the drawdown, they’re going to do fine. The problem is most of them YOLO at the top because everybody gets them all jimmyed up and excited. And so they’re, you know, they’re levering up, they’re doing 2X levered, you know, meme trades and all this shit that Gavin and I are watching. There are 14 ETFs launching on the day of the SpaceX IPO that are levered ETFs into SpaceX at like whatever, 1.75 trillion. So this just tells me that there’s a lot of signal. We may not be at the top, but we ain’t at the bottom.

Jason Calacanis: 29:53 We’re bouncing along the top might be a fairer description, Gavin?

Gavin Baker: 29:56 And so look, you gotta allocate accordingly, and that’s what active management is about. If we do our job right…

Brad Gerstner: 30:00 When people are puking into their garbage cans at the start of the Iran war and the market is down Gavin and I are looking at each other and saying good God these Anthropic revenues are off the charts we gotta get more dollars at risk shove more onto the table in both Anthropic and public markets stocks but then 75 days later it’s all changed right now the market…

Jason Calacanis: 30:25 Have you guys ever been in a market cycle where these moves are just so concentrated in time where you take like a year or two’s worth of moves and you compress it into 30 days 60 days?

David Sacks: 30:38 I mean this is nothing relative to 99 and 2000. Nothing. This is nothing relative to that.

Jason Calacanis: 30:44 Describe it.

Chamath Palihapitiya: 30:45 Yeah describe that sometimes I wake up and I’m like…

Jason Calacanis: 30:48 What was 99 2000 like? In terms of like a if this is a rollercoaster what was that?

David Friedberg: 30:53 Yeah what was that?

Brad Gerstner: 30:54 I mean I don’t this is like a this is a roller coaster that’s like kind of a gentle sine wave.

Chamath Palihapitiya: 31:03 That’s fun.

Brad Gerstner: 31:04 99 was Vegas on a Friday night after way too many drugs okay like it was out of control nuts CMGI had no revenue and the stock went from two dollars to two thousand dollars over the course of you know six months they’d buy Foxboro stadium they’re on the cover of Time Magazine and they’re out of business two years later right like that is very different than Anthropic OpenAI and SpaceX these are extraordinarily real businesses so I think the better compare is like 2021 right where valuations get ahead of themselves or they’re at the top end of the range we could have a normal run-of-the-mill consolidation in the public markets in the semi index of 10 or 20 percent which means high beta would be down 30 to 40 percent and a lot of people who just got in would be panicking right but the people who’ve been in for six months or three years would notice that that’s just a blip so I don’t think it’s at all like 99.

Jason Calacanis: 32:04 Okay I have a question for the three of you yeah final question take the top 10 names private companies off okay forget those you can’t pick those give me a sub you know in the tens of billions few hundred billion private company that you could buy today secondary in that you do not own that you would want to own I’ll start with you Brad just go around the horn. Something you don’t own but if you had the chance to buy secondary you would.

Brad Gerstner: 32:32 I mean I I’d take a company you know in that what I call inflection growth Chamath so these are companies that thousand companies that are over three billion but let’s call it sub 50 billion I think it’s the trickiest area of the investing landscape because they’re the beneficiaries of high valuations yet they still have binary risk right like Anthropic OpenAI SpaceX I don’t think these companies have binary risk but there are a lot in you know in that bucket that do. And so, I mean we own most of the ones I want to own. I can’t give you one that we don’t own. Well what once… if I want to own it I generally own it.

Jason Calacanis: 33:08 That’s our question. How about…

Brad Gerstner: 33:11 No no no, I’d say like… Sierra, Brett Taylor’s company.

Jason Calacanis: 33:15 What do they do?

Brad Gerstner: 33:17 So they’re building basically Salesforce agent native. So sales, marketing, customer service agents that are agent native. I’ll give you the downside and the upside. We also own a company called Parlo in the same space in Europe that I think is really interesting. Downside: OpenAI and Anthropic say ‘we’re going to do this’ and all of a sudden it eviscerates their hundreds of millions of dollars in revenue. The upside on these businesses is that they actually have already built very sophisticated agentic layers and that all these guys Meta, Google, SpaceX come along and say ‘we want to buy you’ because we want to accelerate our path into agent first.

Chamath Palihapitiya: 33:49 I’ll give you the name that I was convinced of today… yesterday… by Thomas Laffont which was Revolut. You know I had always kind of like… I had some early bets in fintech like I own some Coinbase, I own some Robinhood, we did all of that stuff it was fine. Kind of ignored fintech. And Thomas backstage gave me an incredible… we were together… an incredibly compelling pitch for Revolut. And I actually went and I was like okay show me what the Revolut share price is in these secondary markets I got kind of curious maybe I should pick up some. That so that would be mine.

Jason Calacanis: 34:14 What does Revolut do? Explain to the audience.

Chamath Palihapitiya: 34:16 It’s a bank and what’s interesting it’s a Neobank that has a completely next generation stack. Kind of what Brad said is like that theme of you rebuild it in the modern era and you unbundle the incumbent. That has a lot of legs. And in a regulated market that has a ton of legs. And so they’re doing really well in Europe, they’re coming to the United States, the founder seems to be just an absolute star.

Kelly Rodriques: 34:36 Tens of millions of customers, 14 lines of business that are like a billion dollars of revenue.

Chamath Palihapitiya: 34:40 So I got curious about something like that.

Jason Calacanis: 34:42 I have… Gavin do you have one that you’ve bought recently?

Gavin Baker: 34:45 No I would just say, well, you know, two names that we’ve been involved in publicly as leading are Arya and DriveNets and they’re both in the networking space. And basically as data centers get more specialized and complicated you’re going to have increasingly specialized chips, it’s called the disaggregation of inference into prefill and decode, and to make all of these chips work together like a symphony and have kind of the right chip for the right job at the right time I do think we need to reinvent networking and Arya and DriveNets are coming at the problem in a very different way.

Chamath Palihapitiya: 35:22 And if you’re an AI lab… You’ve been one of the earliest I’ll give you credit. I think that you framed this on one of the podcasts that I saw which is there is an impending supercycle in infra networking silicon and you really been at the front end of that. I buy into it completely now too.

Brad Gerstner: 35:35 It’s really good.

Chamath Palihapitiya: 35:36 It’s really good.

Jason Calacanis: 35:37 Kelly, any names?

Kelly Rodriques: 35:38 Neuro Robotics. In Europe.

Jason Calacanis: 35:40 Neuro Robotics is the company name?

Kelly Rodriques: 35:43 Yes.

Jason Calacanis: 35:44 N-E-U-R-O?

Brad Gerstner: 36:00 AI-powered logistics robotics.

Jason Calacanis: 36:04 Love it.

Brad Gerstner: 36:05 They’re not in the main strip of high-value real estate in Silicon Valley, they’re in Germany. Quiet company, big investors, 100 million revenue, kicking ass.

Jason Calacanis: 36:19 Love it. Okay, Chamath…

Chamath Palihapitiya: 36:20 Well, you know, I have a couple of thesis that I’ve been looking at. One is, what is Elon helping put into space as the price goes down? And so we did direct on the cap table, an SPV for Vast, which is building space stations, and we think they’re going to win. The other one is what I’ll just call Uber 2.0, you know, Gurley and I took a lot of notes on that, Brad as well, and so we were able to do Zipline and we put a small ticket size into Zipline as well because if you can take the delivery cost down from $15 to $5 and then eventually $2, that’s going to just drive consumption massively and it’s going to happen in the air and these actual drones had such a false start that everybody gave up on the entire sector and now it works and it was just a very simple innovation that Keller told me which was it’s the drone stays up in the air and drops a tether with the box and your burrito. If you grab the tether and you pull it, it just comes down. You don’t have to land like this giant robot in your backyard with blades spinning to kill your dog.

David Friedberg: 37:24 Well, I think there’s actually a very important, like, on Zipline, it’s an amazing, it has done great things for the world. So, my arbitrary thesis is also involved in Zipline, but Zipline started, so the hard thing is to make anything autonomous work, you need to get it out into the world and gathering real-world data, this is how AI works, and it’s hard to get approval to fly things around autonomously in American airspace. So Keller had the idea of we’re going to go to African countries and we’re going to, you know, if a… we’re going to help or deliver medicines to these small villages and they focused on maternity and they have cut the maternal mortality rate in some of these African countries by 90 to 95 percent. So you’re in a small village, there’s one midwife, there’s an app, a woman goes into labor, they press a button and, you know, an hour later a Zipline drone drops a refrigerated package of modern medicine and blood and everything.

Jason Calacanis: 38:22 That’s incredible.

Brad Gerstner: 38:23 That’s incredible.

Jason Calacanis: 38:24 It is incredible.

David Friedberg: 38:25 He did it for seven years and it’s had a huge impact on health outcomes in these African countries and it’s come to America.

Chamath Palihapitiya: 38:32 I… this is an incredible story and I’ve basically now reconstructed my firm to do the barbell. I missed the seed investment, I turned him down because I was like we don’t invest on that continent, we don’t have any insight into it, we don’t understand it, and hardware’s hard. And he has the email, whatever, and I’ve stayed in touch with him and he said listen, I figured it out and I said hey, you know I have this syndicate, let me see if I can correct that mistake, may I invest? He said I… you’re my dream investor, I’ve wanted you on this whole time…

Jason Calacanis: 39:00 so important…

Chamath Palihapitiya: 39:01 No, he’s, no, we’ve been friends for all this time and I’ve, you know, I’ve had him on the pod three times. And he said, ‘when are you going to be on the cap table?’ And I said, ‘you know what? I…’

Brad Gerstner: 39:10 Learning from you guys specifically, this late stage stuff, I’m like, ‘well I can do that.’ And here we are.

Jason Calacanis: 39:16 On that note… Let’s wrap up. Well done guys, thank you so much. Gavin thank you, Kelly thank you, Brad thank you.