Audio · 2026-06-07 · 40m · 12 moments

Inside the Private Stock Market Boom: SpaceX, Anthropic, OpenAI & the Rise of Secondaries

(0:00) Brad Gerstner, Gavin Baker, and Kelly Rodriques join the Besties! (0:47) Secondary Markets are Booming & Competing with IPOs (3:10) Why Companies are Staying Private So Long? (9:22) SPVs, the Forge-Schwab Deal, Democratizing Private Market Access (13:28) Secondary Markets as Exit Liquidity for VCs (27:00) The Private Market Bubble? (32:03) Hottest Secondary Companies Right Now Thanks to our partners for making this possible! EY - Agentic AI is introducing a new investment ✦ AI generated

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GUEST Brad Gerstner GUEST Gavin Baker GUEST Kelly Rodriques

timeline · colored by role

Claim◆

Secondary markets are now competing with IPOs and acquisitions as the principal way that investors exit these companies.

Brad Gerstner presents data showing secondary market transactions have reached record volume, exceeding the 2021 peak, and now represent 31% of all primary venture activity as of 2025, positioning secondaries alongside IPOs and M&A as a primary exit route.

transcript

Brad Gerstner: Secondaries are now competing with IPOs and acquisitions as the principal way that these guys are exiting. So I thought that was a decent setup to start the conversation this morning, just to level set how important secondaries have become.

provides context · 2

Data◆

The secondary market for private company shares has reached record volume, double the 2021 peak, and now represents 31% of all primary venture activity.

Brad Gerstner presents data showing secondary transactions have doubled since the 2021 peak, with employee secondaries now accounting for 31% of all primary venture activity in 2025, establishing secondaries as a dominant exit mechanism.

transcript

Brad Gerstner: But the secondary market is at record volume. So this is, you know, I call these companies quasi-public companies. These are these later stage companies. There's buying and selling that's going on every day. Look at that, Jason, relative to the 21 peak. We thought that was crazy. At the end of 21, we're double that now in terms of secondary transactions. This is the amount of employee secondaries. So this is people buying into Andoril, Anthropic, SpaceX, now represents 31% of all primary venture activity is buying into these secondaries in 2025.

Mechanism◆

Companies are staying private longer primarily because founders don't want to be under the public-market microscope, and private investors often tell management what they want to hear to maintain access to future rounds, depriving CEOs of the honest feedback that public-market scrutiny provides.

Gavin Baker and Brad Gerstner argue that the sycophantic nature of private markets deprives CEOs of clean information, illustrated by Mark Zuckerberg's belief that public-market pressure-testing would have prevented Facebook's costly HTML5 detour.

transcript

Gavin Baker: This is founders don't want, let's just call it what it is. Founders don't want to be under a microscope. They want to build and enjoy life and have it easier than being on the public market microscope. Yeah, I think there is a perception that life as a private company is easier and you have more freedom and you can think long term. I don't agree with this. I always think about Mark Zuckerberg's commentary that had he been public... And what Mark Zuckerberg has said, I think several times in public, is he profoundly believes that had he been a public company, when there was this internal debate between Shamath and Brett... the consequence of this is, that private investors are often selling to management teams. And at some level, that can mean telling management teams what they need to hear, because you want to be able to keep participating in the rounds. Once a company's public, you can buy or sell as you wish. And this means that investors feel freer to give companies management teams. And Zuckerberg said, had I been public, had I been getting rigorous, detailed questions from really smart public equity investors, I think I would have made that... You do not get clean information as the CEO and the management team because people want access. And once you give the truth or you ask the hard questions, you might lose access. 100%. The sycophantic nature of private markets is real.

supports · 1

Claim◆

The sycophantic nature of private markets is real — private investors are often selling to management teams and telling them what they need to hear because they want to keep participating in rounds, whereas public market investors give more rigorous, honest feedback.

Gavin Baker argues that private market investors are sycophantic because they need continued access to deals, leading them to tell CEOs what they want to hear instead of giving hard truths. Public market investors, by contrast, can freely buy or sell, so they provide more rigorous, honest feedback. He cites Mark Zuckerberg's belief that going public earlier would have forced Facebook to confront the apps-vs-HTML5 debate sooner.

transcript

Gavin Baker: The sycophantic nature of private markets is real. Now an exceptional CEO. Elon. seeks it out, negative feedback. He's looking for that. But not many, and actively discards, but not many CEOs maybe are aware that way.

Claim

The Forge-Schwab deal signals that private-company equity is becoming a real asset class, with Schwab's 46 million investors and $12 trillion in assets representing a path to democratized access through regulated fund products and SPV structures.

Kelly Rodriques describes how the Schwab-Forge partnership will put private company equity into interval funds and regulated SPV structures, with the pitch to founders being that Schwab represents 46 million investors who could participate at IPO pricing.

transcript

Kelly Rodriques: Schwab deal with Forge basically says to the world, this is a real asset class. It's more than just secondaries. We're going to put these companies, the company's equity into fund products, into very well-managed, regulated SPV structures because they do serve a purpose in the market... The pitch is you're gonna go from being a private company eventually to a public company. What Schwab represents is 46 million investors and $12 trillion. This will change capital access and the way that you distribute your shares moving from private to public.

provides context · 2

Fact

The Schwab-Forge deal signals that private company equity is a real asset class, and the pitch to CEOs is that Schwab's 46 million investors and $12 trillion represent a new channel for capital access and distribution from private to public.

Kelly Rodriques explains that the Schwab acquisition of Forge legitimizes private company equity as an asset class. The pitch to companies like SpaceX is that Schwab provides access to 46 million investors and $12 trillion, enabling broad-based distribution at the IPO price — a model SpaceX embraced, allowing Schwab to offer allocations to retail investors.

transcript

Mechanism

Venture capitalists are increasingly selling into secondary markets to generate DPI for LPs, representing a structural shift where VCs must think about the sell decision — not just the buy — especially for trillion-dollar private companies like Databricks.

Brad Gerstner explains that his LPs are asking him to sell slices of positions at 4-5x returns to generate DPI, and that the private-market sell decision is more complicated than public markets because it requires direct founder conversations that create friction.

transcript

Brad Gerstner: We are selling into this. You're selling into this. Right? So I have LPs in this room who say, listen, we invested in your VC5 or VC6 seven or eight years ago. If you can go sell a slice of that at 4 or 5X and we get DPI and it's priced really high, then go sell some of it. And we often don't talk about this in Ventureland. Half of what we do is in the public markets. Gavin and I get up every morning and we think to ourselves, should we buy today or should we sell today? Venture capitalists don't think about the sell part. They think about the buy part. So if we're going to stay private for longer and we're going to have trillion dollar private companies and Databricks at $200 billion. You've got to think about is today a day we should be selling some and returning it to our investors.

provides context · 2supports · 1

Mechanism

Venture firms without material exposure to one of the trillion-dollar-plus private companies are facing franchise risk and engaging in undisciplined behavior — writing call-option bets on neo-labs — while firms with exposure to these winners are being more disciplined.

Gavin Baker observes that venture firms lacking exposure to trillion-dollar companies like SpaceX or Anthropic are behaving strangely — writing speculative bets to manufacture a story — while firms with winner exposure stay disciplined. He also notes that long-only mutual funds face regulatory caps on private allocations that will unleash hundreds of billions in demand when these companies go public.

transcript

Gavin Baker: I observe if you were a venture firm and you do not have material exposure to one of these trillion dollar plus companies, that you had many, many chances, to buy into, not only are your returns not going to be good, but you're not going to have DPI on a relative basis, but you're not going to have DPI... I am beginning to see venture firms who don't have exposure to one of these companies behave in strange ways. because I think they're starting to feel a little bit of franchise risk because their DPI and their returns are going to go from, hey, top quintile, top tertile. So they're doing unnatural acts. They're doing unnatural things. They're writing what I see as call options, like a bunch of these, you know, neo labs. Well, I need a story. I've done something and maybe some of these call options pay off, but I do think they're engaging at some level and maybe they're chasing it in gambling terms. Whereas the people who have exposure to this are being a lot more disciplined because they know they're in a great position.

provides context · 1

Mechanism

Venture capitalists are now selling into secondaries as a way to generate DPI for LPs, but this creates complicated personality dynamics because private market founders react negatively to selling, unlike public markets where selling is anonymous.

Brad Gerstner explains that VCs are now actively selling secondary positions to return capital to LPs, but this requires a difficult conversation with the founder who always dislikes it. In public markets, selling is anonymous until the 13F filing, whereas in private markets every sale is a personal negotiation with the CEO who may resent it.

transcript

Brad Gerstner: We are selling into this. So I have LPs in this room who say, listen, we invested in your VC5 or VC6 seven or eight years ago. If you can go sell a slice of that at 4 or 5X and we get DPI and it's priced really high, then go sell some of it. And we often don't talk about this in Ventureland. Half of what we do is in the public markets. Gavin and I get up every morning and we think to ourselves, should we buy today or should we sell today? Venture capitalists don't think about the sell part. They think about the buy part.

explains mechanism · 1extends · 1

Context

Today's private-market valuations are elevated but the comparison to 1999-2000 is wrong: companies like Anthropic, OpenAI, and SpaceX are extraordinarily real businesses with massive revenue, unlike the zero-revenue companies of the dot-com bubble. The better comparison is 2021, where valuations get ahead of themselves but the underlying businesses are genuine.

Brd Gerstner draws a sharp distinction between today's AI-era private companies — which have real revenues and businesses — and the dot-com era's zero-revenue companies, arguing the better analog is 2021 where valuations may be at the top of the range but the businesses themselves are real.

transcript

Brad Gerstner: This is nothing relative to 99 and 2000. Nothing. This is nothing relative to that... 99 was Vegas on a Friday night after way too many drugs. Okay. Like it was out of control nuts. CMGI had no revenue and the stock went from $2 to $2,00 over the course of, you know, six months. They buy Foxborough Stadium. They're on the cover of Time Magazine and they're out of business two years later. Right? Like that is very different than Anthropic, OpenAI, and SpaceX. They're extraordinarily real businesses. So I think the better compare is like 2021, right? Where valuations get ahead of themselves or they're at the top end of the range.

provides context · 1

Prediction

Venture firms without exposure to trillion-dollar-plus private companies are beginning to feel franchise risk and engaging in unnatural acts, writing what look like call options on neo-labs, while firms with exposure are more disciplined.

Gavin Baker observes that the mean venture return will look incredible due to mega-cap private companies, but the median return will still be poor. Firms without exposure to these trillion-dollar companies are starting to behave strangely — writing call options and chasing stories — while firms that already have exposure are disciplined because they know their position is strong.

transcript

Gavin Baker: I think there's two very important things. One, I observe if you were a venture firm and you do not have material exposure to one of these trillion dollar plus companies, that you had many, many chances, to buy into, not only are your returns not going to be good, but you're not going to have DPI on a relative basis, but you're not going to have DPI. And you know, there's exceptions, you know, great series A firms, they may not have this, but their returns are still amazing with great DPI. But in so I am beginning to see venture firms who don't have exposure to one of these companies behave in strange ways.

extends · 1

Context

This market cycle is nothing like 1999-2000 — 1999 was 'Vegas on a Friday night after way too many drugs' with companies like CMGI having no revenue going from $2 to $2,000 — whereas Anthropic, OpenAI, and SpaceX are extraordinarily real businesses.

Gavin Baker strongly dismisses comparisons to the 1999-2000 bubble, describing that era as completely unhinged with companies like CMGI (no revenue, stock from $2 to $2,000, buying stadiums, on the cover of Time, bankrupt in two years). He argues Anthropic, OpenAI, and SpaceX are real businesses, and the better comparison is 2021 where valuations merely got ahead of themselves. A normal 10-20% market consolidation would spook late entrants but be a blip for long-term holders.

transcript

Gavin Baker: This is nothing relative to 99 and 2000. Nothing. This is nothing relative to that. I mean, this is like a roller coaster that's like kind of a gentle sine wave. 99 was Vegas on a Friday night after way too many drugs. Like it was out of control nuts. CMGI had no revenue and the stock went from $2 to $2,000 over the course of, you know, six months. They buy Foxborough Stadium. They're on the cover of Time Magazine and they're out of business two years later. Right? Like that is very different than Anthropic, OpenAI, and SpaceX. They're extraordinarily real businesses.

supports · 1

Highlight slides

Secondaries Join IPOs & M&A as a Primary Exit Route✦ from: Secondary markets are now competing with IPOs and acquisitions as the principal way that investors exit these companies.Secondaries Now 31% of All Primary Venture Activity✦ from: Secondary markets are now competing with IPOs and acquisitions as the principal way that investors exit these companies.Secondary market at record volume✦ from: The secondary market for private company shares has reached record volume, double the 2021 peak, and now represents 31% of all primary venture activity.Secondaries as a share of venture activity✦ from: The secondary market for private company shares has reached record volume, double the 2021 peak, and now represents 31% of all primary venture activity.Private Markets Are Sycophantic, Not Honest✦ from: Companies are staying private longer primarily because founders don't want to be under the public-market microscope, and private investors often tell management what they want to hear to maintain access to future rounds, depriving CEOs of the honest feedback that public-market scrutiny provides.Zuckerberg: Public Scrutiny Would Have Prevented a Major Error✦ from: Companies are staying private longer primarily because founders don't want to be under the public-market microscope, and private investors often tell management what they want to hear to maintain access to future rounds, depriving CEOs of the honest feedback that public-market scrutiny provides.Private Markets Are Sycophantic by Design✦ from: The sycophantic nature of private markets is real — private investors are often selling to management teams and telling them what they need to hear because they want to keep participating in rounds, whereas public market investors give more rigorous, honest feedback.Public Markets Demand Rigor✦ from: The sycophantic nature of private markets is real — private investors are often selling to management teams and telling them what they need to hear because they want to keep participating in rounds, whereas public market investors give more rigorous, honest feedback.The Exception: Elon Seeks Out Negative Feedback✦ from: The sycophantic nature of private markets is real — private investors are often selling to management teams and telling them what they need to hear because they want to keep participating in rounds, whereas public market investors give more rigorous, honest feedback.

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