A candid Q&A on liquidity, pricing, and future trends

Victor H. Boyajian, global chair of Dentons’ Venture Technology and Emerging Growth Companies Group, sat down with Chris Bull, managing director at Kline Hill Partners, and Matt Krna, founder and managing partner at Two Meter Capital, to discuss the evolving landscape of the secondary market. They explore what’s driving increased activity, the unique dynamics of venture secondaries compared to private equity, and how investors, founders, and fund managers are leveraging secondaries for liquidity.

Boyajian (New York/San Francisco): The secondary market has been quite active lately. What’s driving that?

Bull (Kline Hill, Greenwich, CT): It really comes down to liquidity constraints in private equity and venture capital. With public markets shut down and M&A activity slow, investors and founders are turning to secondary transactions to unlock capital. It’s a dynamic space, with a wide range of participants—from early investors to fund managers and employees—seeking liquidity solutions.

Boyajian: How does the venture secondary market compare to private equity secondaries?

Krna (Two Meter Capital, Menlo Park, CA): The private equity secondary market is much more mature, with established structures and a deep network of financial service providers. Venture secondaries, by contrast, are still developing as an asset class. The venture ecosystem has grown significantly, with companies staying private longer, increasing the demand for secondary transactions to provide liquidity. Unlike private equity, where ownership is concentrated, venture cap tables are more fragmented. This complexity makes transactions challenging but also creates unique opportunities for investors.

Boyajian: Beyond providing liquidity, what role do secondary investors play?

Bull: We typically take a passive approach, meaning we’re not looking to take board seats or get involved in management. Our role is to provide capital so that founders, limited partners, investors, and employees can meet their financial goals without disrupting company operations.

Krna: But it’s not always just about writing a check. Sometimes we help structure transactions, navigate
complex deals, or connect companies with the right resources. There’s a lot of nuance in secondaries. Each deal has unique elements—whether it’s the structure, the counterparty dynamics, or the underlying business itself.

Boyajian: Do you stay involved if a company raises another round?

Bull: Generally, no. Our focus is on the secondary transaction itself, and we’re not usually participating in future funding rounds. But we do track how companies progress post-transaction.

Krna: That’s where a firm like Two Meter Capital comes in. Since we work closely with secondary investors and portfolio companies, we often have insight into which businesses are performing well. If a compelling follow-on opportunity comes up, we’re positioned to step in with capital.

Boyajian: What’s the biggest challenge in the secondary market today?

Krna: Awareness is a major hurdle, especially for our harvest management model. Many fund managers don’t realize they have options when it comes to managing out legacy portfolios. Educating the market is a big part of what we do.

Bull: On the deal side, pricing alignment remains the toughest issue. While valuations have come down from the highs of 2021, there’s still a gap between what sellers hope to get and what buyers are willing to pay. Sellers often price based on previous funding rounds, but we have to underwrite deals based on realistic outcomes. Bridging the gap between seller expectations and what buyers are willing to pay is a core part of what we do to make deals happen.

Boyajian: Looking ahead, what trends do you see shaping the secondary market?

Bull: GP-led transactions are gaining traction in venture, just as they have in private equity. We’re also seeing more structured liquidity solutions for employees as companies look for ways to manage their cap tables while retaining talent.

Krna: Another big trend is corporate venture investors reevaluating their portfolios. Whether it’s leadership changes, a strategic pivot toward AI, or shifting macroeconomic factors, corporate VCs are increasingly turning to secondaries to optimize their holdings.

Boyajian: Does a secondary sale impact a company’s next primary funding round?

Bull: It depends. If an early employee sells shares, it probably won’t matter much. But if a major investor exits at a discount, that can send a signal to the market and impact valuation discussions. Every situation is different, and investors will take context into account.

Boyajian: For anyone considering a secondary transaction, what’s your advice?

Krna: Be prepared. Whether you’re a fund manager, company executive, or employee looking to sell, understanding the process, setting realistic expectations, and working with experienced secondary investors will make the transaction smoother.

Bull: Absolutely. Transparency and communication are key. The secondary market is evolving rapidly, and those who take a strategic approach will be best positioned to take advantage of the opportunities it offers.

Victor H. Boyajian, Global Chair, Global Venture Technology
Dentons is one of the world’s largest law firms at the intersection of tech, law, and policy. Victor leads a global team focused on representing emerging growth technology companies, venture capital firms, corporate strategic and private equity firms in a broad array of matters from Silicon Valley and New York to London and Singapore, and beyond.

Chris Bull, CFA ,Managing Director, Kline Hill Partners
Chris is a managing director at Kline Hill Partners, leading investments in venture secondaries. He has extensive experience in private equity and venture capital, structuring transactions, optimizing liquidity strategies, and identifying high-growth opportunities for institutional investors.

Matt Krna, Founder and Managing Partner, Two Meter Capital
Matt Krna is the founder and managing partner of Two Meter Capital, the industry’s first portfolio harvest management firm, which has extensive experience in venture and growth-stage secondaries. He has over two decades of experience as a venture capital and growth equity investor with leadership roles at firms like SoftBank.