Tag: Secondary Sales

Exit Learnings From the Airtable Acquisition

Airtable’s recent acquisition shows why seed investing still works, why seed VCs must know when returns are good enough to exit, and why smaller funds can benefit from exits of all sizes.

One of the venture darlings of the SaaS cycle, Airtable got acquired by BendingSpoons this week for $1.285B enterprise value and $2.25B equity value. As of June 2026, the company was reportedly doing ~$480M ARR but only growing ~20% YoY.

As an emerging manager at the pre-seed/seed stage, the most valuable insights I am taking away from the Airtable acquisition are around DPI and timing of exits:

1/ Even at a fairly low exit revenue multiple, Airtable seed investors like Caffeinated and Freestyle have reportedly generated anywhere from a 30-50x multiple on invested capital (~30-35% IRR) over an 11-year hold period.

While they might have been holding this position on their books at multiples of this due to the 2021 inflated growth round, on a standalone basis, this is still a solid seed exit, especially if the fund sizes were relatively small.

This should be a great proof point for both LPs and emerging managers that as long as you can do seed at the right valuations (which means you have to do non-consensus-and-right deals), even in a relatively sub-optimal exit outcome, investments can still move the needle massively, especially for smaller fund sizes.

As a corollary to this insight, I get extremely uncomfortable when I see post-YC demo day seed deals at $50-100M cap and some marquee researcher-led companies raising seed at $1-5B valuation.

As a smaller fund, if I am doing such deals, I better be right. Which is unlike, say, a General Catalyst or a16z, who can spray-and-pray without bothering about seed valuations, as they just need to catch a potential outlier in the fishing net and crowd in gobs of follow-on capital into it.

2/ Airtable had raised a Series F in 2021 at a ~$11B pre-money valuation. Based on what I saw in that era, large incoming investors like Coatue, Greenoaks etc. would have had significant appetite to buy out older investors in secondaries during that round.

As per Grok, Airtable’s seed round was at a ~$7.3M post-money valuation, and by Series F, seed investors had seen 80-90% dilution. Assuming 80% dilution and say a 20-30% discount on Series F primary, Airtable seed investors would have had the opportunity to sell secondary at a ~220-250x MOIC in 2021 (I’m sure a bunch of them did at least partial secondaries).

So, given changing macro conditions, driven by a major technology shift in this case, seed investors saw a theoretical MOIC compression by a factor of 5-8x.

A learning for me here is that as seed investors, once we have got a more than adequate risk-adjusted return, we should look to actively sell and pass on the baton to later-stage investors in the capital stack who are more suited to the current risk-reward dynamics. Especially if the seed position has been held for 5-7 years & beyond.

Based on my own experience, this requires a major emotional re-balance, and when things are going up, greed kicks in massively, and the brain finds it incredibly hard to play devil’s advocate and evaluate risks that are still inherent in the business.

Also, we as seed investors are emotional & optimistic by definition (or else, we wouldn’t back people with just an idea). For this personality type, keeping commitment and consistency bias at bay becomes even more difficult, especially when 3rd parties are finding your sh*t as sweet-smelling as you 🙂

There are a few ways emerging managers, especially solo GPs like me, can enforce exit discipline:

  • Establish a rules-based exit framework, and stick to it. It might lead to leaving money on the table in specific instances, but over a long time scale and across multiple deals, it will serve fund managers well in terms of risk management and exit discipline.
  • Lean on your Investment Committee, LPAC, or, in the case of solo GPs with smaller funds, a set of experienced GPs who can be your informal GP advisory board. Ask these folks to proactively play devil’s advocate, look at the deal on the table from the outside, call out your potential biases, and essentially help you evaluate the exit opportunity holistically.

3/ The Airtable seed MOICs further support why smaller funds find it so much easier to generate outsized index-beating returns.

For a sub-$10M fund, a 30-50x MOIC deal would likely return at least the fund in most cases. Whereas for a $50-100M fund, unless they concentrated enough capital into what turns out to be an eventual winner (something that is really hard to do in practice and requires insane judgment), it might only return 25-50% of the fund even with a winning exit.

Hence, I keep going back to this famous line from Mike Maples of Floodgate – “Your fund size is your strategy”.

Why AI Valuations Aren’t That Odd

AI is an exponential technology and therefore, the “winners” deserve significantly higher valuations. But few can access them. Therefore, the quest for non-consensus-and-right still stands.

I think all of us are still systematically underpricing the extent of value AI is going to unlock for both enterprises and individuals.

As with compounding, the human brain isn’t wired to grasp exponentials. And the outcomes AI will drive over the next few decades are honestly unfathomable in humanity’s current context.

If you operate with this premise, it makes sense why category-defining companies are being valued at trillions, compared to going public at $10-100B in the 2010s.

This dynamic should reflect across the startup financing stack, and the reason why early and growth investors today are paying up for the best companies.

As long as you can be more-right-than-wrong in underwriting these companies as category-winners, beyond a certain level of de-risking/ PMF, the entry valuation really doesn’t matter because the commensurate exit valuations have also gone up dramatically.

I think a16z was one of the earliest VCs to grasp this change and also have the mental plasticity and capital war chest to execute behind this philosophy.

What is unclear to me is: while the power law winners in both public and private markets will keep going up in value without any real ceiling, does the median venture exit outcome also similarly increase in value? Eg., does the $100-250M M&A/ secondary sale outcome from the 2010s become the $5-10B outcome in 2030?

‘Cos if that’s the case, then it makes complete sense why entry valuations in YC have gone up from $10M a decade back to $50M today. And all pre-seed and seed investors like us should willingly pay up for whatever we deem to be the “best” consensus companies in our deal flow.

Another point: for pre-seed & seed stage micro VCs like Operators Studio
, I expect secondary sales during growth rounds to constitute a large portion of our exit outcomes. I asked ChatGPT to analyze how Series C pre-money valuations in US startups have evolved over the last decade.

Interestingly, the median Series C pre-money valuation rose from approximately $75M in 2016 to $320M in 2025, a little over 4x. Here’s the annual trend:

So, it’s not illogical that seed valuations should be expected to go up by a similar factor during this time period, especially in an efficient venture market like the Bay Area.

It’s obvious now that accessing growth rounds in the very best companies is delivering early-stage-like venture returns in this market. However, the reality is that beyond a handful of top VCs, most of us fund managers neither have this access nor the fund size to do these types of deals.

For us emerging managers, the equation still stays the same – our best bet is to find non-consensus-and-right companies early enough.

It’s hard to find non-consensus teams in consensus fishing ponds like Stanford, ex-foundational model folks, repeat unicorn founders, and celebrity execs stepping out to startup.

We will need to look beyond these channels, back non-obvious people from non-pipeline backgrounds, perhaps fish outside the US.

PS: If you are curious about how to be non-consensus-and right, you might find these posts of mine interesting – A Talent Scout Mindset For VC, An Investing Framework to Find Startup Diamonds and Staying In The Ring Long Enough.

Making Hay During Market Peaks

The recent rise & fall of Hopin shows that during market peaks, buy-side is the patsy while sell-side is the baller.

Here’s how you can position yourself to “reap” during market peaks.

One of the more interesting startup stories of the last few weeks has been the rise & fall of Hopin, a virtual events platform. After having raised more than $1Bn from the likes of a16z, General Catalyst, Tiger & Coatue, who valued the company at close to $7.7Bn as recently as 2021, Hopin’s core assets were recently acquired by RingCentral for a paltry $15Mn upfront consideration (+ another $35Mn contingent consideration, based on performance targets to be met in future).

RingCentral’s filing on the acquisition of Hopin

Now here’s the most interesting part of the story – while the company has seen a drastic reversal in fortunes, the Hopin founder has already netted ~$195Mn personally by selling his shares in secondary transactions. With the company’s recent subpar exit, the issue of founders making life-changing money before investors & other shareholders have made any returns is now attracting serious attention.

These developments got me reflecting on some interesting learnings from this story for founders, investors, and employees. Here are some real-time thoughts running through my head:

1/ Market peaks can get wildly irrational – the last few cycles indicate that peaks in asset prices tend to typically happen every 7-8 years, perhaps even 10 years. Clearly, they aren’t frequent and one would expect to catch only 2-3 at best during the core years of any career.

But when the peaks do happen, they are wild! The dot-com bubble saw sub-scale companies with no business models go IPO within a few years of starting up. During the housing bubble of ’07-’08, both individual investors & Wall Street assumed that house prices would keep going up forever, with banks engaging in rampant sub-prime lending & their investment banking arms trading complex derivatives that they themselves struggled to fully understand (remember the jenga scene from the movie ‘The Big Short’?)

Ryan Gosling in ‘The Big Short’

Similarly, 2021 was the peak of a post-Covid, liquidity-fueled mania. Crypto shitcoins, ape NFTs, meme stocks, IPOs of unbaked tech companies, and real estate boom in as far as Denver & Raleigh, there was literally no asset class that was untouched by super-inflated valuations & crazy investor behavior.

One of my favorite lines is – “crowds have short financial memories”. As a full generational cohort turns over every 7-10 years & new blood comes in, it tends to underestimate how high the market peaks can really go. To truly appreciate this, one has to live through at least one such peak, & be both old enough to participate in it as well as mature enough to assimilate learnings from it.

2/ Sow for many years, and then sell “high” – to make the most upside over a career, one has to be well-positioned on the sell side when the market peaks. These peaks are getting higher & wilder with each new cycle, therefore turning out to be generational selling opportunities.

Framing this idea in a more interesting way:

During market peaks, buy-side is the patsy while sell-side is the baller.

How does one ensure you are the baller when the next peak comes around? That’s where executing with persistence during tough times becomes critical. When times are hard and one has to be a price-taker (like the current funding environment), that’s precisely when founders should be heads-down in the “sow” mode, laying a solid foundation for the business & being as capital efficient as possible. So when the peak is around the corner, the business is well-positioned to be in a “reap” mode.

Btw, this advice applies to all asset classes & includes careers too. Peaks are the best times to get that coveted CXO role, get quicker promotions, and sell RSUs at a massive premium. But, being firmly positioned to reap these benefits requires many years of upfront sowing.

3/ Leverage diversity to avoid being the patsy – inspired by that famous line from Mike Tyson – “everyone has a plan until they get punched in the mouth”, I have my own version of it for investor behavior during peaks:

Everyone is rational until they experience a bull run.

Greed & fear are two core driving emotions of human behavior. The job of a professional investor is to manage these emotions & hold on to the fundamentals of doing business during both good & bad times. Unfortunately, as the Hopin example shows, this is easier said than done. Case in point: even the best VCs neglected to do basic due diligence while investing in FTX.

I was thinking hard about what investors can do to avoid becoming the patsy. One word that kept coming up in my mind is “diversity”. Building a diverse team that brings together both the optimism of youth as well as the battle scars of experience across multiple cycles, could be a good way to provide behavioral checks and balances. Of course, merely assembling diversity isn’t enough. Empowering everyone equally so each person has a voice at the table is critical to leverage this diversity.

While the best option is “direct” diversity in the team, investors can also utilize “indirect” diversity – surrounding the team with investment committees & advisory boards that can step up at the right time to provide battle-hardened inputs. Again, it’s vital to ensure that these roles don’t end up as rubber stamps. Instead, they need to be staffed with people who have the stature & credibility to ask the tough questions & play devil’s advocate when required.

Overall, it’s important to set up mechanisms that can create behavioral balance within the firm – naturally introduce a bit of fear when greed is rampant in the market, & bring back some greed when everyone else is fearful.

Be greedy when others are fearful.

Warren Buffet

Closing out with my 2 cents on founders doing secondary sales – founders take extraordinary risks, sacrifice immensely & literally go through the fire for years, sometimes decades, before seeing any payout. If there are willing buyers for some of their stake, I see no reason why they should be admonished for selling, unless there is something unethical or illegal about it.

Investors hedge their bets across a diversified portfolio while founders put all their life’s eggs in one basket. A majority of them draw below-market salaries for several years and don’t see a significant financial outcome for ages. A large proportion of them never see a commensurate payout at all, courtesy of the VC preference stake. When no one really sheds a tear for these struggles, often framing them as “a typical price every founder pays”, people shouldn’t be complaining when some of them get the opportunity to make some early money during market peaks.

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