1/ I am seeing more and more founder secondary in venture rounds (Secondary = founders selling some of their shares before some other shareholders are able). Series B-D. I see both as an investor and through entrepreneur circles.

2/ I like secondary for entrepreneurs. Moderation is key but in a lot of situations I think it helps accelerate the co. Lots of very smart investors disagree. Here are my thoughts.

3/ Magnitude: My basic rule of thumb from what I see is market is 4+ yrs and up to 10% of founder’s equity stake with some $ cap that makes sense given stage etc. (typically <$10m)

4/ The entrepreneurial journey is brutally hard. Giving some financial relief helps remove one piece of pressure. I don’t think that secondary in the magnitude mentioned impacts the drive/persistence of great entrepreneurs.

5/ That secondary means they will be able to just sleep knowing they can pay their kids’ tuition. Secondary will make most founders better at their jobs, thus accelerating the co.

1/ Equity crowdfunding or equity investment marketplaces failed. Full stop. Didn’t work.

Here is my synopsis on why the industry hasn’t taken off. Lots of reflection and painful lessons I hope others can learn from.

2/ Reason #1: The financial feedback loop for vc takes yrs. If you want one core reason the industry has not succeeded, it is this. Time between when an investor writes a check and gets confidence she should write again- is way too long to encourage repeat investment

3/ If you are ever at a YC event and some entrepreneur pitches you on a marketplace that helps private companies raise money…..ask how they will solve this issue.

[imagine being at a cocktail event again?]

4/ I missed this point when we started. Frankly the 60+ investors that passed on us also missed it- or at least it never came up as a key concern. Not once.

The difference between credit, with financial feedback loops that took days or months, and equity is huge.

5/ In private investments it is typically >5 yrs before you see the financial feedback. Win or lose thats a long time for most people. If you’re running a VC fund you’re making $ along the way with management fees, but angel investors….are just shelling out checks.

1/ Grocery needs some help. Avg op margin in grocery is 2-3% but avg margin for public CPG is 21%. Are public CPG co's adding that much more value? No - I think that margin difference is a legacy from decades ago when the large brands mattered. Today value contribution is same.

2/ That doesn’t seem fair.

But life isn’t fair.

3/ So grocery is in trouble. Growth is negligable absent inflation. Some large grocers are levered up to the gills. All are struggling to provide value to consumer. The answer will be assortment and convenience - namely delivery and click and collect.

I said “to the gills”. Ha.

4/ OK back to assortment and convenience. Here is why those are the things that matter. First convenience. Delivery is going to become table stakes in grocery. Ocado is killing it in UK. @Instacart will win here. (yes…..I think Instacart will beat @Amazon at grocery delivery).

5/ Even smaller retailers will need to invest in technology to offer click and collect if they cant do delivery.....and if that is table stakes, that means it is just to maintain market share.....and ROIC and margins and cash flow go lower.

VC backed solutions to the rescue.