The average time a tech company stays private has quadrupled to over 12 years, driven by abundant private capital and regulatory changes like the 2012 JOBS Act.
Tender offers (secondaries) have become a primary mechanism for providing employee liquidity and for investors to access elite, capital-efficient companies like SpaceX that no longer need to raise primary funding.
There is a significant and growing convergence between the tech industry and government, driven by geopolitical competition and the need for technological supremacy, as exemplified by the Hill and Valley Forum.
While a "second Cold War" and increased NATO spending create tailwinds for defense tech, the sector is viewed as currently overrated by venture investors, with a likely "winner-take-most" market dynamic.
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Concerns Raised
The defense tech sector is currently overrated and crowded with venture investment.
The venture industry is becoming increasingly consensus-driven, making it harder to find contrarian opportunities.
Global geopolitical volatility creates market dislocations and uncertainty.
Opportunities Identified
Investing in 'generational' private companies through secondary tender offers as they stay private longer.
Capitalizing on the convergence of technology and government, particularly in national security.
Finding value in the expected increase in European domestic defense spending.
Identifying underlooked investment opportunities created by market volatility and shifts.