Practical VC is raising our third secondary fund,
PVC-3: “The Halftime Fund,”
for investors who want to cut their hold time in half.
The PVC-3 Halftime Fund buys discounted access to VC funds and companies with a likely IPO or large exit in 3-5 years. Our “Skip the J-Curve” strategy cuts normal VC fund holding time in half, so distributions happen faster. Secondary funds typically return capital in just a few years, instead of 10+ years for traditional VC funds. For example, our first PVC secondary fund has already returned 0.6X DPI (60% of investor committed capital) in less than 5 years.
Why wait 10-15 years for venture returns, when you can just arrive at the game at halftime and bet on the team that’s already winning?
Legal Disclaimer: The PVC Halftime Fund is available to qualified purchasers. As a 506c fund, public marketing is allowed in our fundraising process, which is why you see this on a public website, even if you don’t buy Versace.
Practical VC Secondary Strategy: “Skip the J-Curve”
Our VC secondary strategy is simple — just wait 5-10 years, then invest in VC funds and companies already doing well.
Most VC investments don’t work — but after 5-7 years, at least a few companies find traction and start making millions. By then they’ve raised a Series B or C round, and are on their way to “unicorn” valuations of $1B or more… but they may still be another 5 years away from an IPO or big exit. For a few VC funds lucky enough to find a big winner, it may take 7-10 years before the fund makes distributions back to investors. This is why VC funds take 10-15 years to really pay off… and some investors may need liquidity before that happens.
Our strategy is to buy secondary in mature companies and funds, when risk is lower and winners are more obvious. We call this Skip the J-Curve — it’s like arriving at the game at halftime and betting on the team that’s ahead.
Better Returns, Faster Liquidity
Secondary funds typically have faster liquidity than traditional VC funds. Our focus is DPI — we aim for distributions to our investors in under 5 years, instead of 7-10 years for traditional VC funds.
Our first fund PVC-1 (2020) has already returned 0.6X DPI (net) in less than 5 years.
PVC Track Record
This ain’t our first rodeo. We have two decades of operational and investing experience working at PayPal, eBay, Founders Fund, Sonos, and 500 Startups. We’ve invested in hundreds of companies resulting in 40+ unicorns and 10+ IPOs, including Canva, Credit Karma, Gitlab, Lyft, Reddit, Sendgrid, Stripe, Talkdesk, Twilio, and Udemy.
In addition to Silicon Valley and the US, we have invested in over 75 countries across Europe, Asia, Africa and Latin America.
VC Secondary Examples
Our secondary investments include both VC-backed companies (“directs“) and VC funds (“strip sales“). We also use “structure” to increase returns and reduce downside risk. For more info check out our VC Secondary 101 presentation.
PVC-3: The Halftime Fund
If you’d like to learn more about VC Secondary, or the PVC-3 Halftime Fund, click on one of the links below to get started. You can also request a meeting with the Practical VC team.
