Down, Down, Deeper and Down

Keith Teare
14 min readJul 21, 2022

That Was The Week #319


Essays of the Week

  • Down Markets and Liquidity
  • Secondary Markets to grow
  • Private Equity as Acquiror
  • Unicorn Valuations
  • Bid/Ask Spread in Venture
  • A16z closes HQ
  • AI-Powered Organizations
  • Brad Feld on Matt Levine

News Week

  • FirstMark raises $1 billion in new funds
  • Amazon Buys One Medical
  • Tesla Sells Bitcoin
  • Stripe Lowers Valuation

Startup of the Week

  • Crunchbase

Tweet of the Week

  • Long Hot Indian Summers


In a week that saw public markets largely up, my reading was dominated by those looking at private company stocks and pontificating on the downside. It is a commonly repeated mantra that private markets lag public market corrections.

Jason Lemkin writes about liquidity. This is a much under-appreciated concept in venture. Most funds report TVPI (total value to paid-in capital), which measures the value of their portfolio compared to how much they have invested. It is mostly made up of reported private valuations, so in layman’s terms is “paper value.” DPI (distributions to paid-in capital) measures actual cash generated. This is almost always under 1 in the early days of a fund as exits that can return a fund are rare and usually happen several years into a fund. Liquidity for venture funds is driven by three things — companies sell out to a buyer, companies IPO or the fund sells its positions to a secondary buyer. For the most part, the first two dominate. But there is a growing occurrence of the third.

But to be honest, it makes little sense for a venture investor at the early stages to focus on liquidity. And if liquidity slows down, that will make very little difference to the outcomes unless it persists for 5 years or more. As Amazon’s purchase of One Medical indicates, exits may even become more likely in a public market correction. And Tomasz Tunguz has two…

Keith Teare

Founder at SignalRank Corporation. Publisher of That Was The Week, Founder at