Treating Secondaries as Routine Portfolio Management
Dan Akivis, senior associate at Expansion VC, on selling secondary and managing LP relationships
The strategic point is that waiting only for a home run exit leaves value trapped in a portfolio and turns liquidity into an accident instead of a tool. In private markets, scarce information and weak buyer coverage push shares to trade at discounts, especially below the top tier of famous unicorns. A fund that sells selectively can reduce that discount, return cash to LPs earlier, and manage its own timing instead of waiting for a company to raise or go public.
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Dan Akivis is describing a shift from passive holding to portfolio management. Expansion tries to sell cost basis plus, sometimes bundling a hot company with a less known one, because off cycle liquidity is hard to create one name at a time and structured rounds leave the fund dependent on the company’s timetable.
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The discount is not theoretical. Secondary buyers often anchor to the last round or demand a blanket markdown because they lack fresh operating data. Separate research found 83% of tender offers priced at or below the last round, and more severe underpricing reduced participation, showing how illiquidity transfers value from sellers to buyers.
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The market has been moving toward Akivis's view. More companies now allow secondaries, and platforms increasingly treat tenders and continuous secondaries as complementary. But execution is still fragmented, with brokers, SPVs, issuer approvals, and uneven information all slowing trades and keeping liquidity concentrated in the best known names.
The next phase is a more programmatic private market where funds, employees, and companies treat secondary sales as routine portfolio maintenance. As that infrastructure improves, early stage firms that learn to distribute partial proceeds earlier will have an edge with LPs, and companies that support recurring liquidity will build stronger cap tables and smoother paths to eventual IPOs or direct listings.