Michele Schueli, GP at ARMYN Capital, stands out in the venture capital space for his strategic focus on secondary transactions. With a keen eye for identifying market dislocations, Michele has successfully navigated the turbulence of recent years, turning undervalued assets into profitable opportunities. His approach to secondary investments reflects a blend of opportunism, market insight, and a deep understanding of the evolving needs of LPs.

Opportunity in Market Dislocations

Michele's interest in secondary transactions began in 2019 and persisted even through the market turbulence of 2022 and 2023. In fact, as valuations of high-quality companies fluctuated dramatically, Michele identified opportunities where solid companies were trading at significant discounts. 

Michele's strategy at ARMYN Capital also includes facilitating liquidity for LPs through carefully timed transactions. By helping LPs find buyers when the right opportunity arises, Michele ensures that his LPs can capitalize on market conditions without being locked into long-term positions. Michele highlighted that some of the most coveted names in the market are only accessible through secondary transactions.

Evaluating Secondary Deals

When assessing secondary deals, Michele breaks them down into two categories: highly sought-after tender offers in companies such as Stripe, and companies that are temporarily mispriced due to market conditions due to individual sellers seeking liquidity. For the high-demand names, the focus is on securing access. However, for mispriced opportunities, ARMYN relies heavily on financial data and their knowledge of the company. 

Michele also emphasizes the importance of understanding the preference stack when dealing with secondary transactions; it's crucial to know where that stock sits in the stack. This can significantly impact the investment's risk and return profile.

Sydecar’s Role in Secondary Transactions

Sydecar’s platform has been a game-changer for ARMYN Capital when it comes to handling secondary transactions. One feature that stands out is Sydecar’s easy-to-use pooling system, which makes gathering and managing funds from multiple investors a breeze. This has saved Michele a lot of time and allowed him to focus on finding the right deals instead of worrying about the logistics.

With Sydecar, Michele has been able to scale ARMYN Capital’s secondary strategy, making the process faster and more reliable. The platform’s efficiency has become a key part of ARMYN’s success, helping Michele stay competitive in a fast-moving market.

Looking Ahead

As the venture capital market continues to evolve, Michele believes that secondary transactions will remain a vital part of ARMYN’s investment strategy, particularly in the absence of a robust IPO market. 

Michele anticipates that the trend of secondary transactions will persist, driven by the need for liquidity and the maturation of private companies that might have otherwise gone public in different market conditions. He believes that the role of secondaries is only going to grow, especially as more companies embrace tender offers as a viable alternative to IPOs. 

If you're inspired by Michele’s approach, check out how you can streamline your own secondary transactions with our interactive product demo. With our interactive demo, you’ll get a step-by-step walkthrough of how to create a deal on our platform. Whether you're a seasoned manager or new to secondary deals, this demo will show you how easy Sydecar makes the process.