Secondaries and Long-Term Software Predictability
Ani Banerjee, co-founder of Andromeda Group, on secondary diligence and companies staying private
The real edge in late stage software is usually not guessing the next quarter, it is recognizing business models whose outcomes compound in plain sight over years. Once a company has recurring revenue, low churn, pricing power, and room to keep selling into a large market, its long run path becomes easier to handicap than the month to month noise created by market sentiment, deal timing, or liquidity pressure in private shares.
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In practice, this is why secondaries attract long horizon investors. They are often buying into companies that already look operationally mature, but still trade in messy, thin private markets where short term price moves reflect broker friction and block dynamics more than business quality.
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Software is the clearest example because the core numbers stabilize early. Subscription revenue, retention, gross margins, CAC payback, and switching costs let investors judge whether customers keep paying and expanding, even when quarterly marks or auction prices swing around.
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The same logic helps explain why companies stay private longer. Management teams can keep compounding without public market pressure to hit every quarter, while structured secondary programs give employees and early investors some liquidity without forcing a full IPO.
This points toward a market where more value accrues before IPO, and where the winning investors are the ones built to hold through ambiguity while the business keeps proving itself. As private liquidity gets better, more capital will flow toward companies with durable recurring models, because those are the easiest to underwrite over a five to ten year window.