Secondaries Driving Venture DPI
Alex Johnson, co-founder & CEO of Velvet, on vertical AI for venture capital
The key shift is that venture liquidity is no longer waiting for IPOs, it is being manufactured inside the private market itself. That matters because a fund manager can now return cash to LPs by selling positions to another private buyer, instead of waiting years for a company to go public or get acquired. For Velvet, that makes diligence data and transaction plumbing part of the same workflow, because the same firm that studies a company may also want to syndicate it or sell part of the position later.
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DPI means cash actually returned to LPs. In a weak IPO and M&A market, secondaries became the practical release valve. The broader market backdrop supports that, with secondary volume hitting records in 2024 and venture and growth deals becoming a bigger part of that flow.
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This is why Velvet combines software and brokerage. Its product organizes decks, emails, cap tables, and memos during diligence, then its transaction arm can help place shares through brokered deals, SPVs, or GP led secondaries. Over the last 14 months, Velvet said it executed about $220 million of private placements.
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The closest comparables show the same market direction. AngelList digitized syndicates for early stage access, while Zanbato, Hiive, Augment, and EquityZen focus on secondary liquidity. Velvet is trying to sit one layer upstream, at the point where investor workflow data can surface both buy interest and sell pressure.
The next phase is a venture market where secondaries are a standard portfolio tool, not an exception. If that happens, the winning platforms will be the ones that already hold daily workflow data, know who owns what, and can turn investor intent into a compliant double opt in transaction flow much faster than a phone and spreadsheet process.