Dave Thornton

Leader of Vested, a firm using machine learning to finance employee stock options in private companies.

Claims

As speaker

Mentioned in

Key positions and views

A massive, untapped market opportunity ($200-$300B) exists in financing stock options for rank-and-file employees who are systematically ignored by traditional financial institutions.

Proprietary data and machine learning models are superior to traditional methods for selecting top-performing private companies and accurately pricing their illiquid common stock.

Key employee flow events, such as a first CFO hire or a quiet layoff, are powerful and differentiated data signals that can predict a private company's future trajectory.

A highly diversified, index-like approach to venture investing, focused on the algorithmically-selected top quintile of companies, can generate superior risk-adjusted returns.

The greatest long-term competitive threat to Vested's model is not from existing niche players but from the eventual entry of large, well-funded asset management firms.

Podcast consensus on Thornton

Points of consensus

▶Dave Thornton consistently argues that Vested's primary competitive advantage is its proprietary data and machine learning models, which are used for both selecting top-tier private companies and pricing their illiquid stock.Apr 2026

▶Thornton identifies a massive and underserved market opportunity, estimating that 70% of employee stock options (worth $200-$300 billion over a cycle) are abandoned, particularly by rank-and-file employees needing smaller amounts of capital.Apr 2026

▶He asserts that Vested's selection model, based on differentiated data like key employee flow, can reliably identify the top 20% of venture-backed startups, which is the core of the firm's investment thesis.Apr 2026

▶Thornton provides evidence of the model's operational success, citing a 100% delivery rate on share transfers across more than 60 liquidity events.Apr 2026

Points of debate

▶While confident in Vested's current moat, Thornton acknowledges a significant future threat, speculating that the biggest risk is the eventual entry of well-funded asset management firms into the space.Apr 2026

▶Thornton's long-term vision to make secondary markets more efficient is presented as a speculative goal, contingent on leveraging a proprietary data set that is still being built.Apr 2026

▶He notes a limitation in Vested's current deal flow, seeing fewer opportunities from very late-stage companies like Stripe or SpaceX, which often have their own established secondary markets or tender offers.Apr 2026

▶Thornton highlights the tension between the technical success of his past pricing models (one being used for algorithmic trading at a major bank) and the business fragility of the venture (previous deals were cancelled due to external M&A activity).Apr 2026

Key themes

▶Proprietary AI and Data as a Competitive MoatApr 2026

Thornton posits that Vested's core defensibility lies in its proprietary technology. This includes a machine learning model for pricing private company stock, a selection model that interprets employee flow as signals, and the use of LLMs to extract data from thousands of LinkedIn conversations.

This positions Vested less as a traditional financial services firm and more as a quantitative, data-driven asset manager applying algorithmic strategies to the inefficient venture capital asset class.

▶Unlocking the 'Long Tail' of Employee EquityApr 2026

A central theme is the focus on a massive, underserved market: rank-and-file startup employees needing relatively small amounts of capital (e.g., $50,000) to exercise options. Thornton contrasts this with large banks that cater only to senior executives from late-stage companies needing millions.

Targeting this high-volume, low-ticket-size market necessitates the automation and scalability provided by Vested's technology, as traditional, high-touch financial models would be unprofitable.

▶Systematizing Venture Capital via DiversificationApr 2026

Thornton advocates for a risk-managed approach to venture investing that diverges from concentrated bets. Vested's strategy involves building highly diversified portfolios, with funds aiming for up to 1,000 positions across 600-700 companies, all selected by its quantitative model.

This strategy attempts to capture the returns of the top quintile of the venture asset class while mitigating idiosyncratic risk, effectively creating a systematic, index-like product for private markets.

▶The Inefficiency of Private Secondary MarketsApr 2026

Thornton frames Vested's entire existence as a solution to the anemic and inefficient secondary markets for private shares. He points to the $200-$300 billion in abandoned options as the primary symptom of this market failure, and his long-term vision is to use Vested's data to help solve it.

The ultimate goal appears to be building a unique data asset on private company performance and valuation that could become more valuable than the financing business itself, potentially enabling new market infrastructure or index products.

Source episodes

Timeline

Pre-Vested

Developed an illiquid asset pricing model at Skilling Games. A subsequent version of this model was rebuilt and used by a major bank for algorithmic trading, though separate deals with pricing companies IDC and JJ Kenney were cancelled due to M&A by Intercontinental Exchange.

2020-2021

During the venture funding boom, Vested adopted a cautious investment stance, avoiding late-stage companies with high valuations from investors like SoftBank and Tiger Global, citing risks from large liquidation preference stacks.

Present Day

Vested actively employs an automated deal sourcing strategy using LinkedIn to contact departing employees from desirable companies. The firm uses LLMs to process communication data and has achieved a 100% success rate on share delivery after more than 60 liquidity events.

Near Future

Thornton announces the launch of a new tool, the 'Vestimate,' to estimate the fair market value of private company stock. The firm also plans to significantly scale its funds to hold nearly 1,000 positions across 600-700 companies.

Long-Term

Thornton articulates a long-term, speculative vision for Vested to leverage its growing proprietary data set to bring greater efficiency and liquidity to the historically anemic secondary markets for private shares.

Suggested prompts

How does Vested's automated, data-driven selection model mitigate the adverse selection problem common in secondary markets for private stock? &nearr;What are the primary legal and operational risks associated with Vested's model of financing employee stock options and ensuring share delivery upon a liquidity event? &nearr;Given the reliance on LinkedIn data for deal sourcing and signals, how vulnerable is Vested's model to changes in LinkedIn's API access, terms of service, or user behavior? &nearr;How might the entry of large asset managers like BlackRock into private market indexing, as Thornton predicts, impact Vested's long-term strategy to improve secondary market efficiency? &nearr;

Key concepts

Proprietary Technology & AI 1 ep Company Selection Model 1 ep Vested's Business Model 1 ep Market Opportunity & Size 1 ep Competitive Landscape 1 ep Portfolio Strategy & Diversification 1 ep Deal Sourcing 1 ep Risk Management 1 ep Track Record & Performance 1 ep

Notable quotes

“At the moment, around 70% of employees abandon their stock options... All the U.S. headquartered venture-backed startups might be worth a couple trillion dollars right now, which is to say that $200 to $300 billion is what's on the table over the course of a market cycle to be abandoned, and 70% of it goes abandoned.”

Dave Thornton · Dave Thornton - Unlocking Venture Access Through Stock Options at Vested (EP.469)

“We have had thus far a 100% delivery rate on enough liquidity events that the sample size is, you can trust the number. We're over 60 and change liquidity events that we've collected on with no hair whatsoever, inclusive of reasonably large ones.”

Dave Thornton · Dave Thornton - Unlocking Venture Access Through Stock Options at Vested (EP.469)

“Once we had the ability to effectively point at the top 20% of VC-backed startups, buying into that portion of the asset class at discounts becomes a really compelling product.”

Dave Thornton · Dave Thornton - Unlocking Venture Access Through Stock Options at Vested (EP.469)

“Vested identified its target market as the long tail of rank-and-file startup employees needing smaller amounts of capital, such as $50,000, who were ignored by larger financial institutions.”

Dave Thornton · Dave Thornton - Unlocking Venture Access Through Stock Options at Vested (EP.469)

Report last updated: Apr 21, 2026

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