A Conversation on the Future of Private Market Infrastructure
A Conversation on the Future of Private Market Infrastructure
Dec 30, 2022
Halle Kaplan-Allen
This week, we hosted a discussion with Eric Bahn of Hustle Fund and Chris Harvey of Harvey Esquire on the future of private market infrastructure and how standardization is critical to building a platform with staying power. Our conversation included predictions on private markets, unrealized expectations of the industry, and standardization’s power to lower barriers to entry. Here are the highlights!
If you would like to listen to the full discussion, you can find the event recording here.
Where do you hope to create the biggest impact in VC over the next few years?
Nik Talreja (NT): I hope to impact how individuals participate in the private markets so it is more like the public markets, where there are fewer gatekeepers. Through Sydecar and standardization, the private markets can reflect the public markets in transparency and liquidity.
Chris Harvey (CH): Over the past several years, there have been a lot of how-to guides for startups from venture capitalists. But, raising a fund is still opaque. My biggest impact will be creating educational pieces on starting a fund
Eric Bahn (EB): My first goal is to inspire more kindness in this industry. There’s this trope of the brilliant jerk. This is completely wrong. You can be a nice person and still be enormously successful.
My second is bringing more voices into this community. Industry leaders tend to support those that look like them. This excludes a massive population of founders who may not look like the traditional archetype, but are building enormous businesses.
Is there a trend that you predicted to play out in VC that hasn't, or hasn't yet, played out?
NT: Given this past year of economic compression, I worried we would see a decreased number of syndicates and emerging managers. However, these stakeholders did not stop playing the game. In fact, we still see a large cohort of emerging manners indicating they remain an active part of the ecosystem.
CH: I was hoping that opening and running a fund would be as simple as touching a button. That has not fully played out yet.
EB: Supporting underrepresented founders was convenient during the good time. In the downturn, it's less convenient. From what I can tell on LP sentiment, they are retrenching towards what feels safe, for example the privileged white male from Stanford types.
What does standardizing private markets mean to you?
NT: Public markets are easy to engage with. Trading happens in seconds. There is no reason private markets cannot be similar. Standardizing documents and information will make it easier to execute on deals, allowing private markets to be more liquid.
CH: You can’t have standardization without transparency. As a lawyer, the forms, market data, and processes have historically been gated. There is no single standard, so executing on investments is currently done piecemeal with intermediaries. Releasing standards into the public will create transparency and a more efficient ecosystem.
EB: There are no standard ways for how valuations are measured in the seed ecosystem. Standardization can bring consistency to understanding startup values and fund performance. This translates to a lower cost of entry, which will be enormously helpful for the industry.
What are the push backs from investors against modernizing private markets?
NT: There are simple items from investors who insist on signing in blue ink that we can navigate.
On the more complicated side, institutional investors may insist on having documents reviewed by their counsel, leading to markups and changes that prevent standardization. This is an opportunity to learn what their needs are. In engaging in conversation, we see the ultimate goal is a seamless transaction, and gatekeepers will insist on changes that do not actually hold value. When we get to this understanding, we see that even large deals can be standardized.
There will never be a point where 100% of the market is using the standards, but eventually 80% will find that they can. This will create the transparency, liquidity, and lower cost that we are building toward.
This week, we hosted a discussion with Eric Bahn of Hustle Fund and Chris Harvey of Harvey Esquire on the future of private market infrastructure and how standardization is critical to building a platform with staying power. Our conversation included predictions on private markets, unrealized expectations of the industry, and standardization’s power to lower barriers to entry. Here are the highlights!
If you would like to listen to the full discussion, you can find the event recording here.
Where do you hope to create the biggest impact in VC over the next few years?
Nik Talreja (NT): I hope to impact how individuals participate in the private markets so it is more like the public markets, where there are fewer gatekeepers. Through Sydecar and standardization, the private markets can reflect the public markets in transparency and liquidity.
Chris Harvey (CH): Over the past several years, there have been a lot of how-to guides for startups from venture capitalists. But, raising a fund is still opaque. My biggest impact will be creating educational pieces on starting a fund
Eric Bahn (EB): My first goal is to inspire more kindness in this industry. There’s this trope of the brilliant jerk. This is completely wrong. You can be a nice person and still be enormously successful.
My second is bringing more voices into this community. Industry leaders tend to support those that look like them. This excludes a massive population of founders who may not look like the traditional archetype, but are building enormous businesses.
Is there a trend that you predicted to play out in VC that hasn't, or hasn't yet, played out?
NT: Given this past year of economic compression, I worried we would see a decreased number of syndicates and emerging managers. However, these stakeholders did not stop playing the game. In fact, we still see a large cohort of emerging manners indicating they remain an active part of the ecosystem.
CH: I was hoping that opening and running a fund would be as simple as touching a button. That has not fully played out yet.
EB: Supporting underrepresented founders was convenient during the good time. In the downturn, it's less convenient. From what I can tell on LP sentiment, they are retrenching towards what feels safe, for example the privileged white male from Stanford types.
What does standardizing private markets mean to you?
NT: Public markets are easy to engage with. Trading happens in seconds. There is no reason private markets cannot be similar. Standardizing documents and information will make it easier to execute on deals, allowing private markets to be more liquid.
CH: You can’t have standardization without transparency. As a lawyer, the forms, market data, and processes have historically been gated. There is no single standard, so executing on investments is currently done piecemeal with intermediaries. Releasing standards into the public will create transparency and a more efficient ecosystem.
EB: There are no standard ways for how valuations are measured in the seed ecosystem. Standardization can bring consistency to understanding startup values and fund performance. This translates to a lower cost of entry, which will be enormously helpful for the industry.
What are the push backs from investors against modernizing private markets?
NT: There are simple items from investors who insist on signing in blue ink that we can navigate.
On the more complicated side, institutional investors may insist on having documents reviewed by their counsel, leading to markups and changes that prevent standardization. This is an opportunity to learn what their needs are. In engaging in conversation, we see the ultimate goal is a seamless transaction, and gatekeepers will insist on changes that do not actually hold value. When we get to this understanding, we see that even large deals can be standardized.
There will never be a point where 100% of the market is using the standards, but eventually 80% will find that they can. This will create the transparency, liquidity, and lower cost that we are building toward.
This week, we hosted a discussion with Eric Bahn of Hustle Fund and Chris Harvey of Harvey Esquire on the future of private market infrastructure and how standardization is critical to building a platform with staying power. Our conversation included predictions on private markets, unrealized expectations of the industry, and standardization’s power to lower barriers to entry. Here are the highlights!
If you would like to listen to the full discussion, you can find the event recording here.
Where do you hope to create the biggest impact in VC over the next few years?
Nik Talreja (NT): I hope to impact how individuals participate in the private markets so it is more like the public markets, where there are fewer gatekeepers. Through Sydecar and standardization, the private markets can reflect the public markets in transparency and liquidity.
Chris Harvey (CH): Over the past several years, there have been a lot of how-to guides for startups from venture capitalists. But, raising a fund is still opaque. My biggest impact will be creating educational pieces on starting a fund
Eric Bahn (EB): My first goal is to inspire more kindness in this industry. There’s this trope of the brilliant jerk. This is completely wrong. You can be a nice person and still be enormously successful.
My second is bringing more voices into this community. Industry leaders tend to support those that look like them. This excludes a massive population of founders who may not look like the traditional archetype, but are building enormous businesses.
Is there a trend that you predicted to play out in VC that hasn't, or hasn't yet, played out?
NT: Given this past year of economic compression, I worried we would see a decreased number of syndicates and emerging managers. However, these stakeholders did not stop playing the game. In fact, we still see a large cohort of emerging manners indicating they remain an active part of the ecosystem.
CH: I was hoping that opening and running a fund would be as simple as touching a button. That has not fully played out yet.
EB: Supporting underrepresented founders was convenient during the good time. In the downturn, it's less convenient. From what I can tell on LP sentiment, they are retrenching towards what feels safe, for example the privileged white male from Stanford types.
What does standardizing private markets mean to you?
NT: Public markets are easy to engage with. Trading happens in seconds. There is no reason private markets cannot be similar. Standardizing documents and information will make it easier to execute on deals, allowing private markets to be more liquid.
CH: You can’t have standardization without transparency. As a lawyer, the forms, market data, and processes have historically been gated. There is no single standard, so executing on investments is currently done piecemeal with intermediaries. Releasing standards into the public will create transparency and a more efficient ecosystem.
EB: There are no standard ways for how valuations are measured in the seed ecosystem. Standardization can bring consistency to understanding startup values and fund performance. This translates to a lower cost of entry, which will be enormously helpful for the industry.
What are the push backs from investors against modernizing private markets?
NT: There are simple items from investors who insist on signing in blue ink that we can navigate.
On the more complicated side, institutional investors may insist on having documents reviewed by their counsel, leading to markups and changes that prevent standardization. This is an opportunity to learn what their needs are. In engaging in conversation, we see the ultimate goal is a seamless transaction, and gatekeepers will insist on changes that do not actually hold value. When we get to this understanding, we see that even large deals can be standardized.
There will never be a point where 100% of the market is using the standards, but eventually 80% will find that they can. This will create the transparency, liquidity, and lower cost that we are building toward.
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