Secondaries are Essential for the Venture Capital Market

Dave McClure, founder of Practical Venture Capital and co-founder of 500 Startups, dives deep into the growing role of secondaries in venture capital. Dave explains how today’s longer startup cycles and liquidity droughts have created opportunities (and confusion) around secondary markets. He breaks down what secondaries actually are, how Practical VC operates, and key trends shaking up the system. With his trademark candor, Dave also shares hard truths for both founders and VCs navigating this next chapter of private markets.

In this episode, you’ll learn:

[03:55] Dave’s journey to becoming an investor
[06:30] The early evolution of accelerators and why “lots of little bets” took off
[09:50] How cloud, open source, and low CAC changed the startup funding game
[12:49] Why startup liquidity timelines have doubled—and what that means for founders and LPs
[14:56] What secondaries really are (hint: not just one thing)
[19:31] Does venture’s illiquidity attract the right kind of investors—or just the most patient?
[22:06] The discipline of public markets vs. the opacity of private ones
[26:37] What Practical VC looks for in a secondary opportunity (and the $50M–$100M revenue rule)
[29:14] How Dave screens funds and companies for possible exits
[33:37] What’s exciting (and worrying) about secondaries, stablecoins, and emerging markets

The nonprofit organization Dave is passionate about: New Story

About Dave McClure

Dave McClure is the founder of Practical Venture Capital, a firm focused on liquidity through venture secondaries. Previously, he co-founded 500 Startups, one of the world’s most active early-stage venture funds. A PayPal alumni and self-described nerd turned investor, Dave has worked across engineering, marketing, and venture roles, investing in hundreds of startups globally. He’s known for his honest insights and bold bets on opportunities before they’re ‘cool’.

About Practical Venture Capital

Practical Venture Capital is a Silicon Valley-based VC secondary firm providing liquidity to GPs, LPs, and founders through targeted secondary investments. Specializing in fund-level and company-level secondaries, Practical VC aims to shorten the venture capital time horizon by backing mature, revenue-generating companies with clear exit paths. The firm focuses on portfolios nearing liquidity and brings a flexible, creative approach to valuation, pricing, and structure.

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