Pre-IPO Secondaries in the Top 10 Names

Everything below expands these three lines.

What you get: An LP interest in a vehicle that holds an interest in another vehicle, which holds the shares. There is no direct cap table access at this size in the top names at any price. Allocations there are relationship-driven, not price-driven.

Fees: You pay all three components, which is what distinguishes this tier.

A 15/1/10 quote is normal here, not predatory. The undisclosed part is the spread between the Layer 1's cost basis and your entry price.

What this costs in outcome terms: At 15/1/10 with a 12% upstream spread over four years, roughly 76 cents of each committed dollar reaches actual exposure.

The company must appreciate roughly 35% for you to return capital, and roughly 180% for you to double.

Process: One to three weeks. Documents arrive pre-signed with a short closing window. Speed is presented as evidence of access.

What to verify: Ask the sponsor for the ownership chain end to end, the consent covering the Layer 1's holding, the Layer 1's cost basis against your entry price, and the share class. If the chain cannot be produced, price the position as a possible total loss.

What you get: An LP interest in the vehicle that holds the shares directly. One layer, not two. You can be the anchor, which changes what you can negotiate.

Fees: The market convention at this size is that the sponsor takes economics one way or the other, not both.

Add 1-3% intermediary fee on a negotiated block and $50,000-250,000 of legal. Effective exposure lands at roughly 88-95 cents per dollar committed, and break-even at roughly 1.05x to 1.15x.

Process: Two to twelve weeks. Source the seller, confirm transferability against the charter and shareholder agreement, price, obtain consent, then purchase agreement and transfer of record. ROFR is the dominant execution risk. Plan on a meaningful failure rate on negotiated blocks in restricted names.

What to negotiate: Management fee on invested rather than committed capital. Quarterly reporting with position detail. Notice rights on downstream transfers. A defined term with a wind-up mechanic. Pro rata on follow-on vehicles.

What you get: Either an LP interest in a Layer 1 vehicle on better terms than the tier below, or shares registered in your own name.

Fees: Three distinct outcomes.

The third case is the one worth understanding properly. Fees at this level are not a function of ticket size. They are a function of whether the company wants you specifically: a strategic partner, a sovereign or anchor institution, a name that helps the next round or the listing. If you are that buyer, the economics invert and the company may pay to have you there. If you are simply large, you pay.

Also available at this size: Primary subscription for newly issued shares. This is not a transfer, so it sits outside the transfer restrictions entirely, and it is frequently the structure the company would prefer. Anchoring a company-run tender offer is the other clean route.

Process: One week to six months. Approach the company before the seller. Consent first, price second.

What to negotiate: Information rights including financials and quarterly KPIs. Pro rata. Transfer rights. MFN against other buyers in the same window. Registration rights.

Quotes are written as upfront / management / carry. A 15/1/10 is 15% upfront on committed capital, 1% annual management, 10% carry.

Three things to check on any quote.

Whether management fee runs on committed or invested capital, and for how long: Committed capital with no defined term is the most expensive version and the most common at small size.

Whether there is a hurdle: Carry with no hurdle means the sponsor takes a share of the first dollar of gain.

What the vehicle paid: The upstream spread does not appear in the fee schedule. It appears in your entry price. Ask for the cost basis.

The structural point across all three tiers: total fee load runs roughly 20-35% of committed capital at $1-10m, 5-12% at $10-100m, and 1-3% at $100m+. Consolidating a client into fewer, larger tickets is worth more than any manager selection decision available at the small end.

SPVs are a standard structure and approved vehicles sit on the cap tables of the largest private names today. The test is not the structure, it is authorization.

Shares in these companies cannot move, directly or indirectly, without written company consent. A consented transfer is valid. An unconsented one is void. An approved vehicle can admit new LPs and permit LP stakes to transfer where it obtains approval in advance, and consent is generally granted per transaction rather than as a standing permission.

Validity runs upstream. A consented LP transfer above an unconsented share purchase still fails. Layer count is not the risk variable. Documented consent at each link is.

This is why the tiers above track fee load and access together. Consent is a relationship, and relationships are allocated by size. At $100m you negotiate it and hold the letter. At $10m to $100m you obtain it with counsel. At $1m to $10m you are usually relying on a sponsor's assurance about a chain you cannot inspect.

We only present listings, data and deals that have been confirmed as transactionable by a Series 24 holder who has completed the first layer of compliance.

We track and benchmark more than 150 names across all three layers and their fee structures. What we present is tested against comparable alternatives at your size, rather than being whatever a single sponsor happened to offer, or whatever you might have read in the news. You get terms that are actionable for you, not terms made for a top 10 VC.

Layer 1 / Layer 2: A Layer 1 vehicle holds shares. A Layer 2 vehicle holds an interest in a Layer 1.

Upfront or access fee: Charged on committed capital at subscription. Not amortised, not refundable.

Upstream spread: The markup between the holding vehicle's cost basis and the price at which interests are offered downstream.

ROFR: Right of first refusal. Allows the company or existing holders to pre-empt a proposed transfer.

Tender offer: A company-organised liquidity event allowing employees to sell to approved buyers.