How will the availability of synthetic derivatives on private company stocks affect private market investors' investment strategies?

I think that VC as a product, if you will, is really important to helping companies innovate and to creating game-changing companies. When I talk about VC as a product, I don't mean money. That's not the product. The VC product is the expertise that comes with that early-stage investor and, beyond the expertise, the desire to help a founding team and an early team build something that can change the world. That's what the product of VC is.

I get excited by Caplight because I think that, if Caplight works in the way it should, the VC product gets better, because it removes a lot of the competition that is being created for VCs to try to get into the best possible deal they can when they have to compete with so many different types of investors who are not really coming into the mix for necessarily the same thing. Their products are more capital-based, so it's access to cash, it's access to resources. That’s a little bit of a different product. I think that that product is still helpful, and it helps a growth company grow and scale and get their product into more people's hands. There's certainly value in that, but it's different from the other product that I described -- of the domain knowledge, the expertise, and the willingness to roll up your sleeves and sit side by side with a founder to help them solve whatever problem is on their plate. If Caplight exists in the way it should, the groups who are more financially motivated and who are really trying to hit certain return profiles to serve their clients who are their LPs and fiduciaries will have a venue to do that on a pure economic basis that doesn't touch and interfere with the VC product.

That's a long-winded way of saying that I think that people who want to specifically be financial investors shouldn't actually own private company stock. They should be able to trade the value of those shares, but without ever touching them. The people who want to invest in the private companies because they want to be true partners to the companies themselves should then have more leeway to deploy those dollars, build those company relationships and ultimately build those companies, because of the reduction in noise that's happening.