PERSPECTIVES · PRIVATE-MARKET STRUCTURE

The liquidity regime of the private buildout

Staying private longer moved the need for liquidity onto the cap table. It created a class of sellers whose reasons for selling have nothing to do with the quality of what they hold, and it made a direct relationship with the company the scarcest asset in the market.

Jason Ben Yair · Managing Partner · OCTOBER 2026 · ESSAY

The companies building the physical layer of artificial intelligence, across compute, power, launch and autonomy, are doing their steepest compounding in private. That much is already visible. Abundant late-stage capital has let them raise without listing, and public appetite for capital-intensive, pre-profit businesses has been uneven enough that few management teams feel any urgency to test it.

Most commentary concludes that public investors meet these companies after their best years. For a private-market investor, the more useful question is what long private tenure does to everyone already inside, and what it takes to earn a place alongside them.

Time creates sellers

A company that stays private for well over a decade carries its shareholders’ lives along with it. Employees who joined early hold equity that now makes up most of their net worth, in a single name they cannot sell on a screen. Early funds reach the end of their stated terms holding marks they cannot distribute. Angels need liquidity for ordinary reasons: a house, a tax bill, a new company of their own. Strategic holders rebalance.

Each of these motives is about the holder. That is the structural point. In public markets, a seller is presumed to know or believe something about the business. In late-stage private markets, a large and growing share of sellers are selling because of time: private tenure has outlasted the holding period their circumstances allow.

Long private tenure turns time itself into a source of supply, and the companies decide who receives it.

Why transfers are hard

If motivated holders and interested investors both exist, why does this remain an illiquid market? Because private shares are built to stay put. Most late-stage companies hold a right of first refusal on transfers, require board or company consent, limit transfers to defined windows, and in some cases allow them only through company-run tender programs. Information runs unevenly in every direction. The company knows the most, and a selling holder often knows more than a buyer about the specific share class, its preferences and its history.

These restrictions are sensible from the company’s side. They protect the cap table and the company’s relationships with its existing investors. They also make permission the binding constraint in this market. Capital is abundant and position is scarce. Many investors with money ready to deploy never complete a transaction, because money is the one input everyone brings.

What this regime rewards

Three capabilities matter more today than they did when companies listed earlier.

Direct relationships with companies and their management. Every path into a late-stage company runs through the company. It decides who joins a primary round, who receives an allocation when a round is oversubscribed, and which transfers it approves. Investors whom management already knows, and who arrive as a useful name on the cap table, are the ones invited in. That standing is built over years, through conduct in earlier rounds, discretion, and being a shareholder who makes the company’s life simpler.

Primary access first. A primary allocation puts capital directly into the business, on terms negotiated with the company, with the information and standing that come with it. It is the cleanest way to own these companies, and it is where our work starts. Secondary transfers are one more mechanism by which position changes hands. Their main value is what they reveal: the price at which holders will part with shares, how much demand sits behind a round, and how a company manages its own cap table. We read them as a market signal and treat them as plumbing.

Structure that keeps the cap table clean. Companies want a small number of well-understood holders. Investors want clear exposure to a single company. Dedicated single-asset vehicles are one common way to serve both, provided they stay simple enough that the company never has to think about them again.

What we believe, and what would prove us wrong

Our view is that the private buildout will keep producing structural sellers for as long as its leading companies stay private, and that the companies themselves will keep deciding who takes the other side. If that is right, the investors best placed in this market are the ones management already trusts: first in line for primary allocations, and readily approved when position changes hands.

Two developments would weaken this view. A sustained reopening of the IPO window for capital-intensive companies would shorten private tenure and move this liquidity into public markets. And the spread of company-run tender programs could absorb much of the demand for liquidity inside processes the company controls, which would make secondary pricing a thinner and less informative signal. We watch both closely.

Information about these companies is widely available. Position in them is scarce, and it begins with a company’s willingness to have you on its cap table.