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

The panel opens with Brad Gersonner presenting data showing that secondary markets have reached record volumes, doubling the 2021 peak, with secondaries now trading at a 106% premium to market value (up from an 80-cent discount in prior years). He frames these later-stage private companies as 'quasi-public companies' where buying and selling occurs daily, and notes that employee secondaries now represent 31% of all primary venture activity in 2025.

The conversation then turns to why companies stay private longer. Gavin Baker and others broadly agree there is no genuinely good reason — it largely comes down to founders avoiding public scrutiny. Baker uses Facebook's HTML5 debacle as a case study, arguing that public market pressure forces better decision-making by exposing management teams to rigorous, honest feedback, whereas private investors often tell founders what they want to hear to maintain deal access. Brad Gersonner corroborates this 'sycophantic nature of private markets.'

Kelly Rodriguez, Forge CEO, discusses how Forge is building infrastructure to systematize secondary trading, likening it to an exchange where companies can 'plug in' and offer liquidity. He describes Forge's partnership with Schwab — giving access to 46 million retail investors — and how this creates a pipeline from private liquidity programs all the way to IPO distribution. SpaceX is cited as a model, having run orderly liquidity programs for nearly a decade.

The panel raises concerns about retail investors being 'exit liquidity' for overvalued late-stage privates. Gersonner explicitly warns against YOLOing into names trading at peak valuations, noting that levered ETFs are already being planned for the SpaceX IPO. He advocates for a measured, staged approach to capital deployment and worries about retail investors who rush in at the top and then panic during drawdowns.

The discussion also covers the democratization angle, including interval funds with $500 minimums covering 60 companies including SpaceX, the SEC's potential move toward a 'sophisticated investor' test, and the possibility of tokenized fund trading. Long-only mutual funds that have capped private allocations at 3-7% are highlighted as a massive source of future demand once companies go public and exit the private bucket.

The panel closes with each member naming a private company they'd want to buy in secondary markets: Gersonner picks Sierra (Brett Taylor's agentic Salesforce replacement); Baker picks Arya and Drivenets (AI networking infrastructure); Chimath picks Revolut (neobank expanding to the US); and Jason Calacanis picks Vast (space stations) and Zipline (drone delivery), sharing an elaborate story about Zipline's origins delivering medical supplies to African villages.