ElevenLabs raised a $100M round entirely for employee secondaries. The CEO's rationale is that by allowing early team members to de-risk and realize financial gains, it solidifies their commitment to the company's multi-year mission rather than creating pressure for a quick exit.

Contrary to the VC fear that early liquidity demotivates founders, Amanda Kahlow argues it does the opposite. Taking money off the table provides comfort and security, allowing founders to put more energy into the company and take bigger risks for a larger outcome.

The traditional IPO exit is being replaced by a perpetual secondary market for elite private companies. This new paradigm provides liquidity for investors and employees without the high costs and regulatory burdens of going public. This shift fundamentally alters the venture capital lifecycle, enabling longer private holding periods.

Instead of relying on venture-led secondary sales, Column uses 25% of its annual earnings to conduct its own tender offers. This provides regular liquidity to employees, enhances retention, and aligns the team long-term without the dilution from new funding rounds.

iCapital's CEO argues against rushing to an IPO, citing the distraction of stock volatility. To retain employees who hold equity, the private company provides periodic opportunities for them to sell a limited portion of their holdings. This balances the need for liquidity with the benefits of staying private.

Top companies like Stripe or SpaceX can stay private forever by using robust secondary markets to provide liquidity to employees and investors. This allows them to focus on long-term growth without the burdens of public company reporting and quarterly profit pressures.

Vested works directly with employees because startups find small, one-off secondary transactions burdensome due to legal fees and cap table complexity. However, this dynamic inverts at scale. Once Vested facilitates millions in transactions for a single company's stock, the startup has a strong incentive to partner on a formal liquidity program.

In an era of extended private markets, secondaries are a critical talent retention strategy. Offering recurring liquidity programs for employees prevents top performers, who are often fully vested and over-concentrated in one stock, from leaving to diversify their wealth by joining other companies.

The number of founders taking secondary liquidity after their seed round is twice as high as the 2021 peak. While this de-risks the journey for founders, there is almost no parallel liquidity offered to early employees, creating a growing divide in early-stage risk and reward.