Jim Jones and Steve Taubman, HighGear Ventures

Jim Jones and Steve Taubman join Alexandra Daly to discuss the secondary venture space amid the COVID-19 pandemic, drawing on their extensive experience to share unique insights into Silicon Valley during previous macroeconomic downturns. Jim’s experience has spanned all phases of venture capital, from seed and early stage investments to later stage and secondaries in venture-backed companies. Jim’s portfolio management includes more than $150 million of primary and secondary capital commitments. Steve Taubman has been an active private equity secondary investor since 1998, purchasing limited partner interests in venture capital and buyout funds, organizing fund restructurings and corporate spinouts and acquiring direct interests in venture-backed companies. Prior to joining HighGear Ventures, Steve was Managing Director with VCFA Group where he was actively involved in originating, evaluating, negotiating and closing new secondary investments for funds having an aggregate of $650 million of capital commitments. What is a secondary? A venture capital secondary represents the purchase of common or preferred shares in venture backed companies or limited partner interests in venture capital funds by a new investor, replacing an existing investor in the company or fund. For sellers, a secondary provides another means to obtain liquidity from an investment absent M&A or an IPO. For the secondary buyer, these purchases offer the opportunity to price investments at a discount to current fair value and offer the promise of a shorter time to liquidity than most investors in the asset class (because the purchases occur later in a company’s lifecycle). Secondary investments may provide the opportunity to achieve strong returns in venture capital but with lower risk.