I recently read Will Manidis’ piece arguing that patient capital will eat the world.
Quick recap: The traditional venture model is increasingly mismatched with reality because it takes much longer for companies to exit, the ones that truly matter require billions of dollars, and exit markets are structurally impaired. Thus, the VC industry will undergo a similar evolution to the one that PE did 20 years ago – it’ll shift to “patient capital” (e.g., evergreen vehicles, permanent capital) provided by new types of LPs.
Maybe he’s right.
But even if venture eventually evolves toward patient‑capital structures, I believe that transition will likely take years. The majority of venture capital today likely sits in closed‑end funds with fixed timelines, fixed governance, and LP bases that were underwritten for a very different liquidity model. Moving to patient‑capital structures requires not just new fund formats, but LP education, incentive realignment, and time for existing funds to run their course.
Even firms that believe in patient capital can’t flip a switch overnight. In the meantime, venture still operates largely on fixed‑life funds. LPs still need distributions. Founders and employees still have most of their net worth locked up, and exits (IPO/M&A) remain available only to a narrow slice of companies.
Until that structural shift happens, my view is that secondaries are the most proven and scaled liquidity mechanism already operating across the ecosystem.
Secondaries are no longer a side market
We’ve already written about how secondaries have quietly become a core liquidity mechanism in venture.
In “Secondaries Go Mainstream: The Quiet Force Reshaping Liquidity Across the Startup Ecosystem” (link) my colleague Omri Hozez lays out the first‑order shift: in a liquidity‑constrained market, secondaries are no longer taboo or opportunistic — they’re happening weekly, driven by founders, early investors, GPs, and LPs who need flexibility when IPO and M&A are insufficient for most companies.
That piece focuses (intentionally) on describing the global rise of secondaries, normalizing their use, and explaining why they’ve become a strategic tool rather than a last resort.
This post builds on that foundation — but connects it to a second shift that, in my view, matters just as much: how ownership and duration are managed in a right‑tail world.
The missing link: secondaries in a “Terawatt / right‑tail” world
Alan Feld, Vintage’s co‑founder and today Mentor‑in‑Residence, wrote “The Terawatt Power Law of Venture Capital” (link) in May 2025. His argument was that we’re moving into a world where returns are increasingly concentrated in a small number of exceptional companies — ones that are larger, more capital‑intensive, more durable, and take longer to fully mature.
Whether you call them Terawatt companies, right‑tail outliers, compounders, decacorns or hectacorns, the implication is the same:
The median company matters less. The right tail matters more.
Once returns concentrate into a small number of outliers, the question stops being “how do we maximize outcomes for the average company?” and becomes “how do we get exposure and stay exposed to the few that truly matter?”
This has a direct, and often under‑discussed, implication for liquidity.
If most returns are driven by a small set of long‑duration winners, then liquidity cannot rely solely on point‑in‑time exits. Ownership has to be reallocated over time from capital that needs liquidity to capital that can hold duration.
That’s where secondaries stop being just a “release valve” and start becoming the operating mechanism for ownership transfer in a right‑tail world.
Two nuances that matter (and are often blurred)
1. Secondaries solve liquidity, but pricing depends on real duration and real knowledge
Secondaries solve many liquidity needs: LPs rebalancing portfolios, GPs managing fund life and DPI, founders and employees seeking partial liquidity, and early investors needing to recycle capital.
But secondary pricing is inseparable from who is on the other side of the trade and how well they understand the underlying asset.
When there is long‑duration capital with deep company‑level and market‑level understanding, secondaries can clear at thoughtful prices that reflect quality rather than sentiment. When everyone needs liquidity at the same time or when buyers are pricing primarily based on market mood, liquidity may still exist, but often at punitive discounts or unjustified premiums.
In that sense, secondaries move liquidity while long‑duration, informed capital anchors pricing.
2. This is not about rescuing weak companies
A lot of the pain in venture today comes from zombie companies — businesses that cannot exit at attractive multiples and may never justify long‑term ownership.
Patient capital does not fix broken companies. Secondaries do not magically turn weak assets into strong ones.
The opportunity (and the reason this matters) is the right tail: the small number of companies that continue compounding value well beyond a traditional fund timeline, but long before a full exit is available.
That’s where selective liquidity matters.
That’s where ownership transfer matters.
That’s where underwriting, price discipline, and duration alignment matter.
What “liquidity as a product” looks like in practice
If liquidity becomes a spectrum rather than an event, the economic opportunity shifts toward selective, underwritten liquidity — providing liquidity when others need it, while maintaining exposure to long‑term winners.
At Vintage, our secondary strategy reflects a few beliefs shaped by operating in this market for over two decades:
- Small fund size is an advantage. A smaller fund can pursue high‑conviction, selective opportunities that are too small or too bespoke for mega‑funds, but still meaningful for a concentrated portfolio. It also allows us to remain disciplined.
- The opportunity spans both fund and company secondaries. Ownership reallocation happens at the LP level and at the company level. A strategy that can operate across both has a broader, more flexible opportunity set.
- Data is a real edge. A deep internal database of funds and companies allows us to come prepared, do much of the work upfront, and focus valuation discussions on underlying fundamentals.
- Differentiated relationships. Leading GPs are extremely careful about who buys out their LPs. As long‑standing LPs in many leading venture firms, we are often among a small group of trusted buyers who get a real look at these opportunities.
- We are long-term partners. And we care. Sellers enjoy a quick, transparent and effective process. GPs and CEOs enjoy partnering with a long-term oriented, value-adding firm.
- Experience matters — especially in pricing duration. We’ve been doing venture secondaries for over 20 years, through multiple cycles, with an emphasis on discipline: no leverage, no return‑target drift, and a willingness to pass when pricing doesn’t compensate for duration risk.
Taken together, this is how we’ve been able to build secondary exposure to generational companies.
So… is Manidis right?
Maybe.
Patient capital may well become a larger part of the venture ecosystem over time. But structural change in venture is slow, uneven, and path‑dependent.
Until that world fully materializes, I argue that secondaries are the most tangible way venture is already shifting from “liquidity as an event” to “liquidity as a product.”
And in a Terawatt / right‑tail world, that product isn’t just about liquidity — it’s about who gets to own the outcomes that actually matter, for as long as they matter.
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