[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Trace Cohen [@Trace_Cohen](/creator/twitter/Trace_Cohen) on x 20.3K followers Created: 2025-07-23 02:53:12 UTC Secondaries are quietly doing more damage to the tech ecosystem than most people realize. If you thought Windsurf would cause issues (which it won’t), this will cause way more. We’re in the middle of a wave of SPVs, secondaries, and backdoor deals that are fundamentally distorting how capital flows through the private markets. There are billions of dollars being deployed behind the scenes through WhatsApp chats and emails with LPs and family office groups. The capital is flowing into common shares via second and even third-layer SPVs, often with little transparency and no real governance. This kind of risk is not being clearly communicated. Most of these transactions happen off-market, with limited diligence and almost no rights attached. High net worth individuals and family offices, many of whom are the backbone of early-stage investing, are chasing access, not upside. And what they’re getting is exposure with no control, poor alignment, and disappointing outcomes. Meanwhile, the capital that might have gone to new managers/emerging funds, pre-seed and seed rounds is being pulled into late-stage secondaries. The data backs it up. Fewer companies are raising capital, but the rounds that do happen are larger and skew later. The venture ecosystem is now barbelled. The largest funds are still raising with ease. Institutions and endowments are concentrating their bets. But the early-stage market, the part that funds new ideas, first-time founders, and real innovation, is getting squeezed. Secondaries were meant to provide liquidity. Right now, they’re draining energy from the part of the ecosystem that builds the future. XXXXXX engagements  **Related Topics** [billions](/topic/billions) [windsurf](/topic/windsurf) [if you](/topic/if-you) [Post Link](https://x.com/Trace_Cohen/status/1947852468643307963)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Trace Cohen @Trace_Cohen on x 20.3K followers
Created: 2025-07-23 02:53:12 UTC
Secondaries are quietly doing more damage to the tech ecosystem than most people realize. If you thought Windsurf would cause issues (which it won’t), this will cause way more.
We’re in the middle of a wave of SPVs, secondaries, and backdoor deals that are fundamentally distorting how capital flows through the private markets. There are billions of dollars being deployed behind the scenes through WhatsApp chats and emails with LPs and family office groups. The capital is flowing into common shares via second and even third-layer SPVs, often with little transparency and no real governance.
This kind of risk is not being clearly communicated. Most of these transactions happen off-market, with limited diligence and almost no rights attached. High net worth individuals and family offices, many of whom are the backbone of early-stage investing, are chasing access, not upside. And what they’re getting is exposure with no control, poor alignment, and disappointing outcomes.
Meanwhile, the capital that might have gone to new managers/emerging funds, pre-seed and seed rounds is being pulled into late-stage secondaries. The data backs it up. Fewer companies are raising capital, but the rounds that do happen are larger and skew later.
The venture ecosystem is now barbelled. The largest funds are still raising with ease. Institutions and endowments are concentrating their bets. But the early-stage market, the part that funds new ideas, first-time founders, and real innovation, is getting squeezed.
Secondaries were meant to provide liquidity. Right now, they’re draining energy from the part of the ecosystem that builds the future.
XXXXXX engagements
