Firm Perspective · Multi-Sector · Equity · 2020 & 2025–2026

Bought Before the Public Could: How We Access and Underwrite Late-Stage Private Secondaries

The best private companies now create most of their value before they ever reach the public market. Owning that compounding means getting in through the side door — buying from insiders who want liquidity, the secondary market — and underwriting each name as a power law: capped at one times your money on the downside, uncapped on the up. Three positions we sourced show what that access produces.

In 2020 we sourced a secondary position in a private company most investors could not touch: SpaceX, then worth roughly $46 billion. In June 2026 it went public on the Nasdaq at a $1.77 trillion valuation and now trades near $2.1 trillion — a ~46x move, almost all of it earned before the public market ever got a share. We owned it on the way up. The public got in at the end.

That is the whole case for late-stage secondaries in a single position. The best private companies now compound for a decade or more behind a velvet rope, and by the time they ring the opening bell, the largest multiple is already behind them. To own that compounding, you have to get inside the rope early — and the front door, a primary round, is closed to all but the funds the company chooses.

The side door is the secondary market. It is how we owned SpaceX before the public could.

The Value Migrated Behind the Velvet Rope

For most of modern market history, a growth company's best years happened in public. You bought Amazon or Microsoft near its IPO and rode the compounding on a public exchange. That bargain has quietly broken.

Companies now stay private roughly twice as long as they did two decades ago, and the value created in that private window is enormous. SpaceX's climb from $46 billion to its $1.77 trillion June 2026 IPO happened almost entirely in private hands — the public market was handed a nearly-forty-bagger that had already been made. Stripe, Databricks, OpenAI — the defining franchises of this cycle have compounded through eleven-, twelve-, thirteen-figure valuations without ever printing a public ticker. By the time these businesses reach the public market — if they do — the 10x is often behind them.

For an allocator, that is a structural problem. The growth has not disappeared; it has moved behind a velvet rope. The public market increasingly offers you the mature company, not the compounding one. To own the compounding, you have to get inside the private window — and the front door, a primary round, is open only to the handful of funds the company chooses to let in.

The side door is the secondary market. And it is wide open.

Why the Secondary Market Exists — and Why It's the Access

A company that stays private for thirteen years creates a problem it did not used to have: its earliest employees and investors are locked into an illiquid asset for a decade or more. They have mortgages, tax bills, diversification needs, fund lives that end. They want some liquidity long before the company is ready to IPO.

That need is the opening. In the secondary market, existing shareholders sell their stakes to new investors — often at a discount to the last primary round, because the seller is paying for liquidity and the buyer is providing it. You are not competing for an allocation the company controls. You are buying from a willing seller, frequently at or below a mark the company's own primary investors just validated.

This is how a disciplined outsider gets inside the velvet rope: not by being invited to the round, but by buying the shares of someone who was, at a price set by their need for cash rather than the company's need for capital. The best late-stage names — the ones that never need to IPO early precisely because private capital keeps funding them — are reachable only this way.

The Power-Law Book

Here is the concept that governs everything: in venture and late-stage private investing, returns are not distributed on a bell curve. They follow a power law — a small number of names return a large multiple, most return around their cost or less, and the single best position often returns more than the entire rest of the book combined.

We call the resulting construction the Power-Law Book: a portfolio underwritten so that the distribution is the product, not the average. You do not build it to maximize how often you are right. You build it so that when you are right, the position is uncapped — and when you are wrong, the loss is capped at the one time your money you put in. A single SpaceX, sourced at a $46 billion mark, can return a diversified book several times over on its own — which is exactly what an uncapped winner is supposed to do.

The baseball version is cleaner: in this game you are paid on slugging percentage, not batting average. Nobody remembers that Babe Ruth led the league in strikeouts. They remember the home runs — because a home run and a strikeout cost the same at-bat, and only one of them is uncapped.

What Our Access and Underwriting Add

Sourcing a power-law book is not the same as buying a lottery book. Three things separate them, and they are the work.

Access to the names that matter. The secondary market is opaque, relationship-driven, and adversely selected — plenty of sellers are selling because they know something. Getting offered quality — a SpaceX, a Shield AI — at a fair mark requires being a known, reliable counterparty to the brokers, employees, and early funds who hold the paper. That network is the moat, and it is why the same desks see the good blocks repeatedly.

Underwriting each name as if it were the only one. A power law does not excuse sloppiness on any single position; it rewards concentration in the ones that clear a high bar. Each name gets underwritten on its own merits — the technology, the customer base, the path to liquidity, the price against the last round — as if it had to carry the book alone. The distribution is the strategy; the diligence is per-name.

Structuring for the capped downside. Entry price is the risk control. Buying at or below a validated primary mark, in the right part of the capital structure, with a defined liquidity path — IPO, tender offer, or acquisition — is what turns "capped at 1x" from a slogan into a structure. You cannot lose more than once on any name only if you actually paid a price that survives being wrong.

Three Positions, Three Stages of the Same Strategy

The clearest way to show what the access produces is to walk three positions we sourced across two vintages — a winner already realized, one about to be, and one still compounding.

SpaceX — the grand slam, now realized. Sourced in 2020 near a $46 billion valuation. It came public on the Nasdaq in June 2026 at a $1.77 trillion IPO valuation and now trades near $2.1 trillion — a ~46x move from our vintage, almost all of it earned while private. One name, one entry, now a liquid public position. This is what an uncapped winner looks like when it lands.
Toss (Viva Republica) — the liquidity event arriving. The Korean fintech super-app we entered in 2020 has grown into a business with 24 million+ users and its first quarterly profit. Its last private round marked it at $7.4 billion — roughly 3x the valuation at which the 2020 vintage was struck — and it has since filed toward a 2026 US IPO. A private mark compounding toward public liquidity is exactly the exit the book is built to harvest.
Shield AI — the live position. Our current-vintage name, sourced across 2025–2026. The defense-autonomy company was marked at $5.3 billion in March 2025 and, one year later, at $12.7 billion — a 140% step-up in twelve months, driven by a US Air Force autonomous-aircraft selection and a Series G co-led by Advent and JPMorgan with a $500 million Blackstone tranche. The upside here is still in front of it.

One realized, one arriving, one live — sourced through the same side door and underwritten the same way. These three show what the access produces when a name works. Not every late-stage name compounds like this, which is the entire reason the construction — how each position is sized and priced to survive being wrong — matters as much as the sourcing.

What Protects the Downside

We underwrite this asset class for exactly what it is — a power law — which means the risk discipline is built around surviving the losers, not pretending they won't come.

The loss on any name is capped at 1x; the gain is not. This is the structural asymmetry the whole strategy rests on. You put in a fixed amount and can lose only that; the upside has no ceiling — SpaceX has moved roughly forty-six times. No amount of being wrong on the names that don't work can offset being right on one uncapped winner — provided no single position is sized to sink the book.
Position sizing assumes each name can go to zero. Every position is sized so that a total loss is survivable, because in a power law some fraction of any honest book will not work. The book is diversified across sectors and vintages — space, fintech, defense; a 2020 cohort and a 2025–2026 cohort — so no single theme or year decides the outcome.
Entry price is the risk control. Buying at or below a validated last-round mark, from sellers motivated by liquidity, is the difference between a secondary and a gamble. You are underwriting a known company at a known mark, not a blind primary bet.
Liquidity is underwritten, not assumed. Each name is entered with a credible path to cash — an IPO now completed (SpaceX, public since June 2026), one filed and pending (Toss), continued primary funding that resets the mark (Shield AI), or acquisition. The illiquidity is real and long-dated; we size and price for it rather than wish it away.

The honest risks are equally specific. These positions are illiquid and can stay that way for years; marks can be stale between rounds; secondary sellers are sometimes informed sellers, which is why access to quality flow matters more than access to flow; and the power law cuts both ways — a book without a genuine grand slam is just a collection of illiquid bets. We do not promise a SpaceX in every vintage. We build so that when one appears, we own enough of it to matter, and every other name is sized to be survivable if it doesn't.

We owned SpaceX before the public could, and we still hold the two names the public can't yet. That is the strategy: get inside the rope early, underwrite each position to stand on its own, and let the uncapped winners do the work.

This is how we think about late-stage private access — underwriting the distribution, not the average, and pricing every name to survive being wrong. If pre-IPO secondaries, venture-stage access, or power-law portfolio construction is on your radar, we're glad to walk through the work.