Investment Strategy

Ask three investors who have committed to late-stage private companies how they built the position and you’ll get three different answers. Deciding to commit is one thing. Building the position is another. The machinery doesn’t exist yet In public markets you barely have to think about it. Take investing for retirement through an employer 401(k), for example: pick a target-date fund and it sets your stock-bond split.

Vanguard spent fifty years telling you to own the whole market. Last month they acknowledged part of it has moved. This spring, SpaceX, OpenAI and Anthropic together passed $3 trillion in value. As of June, none of them were in your index fund.

A lockup is a contractual restriction, negotiated between the company and its underwriters, that prevents insiders, employees, and pre-IPO investors from selling shares for a set period after listing. Standard terms run 90 to 180 days, though the exact length and who it applies to varies by deal.

Every few months at PEP name comes through that the rest of the market has not yet priced correctly yet. By the time everyone agrees it’s a great company, the price has already moved past the point where it’s a great deal. The window between those two moments is where the actual work happens, and it has less to do with access than you might think (access, after all, is at premium when “everyone” wants into the deal).

Secondary venture investing is harder than it looks. The asset class concentrates liquidity around a handful of genuinely great companies, which creates the illusion that picking winning secondaries is mostly about picking winning companies. It isn't. In practice, there are five distinct ways a secondary investment can go wrong. Each hurdle requires its own discipline to prevent. At PrePublic Equity Partners, our investment process is built around avoiding all five.