Episode summary
Why Venture Secondaries are Changing the Venture Landscape
How I Invest With David Weisburd
· · 33 min · Hosts: David Weisburd · Guests: Jamie Melzer
Summary
Jamie Melzer argues that venture secondaries became unusually attractive in 2022 and 2023 because interest rates jumped from near zero to 5 plus% while private-market valuations lagged the public-market reset. She says that created a rare chance to buy high-quality private tech companies at 40 to 80% discounts, often before those businesses needed to raise new capital.
She explains that Altra Venture Partners is built around late-stage venture and secondary transactions rather than traditional early-stage investing. The firm is intentionally concentrated, targeting a small number of power-law winners, and uses a flexible mix of direct secondaries, primary rounds, co-investments, and even equity swaps with company executives. Melzer emphasizes that in this market transaction risk can matter more than company risk, because the challenge is not just judging the business but getting the deal approved and closed.
Melzer also argues that private-market access is becoming more important because the best technology companies are staying private longer and capturing more of their value creation behind closed doors. She expects more institutional participation, more continuation-vehicle-like structures over time, and a continued blurring between private equity, public markets, and late-stage venture. For investors, her main message is that late-stage private tech increasingly looks like public growth investing, only with less liquidity and far less access.
Key takeaways
- Jamie Melzer says 2022 to 2023 created a rare entry point in venture secondaries because rates reset fast but private valuations lagged.
- She says Altra Venture Partners buys concentrated exposure to the best private tech companies, with about 80% of the portfolio in the top 10 positions.
- Melzer argues transaction risk is often bigger than company risk in secondaries because approvals, sellers, and structure can determine whether a deal closes.
- She says late-stage private companies now resemble public growth stocks in size and risk profile, but most investors still cannot access them.
- Melzer expects continuation-vehicle-style structures to spread as large private companies stay private longer and LPs demand more liquidity.
Notable quotes
“I think it's just a very different piece of the market and there's a lot of big players and private equity like players that are doing that”
“I think there's actually far more transition risk in this piece of the market than there is company risk”
“we are intentionally very concentrated% of our portfolio is in our top 10 positions and we have maybe 25 investments in total”
How the episode opens
So you built Ultra on the heels of the private markets in the ili liquid in 2022. Tell me about how you built your firm.
Ultra venture partners invest in the next generation of category defining uh technology companies in the private markets and we largely do so by providing liquidity to early stakeholders through something called secondary transactions. What preceded the opportunity in 2022 was 13 years of close to zero interest rates followed by interest rates rising from near zero to 5 plus% very quickly in starting March of 2022. Uh and while 5% is still low from like a historical standpoint relative to what was priced in across asset classes at the time, this was hugely disruptive.
And so you saw public equities start to correct very quickly, especially the high growth public tech stocks that had been pricing in, you know, close to 0% discount rates and and crazy valuations. Because of that, the NASDAQ was down like 33% that year at the low. The S&P was down 25%.
Credit markets, which are directly linked to interest rates, adjusted very quickly. latestage venture where we sit is a very illquid illquid um and inefficient asset class and really needs a prolonged period of fear and pain for valuations to capitulate. And so for most of 2022, valuations were still very high.
Um there weren't really new rounds getting done. Most of the companies had raised and did not need to raise new capital. We actually didn't see the bottom in venture until mid 2022 when it was off about 50% from the 2021 highs.
Um but over the period of 2022 um I was kind of looking at this market and saw a really interesting opportunity emerging where you had some of the best private tech companies in the world still in the private markets.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venture secondaries
- late-stage venture
- liquidity and valuation resets
- transaction risk
- private market information asymmetry
Companies and tickers mentioned
- Altra Venture Partners
Watch the episode
Watch “Why Venture Secondaries are Changing the Venture Landscape” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
