Venture Fund Secondary: Buy the Winning Ticket at Halftime
Venture capital isn’t for everyone. Most startups fail, and most investments return zero. Many VC funds don’t make any distributions in the first 5 years, and most of them take 10-15 years or longer to fully exit. The lack of predictability and a long period of illiquidity makes venture capital a challenging asset class for all but the most patient of investors.
That said, top VC funds can perform far better than the rest of the market, and the best tech companies can turn into unicorns that generate 20x, 50x, or sometimes even 100x returns.
If only there was a way to skip ahead five or more years and invest in just the VC funds that are doing well, wouldn’t that be great?
What if you could arrive at the game at halftime and bet on the team that was already ahead by 10 points? And what if you could buy that winning ticket at a discount?
It’s possible. Enter Practical Venture Capital…
Practical Venture Capital (PVC) is a Silicon Valley VC firm that buys secondary interests in mature, top-performing early-stage VC funds and companies. The co-founders and managing partners are Dave McClure and Aman Verjee, experienced investors and internet startup veterans who have worked at PayPal, eBay, Sonos, Founders Fund and 500 Startups. They have been early investors in 30+ unicorns and 8 IPOs that have generated 50-100x+ returns including Credit Karma, Twilio, SendGrid, Lyft, TalkDesk, Canva, among others.
Venture Capital Secondary combines the rapid growth of tech companies with faster liquidity. PVC acquires secondary interests in top-performing VC funds and portfolio companies from LPs and GPs who want early liquidity, typically purchasing these assets at a 20-40% discount to NAV. From launching 20 VC funds globally and being an LP in a number of other funds, the PVC partners have one of the broadest GP networks in Silicon Valley and around the world.
Investors get discounted access to top venture portfolios that already have $1B+ winners. They are diversified across 15+ early-stage VC funds with 30-40 Series B/C/D winners that may IPO within 3 years or less.
- “Skip the J-Curve:” Buy secondary in mature, winning VC funds and pre-IPO unicorns
- Many LPs and GPs want (some) liquidity after 5-10 years
- Secondary from these LPs/GPs can be bought at substantial discounts to NAV (20-40%)
- Portfolios growing @ 30-50% per year
- Projected returns: 1x back in 3 yrs, 3x+ in 7 yrs
- Sectors: Enterprise SaaS, eCommerce, Fintech, others; Geo: 70% US, 30% RoW
Event Recording
Venture Fund Secondary: Buy the Winning Ticket at Halftime
- PVC Venture Fund Secondary StrategyPVC Venture Fund Secondary Strategy.png111 kB
Speakers
Dave McClure
- Title
- Founder @
- Company
- Practical Venture Capital
- Role
- Moderator
Dave McClure has been a Silicon Valley entrepreneur and investor for over 25 years. He has invested in hundreds of startups all over the world and has twice been named to Forbes’ Midas List of the top 100 VCs in the world (2016 and 2017).
Prior to founding Practical Venture Capital in 2019, he was the founding GP of 500 Startups, a global VC firm with $1B AUM that has invested in over 2,500 companies and 5,000 founders across 75 countries. Investments include 30+ unicorns and 8 IPOs: Credit Karma (acq INTU $7B), Twilio (IPO 2016), SendGrid (IPO 2017), The RealReal (IPO 2019), Life360 (IPO 2019), Grab, Intercom, Ipsy, Canva, Udemy, Lucid, Flywire, FabFitFun, Talkdesk, GitLab, Algolia, PlanGrid (acq ADSK $875M), Vungle (acq Blackstone $750M). Dave created 20 VC funds under the 500 brand and invested in 20 other VC funds around the world.
Dave began his venture career as a fund manager at Founders Fund where he made seed-stage investments in 40 companies, resulting in 4 unicorns / 3 IPOs (TWLO, SEND, LYFT, Credit Karma) and 2 other 9-figure exits (Wildfire, Life360). Notably, he led the Credit Karma seed round in 2009 (acq INTU, >400X return). His $3M portfolio returned >$200M (~70X) in under 10 years.
Earlier in his career, Dave joined PayPal in 2001 as Director of Marketing. He was the founder/CEO of Aslan Computing, which was acquired by Servinet in 1998. He has a BS in Engineering and Applied Mathematics from the Johns Hopkins University.
Aman Verjee
- Title
- Founder / General Partner @
- Company
- Practical Venture Capital
- Role
- Panelist
Aman Verjee has more than 15 years of financial and operational experience from both private and public technology companies. He has been a member of the management teams at some of the most successful and beloved companies in the world, including PayPal, eBay and Sonos.
Prior to becoming a general partner at Practical Venture Capital, Aman was the Chief Operating Officer of 500 Startups, which during his tenure was the world’s most active venture capital firm, measured by the number of investments made. In that role, Aman managed the global fundraising team, the seed accelerator team, and the Series A growth programs. He also managed the Investment Committee for the firm’s global funds, which collectively had over $450 million in AUM.
Prior to Sonos, Aman spent eight years at eBay, Inc., mostly at PayPal, which was acquired by eBay in 2002. Aman was the Chief Financial Officer of eBay’s North America business, which generated over $2 billion in revenues and nearly $1 billion in operating profit. Aman also led finance and strategy for PayPal.
Aman has additional experience as Financial Analyst at Lehman Brothers and Associate at McKinsey. He graduated with a degree in economics from Stanford University and has a law degree from Harvard University.
About
Practical Venture Capital
Practical Venture Capital (PVC) is a Silicon Valley VC firm that buys secondary interests in mature, top-performing early-stage VC funds and companies. The co-founders and managing partners are Dave McClure and Aman Verjee, experienced investors and internet startup veterans who have worked at PayPal, eBay, Sonos, Founders Fund and 500 Startups. They have been early investors in 30+ unicorns and 8 IPOs that have generated 50-100x+ returns including Credit Karma, Twilio, SendGrid, Lyft, TalkDesk, Canva, among others.