Founder & early investor secondary capital

Sourcing founder secondary capital or liquidity for early investors in Australian and NZ tech companies is difficult.

While there are some good dedicated secondary funds in Australia, such as SecondQuarter, most venture investors are constrained by their structures, which limit the amount of non-primary investing they can do. And the prevailing preference for most investors is for any money invested into a company to go into building the business, as opposed to rewarding early equity holders.

Shearwater Capital sees things a little differently. Most of the team have been founders ourselves and we deeply understand how important it can be to get a little money off the table at various stages of the journey. We respect the importance of supporting those who supported you when it really mattered by providing early backers or staff on ESOP with a realisation of some of their paper gains. And often companies don’t need to raise new capital, but founders or early investors would welcome some liquidity to buy a house or create a save-point. This is especially so for the very best companies who may never have raised in the first point.

We’ve always been comfortable looking at secondary purchases. In fact, we’ve purchased secondary shares in a significant proportion of our portfolio.

So if you’re a founder or an early investor of a high quality Australian or NZ technology company and secondary liquidity is something you’re interested in exploring, please feel free to confidentially reach out to us.