Taro Finance (Techstars '23) reposted this
Serial entrepreneur, investor, economic development author, and community wealth advocate. Helping 1,000 people FIRE themselves.
This is my favorite chart for two reasons: 1) The appropriate use of the word "Shenanigans" bc VC is full of them 2) It illustrates one of the soap boxes I've been standing on for about 1.5 years now (although I've had the thesis since about 2019)...the MATH says that early investors (pre-seed/seed) should not be waiting for traditional exits to get liquidity from their positions. Early stage investing without secondaries as the primary exit strategy is inefficient, especially if a recycling clause isn't in the LPA (if you're raising a fund without a recycling strategy, stop). This is not my opinion, I've run the numbers on my own portfolio. Thanks to companies like Taro Finance (Techstars '23), managing secondaries is much more feasible than it was even a few years ago. And there's a way to do it without pissing off founders (i.e. Carta) AND while making later stage investors happy. There are of course exceptions, like large multi-stage funds that can lead every round from seed to exit. And the main reason to do that would be to get majority control (more of a hybrid VC/PE play). source: https://lnkd.in/gtVyfqc4