What do you tell a client sitting on a multi-million-dollar position in a pre-IPO company who needs liquidity today but doesn't want to sell and forfeit the upside? For most wealth advisors, private bankers, and RIAs, the honest answer has been "there isn't a great option." Ian Leisegang, CFA, Managing Partner of 3Spoke Capital, has spent the last 15 years building one with his fellow Managing Partner and Co-Founder Steve Gold.

In this dual-release episode of Asset Backed and ATLalts, Ian walks through the structured secondaries strategy that 3Spoke pioneered — a hybrid solution that sits at the intersection of equity, debt, and alternatives. Rather than buying a shareholder's position outright, 3Spoke advances liquidity against the position and becomes a joint venture partner through the eventual exit, sharing in the upside while taking first-money-out downside protection.

Ian covers:

• His path from South African CPA to Deutsche Bank derivatives to JP Morgan private banking — and the single $2M liquidity problem he couldn't solve for a client that led him and partner Steve to launch 3Spoke
• The mechanics of a structured secondary: how a $100 position becomes a $30–$50 advance with no taxable event, no forfeited upside, and a partnership through to IPO or sale
• Why "growth equity" — the crossover between late-stage venture and early private equity — is the most underserved liquidity zone in the market
• The use cases: common shareholders, option-holders facing expiration, LP fund interests, GP-led secondaries, and GP carried-interest advances
• Portfolio names from 3Spoke's history, including DocuSign, Airbnb, Uber, Canva, Databricks, and eToro
• The "three spokes" origin story: why no structured deal closes without aligning the capital provider, the seller, and the underlying company or GP
• Information asymmetry on pre-IPO platforms and why retail buyers of common stock are routinely paying the wrong price
• The risk framework: targeting companies with $250M–$500M revenue, $1B+ enterprise values, 30–100% growth — and underwriting to 75–95% of investments returning at least 1x with 60–70% downside mitigation
• The problem 3Spoke solves: shareholders, employees, founders, GPs, and LPs who need liquidity from a private position but don't want to forfeit the upside of a sale
• The structure: an advance (typically 30–50% of position value) against the equity, paired with a minority share of the upside through to exit — not a loan, not a buyout
• The "growth equity" sweet spot: late-stage venture meets early private equity — companies with $250M–$500M in revenue and $1B+ enterprise values
• Five use-case categories: common shareholders, preferred shareholders, option-holders facing expiration, LP fund interests, and GP-led secondaries (including carry advances)
• The asset allocation case: structured secondaries offer asymmetric returns — equity-like upside with debt-like first-money-out protection
• The competitive edge: 15 years of structured deal experience, deep cap-table information, and partnership flexibility through to liquidity event

If you advise clients with concentrated pre-IPO positions, sit on an investment committee evaluating secondaries managers, or run a GP that needs to deliver DPI to LPs without exiting a winner, this conversation is for you.

Learn more about 3Spoke Capital by visiting their website at 3spokecapital.com. Listen, subscribe, and access manager profiles at EnduranceX.io

I'd like to welcome all my listeners and guests to another episode of Asset Backed and ATLalts. We're doing a special dual recording today, and my guest is Ian Leisegang, the (Co-Founder) & Managing Partner of 3spoke.

We're going to talk about growth, equity, late-stage venture, investing in a very unique and novel approach that 3 spoke takes to this asset class in the space.

And I think advisors and family offices and other investors that are listening in will be, will be treated by Ian to a real masterclass in this space. So with that, Ian, welcome to the ATLalts and Asset Backed podcast.

Yeah Andres, appreciate the introduction, happy to be here, trusting that the conversation will be of some value to to your listeners and excited to share what I can in terms of our perspective on the subsect of the market that we participate in and you know, help hopefully helpful and answer any questions or specific questions that you have.

Yeah, I think it's going to be a real treat. I've, I've spent some time preparing over the last few weeks. Why don't you start by giving us some background about 3Spoke?

Obviously it'd be great to, to learn a little bit more about your professional background to get started.

Yeah, happy to.

So we tend to have about 10 to 14, 15 years of experience in this specific sector and we would argue that we probably the pioneers in this space and so we've seen it through multiple cycles and it's only accelerating in terms of what we're seeing today. So we'll talk a little bit more about that. How did I get here? My background is the accent is as I've shared before, it's not east Coast.

This is not a Boston accent. I grew up in South Africa and so I spent most of my childhood there and I ended up going to college. I studied accounting and business.

I finished sort of as a CPA after being at Eynster Young. In those days we did three years of auditing, doing auditing across mostly private and public companies across industry sectors.

Decided that while that's a great profession, it wasn't what I wanted.

I wanted to spend my time doing and I'd never traveled internationally and so decided that it was my opportunity to travel and I decided to go to London.

And in London I spent about two years, fortunately on the derivative desks of some of the largest investment banks in the world that that people would be familiar with. So I spent some time at CIBC and Merrill and you know, sort of Credit Suisse I think I mentioned.

And as we all know, it was Y2K for anybody who's old enough to remember that. And at the same time the derivatives markets were starting to explode and there was a lot of sort of uncharted territory.

So it was a very, very interesting time. At the same time it was the tech bubble. And I've always had some kind of entrepreneurial spirit.

And I had sort of a mate of mine who we always talked about starting a business. And so I decided it was an opportune time to go back to South Africa and angel fund a business. And so I started from scratch a business.

We angel funded it and ended up running it for about six to eight years before I exited that business and ended up at Deutsche bank in the derivatives market and helping to grow the derivatives business at Deutsche bank in South Africa. And we did a lot of different things there. We did ETFs, we did a lot of structured products, we launched and market made vanilla and exotic options.

So it was a very interesting time and exciting for me. And then after about two years there, we decided as a family, my wife and I, that we wanted to move for various reasons.

We love South Africa, it's a fantastic place.

But there were a couple of things that from a family perspective, we decided that we wanted to move and we chose the US and we specifically chose San Diego and then had to figure out a way to get here as well as to be able to support the family. And that sort of ended up in me transitioning into the private bank and ended up in Orange county in Southern California.

And I've been there ever since from a sort of logistics perspective. And then I was there for a number of years and transitioned to JP Morgan.

And at that time, after sort of that was about eight years stint, I met my partner now too, Steve. And this was the beginning of 3Spoke. And the beginning of 3Spoke is Steve and I did a deal together.

And I was in the private banking world covering Some of the wealthiest families in the TMT or technology, media and telecom sectors in Southern California, southwest region of the U.S. and there was somebody looking for liquidity. They had a lot of stock. We were running a dual track IPO and strategic sale for the business. But he needed some liquidity prior to that event.

And we were trying to find a solution. Nobody existed. It couldn't be done.

It was just mind blowing for me that this business that was going to go public where we couldn't find a solution for $2 million of liquidity for a six month period. And we did the deal. Steve and I did it together. It was out of the first fund, second fund of, of, of what 3 spoke is today.

And it was a fantastic deal. It worked fantastically for the, for the, for, for my clients at the time. He got his something solved and it was a great result for Fund two.

And we can talk more specifically about that. But that was the start of 3Spoke. So that's the background.

Let me just pause there, see if there's anything else there and then we can talk a little bit about the evolution of Free Spoke, if you like.

Yeah, well, I mean it's not a bad place to land in the US if you set up shop in San Diego and then you migrate to Orange County. So I can imagine why you and your family might not want to leave that part of the country. Having family there as well. It's a, it's a beautiful place.

No, that's a great background. It's a, it's a great backstory. I mean, one of the things we, we love about doing this for our guests is to get the backstory right.

For a lot of times an asset management organization, people think it's just numbers and they think that the numbers, you know, produce, you know, money and results and, and returns and, and at the end of the day, it's people that drive the business and its relationships that power our industry as much as technology and AI and all these other things that, you know, make things make maybe more efficient. It is still a people and relationship and as we say, sort of, you know, human capital. So really cool that you and Steve connected.

It sounds like you were the private banker advising a client that had a need for liquidity. And Steve being, you know, one of the pioneers, as you mentioned, which you're now part of 3Spoke. Right.

Moving to the GP or asset management side of the business.

You guys really were early in, in creating a solution which we definitely want to dive into because we have a lot of private bankers and RIAs and people in private wealth, they might be listening to our show and thinking, oh great, another GP that's going to talk about this really wonderful asset class.

I think we have an opportunity to really actually empower them with something different, which is not only learn about an asset class, you know, in this case, structured secondaries, late stage venture, growth equity, but also adding a tool to the toolkit if you're in private wealth and you have clients that have concentrated positions of, you know, maybe illiquid shares. So we're going to dive into that.

What I'd love to do is, you know, allow you to sort of frame up, you know, where 3Spoke, where you all compete and I'm going to read a little bit of what you provided to me and then I'm going to let you maybe just take it to the second and third degree.

So 3Spoke, as you wrote, provides an alternative to a direct secondary sale of late stage venture assets across employees and venture backed firms, as well as entire portfolio of interests with limited and general partners.

Now, I don't know about you, but our audience is again, it's a lot of sophisticated folks, a lot of people in the institutional but also the private wealth space. When I hear secondaries and I hear late stage venture and I hear venture backed firms, these are things I think we can get our arms around.

But what you guys are doing is something that's a little bit different, a little bit unique and you're calling it structured secondaries for these late stage venture and growth equity companies. So maybe you could unpack what that is.

Sure, yeah, it's definitely a word salad as we try and succinctly touch on all the different aspects to where we're trying to focus in the market. So let me take two tacks. One, which is just sort of in the broader industry sector where we play.

And then we can talk specifically about our use case and where we actually, you know, sort of who our counterparties are and what, what problem are we trying to solve so we can spend a little bit of time on that.

Because that, that's ultimately what I think is what's important for the private bankers is that when I came to this business, I think most entrepreneurs, maybe not the only reason, but the best businesses are ones that solve a problem. And if you can solve somebody's problem, they probably will pay you some money to do it. And, and that's what we were trying to do.

We were trying to solve a problem that didn't have a solution.

And so we'll talk More about that in terms of how we did that, but just in terms of sort of top down, as you mentioned, the audience is probably familiar. So there's, if we think about asset classes, there is, broadly speaking, equity debt and maybe alternatives.

And we tend to focus our interest in the equity space and the alternative space, although the way we structure it, which we'll get to, actually has features of debt. And so this is one of the biggest problems we've had is that our business is actually a hybrid. It actually crosses equity debt and alts.

And one of the hardest things that we've had is growing our business, which is we have to grow a business as much as any other entrepreneur is actually explaining this and get this into the asset allocations in large institutional asset managers and RIAs like registered investment advisors, because they all want to put it in a bucket because they've got an asset allocation. And this is the hardest part for us is that we actually cross over most of these.

But if you had to narrow it down, most of the risk is probably equity like risk, which we'll get into. And so equity, and it's private risk.

So once you get into equity land, you know, you generally think about markets as public markets, where there's an active market and then private markets. Well, we tend to operate in the private markets.

And when you think about private markets and you think about equity, you think about these businesses that we're investing in. You know, you tend to think about businesses in two broad buckets, right?

You think of them as profitable or not profitable or cash flow positive or not cash flow positive. You know, the ones that are not cash flow positive generally fit into what we would call venture. Right, Venture.

There's obviously early stage and late stage venture, which we'll talk about. And then you get into sort of more private equity, right, which is things that are cash flow positive or profitable.

So from our perspective, we actually think about where we focus in late stage venture and early stage private equity.

So we define this category as sort of growth equity because it's these businesses that are, you know, you can't really price them off EBITDA yet because they haven't generated it yet, or profitability, but they, they still may be burning a lot of money. They're burning cash.

But this is because there's a massive market opportunity and it makes more sense for them to spend dollars to own market share than it does to just try and generate a profit, right. And lose out on the opportunity set.

So this is broadly where we spend our time is in this Growth equity, crossover between late stage venture and early stage private equity. So that's where we spend our time. And then as you think about that sector and taking the reason we like that sector, which is a.

Maybe I'll pause it, I'll talk about that later in terms of an asset allocation and why you would want invest in that sector. But just let's keep it high level for now, which is. And then, and then we focus on what we would call secondaries. Right?

And secondaries haven't always been that well received by the market. It's been exciting for us as being one of the market participants in growing acceptance of the secondaries market.

And its use case was again a longer conversation.

But there are direct investments, so the institutional investors that invest directly in series A rounds or B rounds or C rounds, et cetera, and then there are secondaries investors who buy and sell the shares of these investors, the series A be or common shareholders in these companies. Well, we focus primarily on the secondaries world. I would highlight that our business is evolving because we do.

What I will define in a minute, structured liquidity is that it means that we have to be flexible. And so while we do secondaries, we do also do primary round commitments and we will also be a buyer in certain situations as a direct secondary.

So just. We'll talk about that in a minute.

But generally secondaries is our focus and that's where we want to differentiate and that's why investors give us their money. And then the last piece of that at a high level is, is what we define, as you mentioned, structured secondaries.

And so generally speaking, a broad definition of a direct secondary is where there's a buyer and a seller, right?

So somebody comes and says, I've got X number, I've got 100 shares in SpaceX, you know, in whatever business that I'm interested in and, and I want to sell it. And now you and the buyer and the seller have to agree on a price. All right?

And the only way a deal gets done is, is if you both agree on a price, the seller sells and the buyer buys.

Now the seller is out of the company and the buyer owns whatever the risk is on that company going forward, whether that's, you know, it's profit or loss. So this is one option. What we do is something different. We do structured secondaries where the person doesn't sell and we don't buy.

What we do is we agree to provide this person or this institution with liquidity against their position. And so in exchange for this liquidity, we Share in some kind of economics.

Okay, so this is, and I'm going to expand on that because that's the second piece. So first piece you asked me, like when you said what do we actually do at 3Spoke. Well, top down, we operate in this sector, right?

Private markets, inside the private markets. Growth equity. Growth equity. You know, think about, we operate in secondaries, not primaries.

And within the secondaries, then we tend to focus the majority of our deployed capital in structured secondaries, although we do some other things as well. So that's sort of top down. I sort of pause there before I talk about what we actually do on the structured secondary side and see if that made sense.

Yeah, it did. It did.

And, and I think, you know, one of the things about doing these conversations versus I meet so many gps that are asset managers and for those that are out there, I, I, I, I would encourage you to think about the podcast format as an opportunity to tell your story. I know that I let off by saying our business is a people business. It's about relationships.

It's amazing what you can do when you get an opportunity and a platform to really tell your story. And that's one of the reasons why we started this.

It's not for us and what we're doing, it's really for emerging and under the radar and what I believe are niche and specialist alternative asset managers and private markets managers who are doing things that are very, very interesting and can be very, very profitable to ultimately the end client.

Right now, one of the things we're limited with in the podcast because it's not a private, you know, conversation, it's out there, is we can't talk in too much depth about securities and funds and we don't offer investment advice. But we can do, I think is spend 45 minutes talking from the standpoint of an asset class and education and framing up a conversation.

And then we've created a platform, EnduranceX, for people that want to learn more, to dive deeper.

So I want to continue on with what you outlined and I think it's super helpful the way you explained it, Ian, in terms of what problem are you solving?

So you're providing liquidity to ultimately somebody on the other end who likely owns, let's say, shares in one of these, let's say private companies. It's in that side of the, the bucket. It's not a public company, it's a private company. They own shares.

They could be common shares, they could be preferred shares. I can point people to the other podcast you did so that we don't have to go through that.

But the summation is know what you own, know what your rights are with those shares for the sake of time. You're focused on those private companies. And I just want to throw, I would love for you to throw out or maybe offer.

That's an example of a growing pre IPO company.

Maybe you could offer, you know, a couple of other names for our audience in terms of again not necessarily ones you've worked with, but just ones that people would, would recognize and then use that as an example of there's an executive probably working there or there's a venture fund who's owned those shares for a long time and you know, they got to pay for college or they have to fund a code GP investment or they have a liquidity need. But I'd love to hear you explain it rather than our audience. Listen to me because you guys are the experts.

Yeah. So let me provide you a couple of names that the audience would recognize.

And, and so through that span we're we're raising our sort of full fund. We're not going to talk about that, but we through this we've invested in a couple of companies.

So by way of example companies people would know like we've had Docusign, Airbnb, Uber, you know, these are a couple of like some of the legacy, the first really big venture backed, institutional venture backed companies that ultimately went public and that everybody has used probably at least once or at least know somebody who's used their services.

So these are the kind of companies that we've invested in in the past currently in the portfolio or more recently, you know, we, in our portfolio, companies like Canva, which has arguably been one of the biggest and most successful Australian venture backed companies and if not one of the biggest marketings, we have businesses like Databricks in the portfolio for the audience. They are in the private wealth space. They might know the Brokerage platforms that are out there.

So we have an exposure to Etoro, which is a European based brokerage platform.

So our goal here, and the reason I give you a couple of these names that we have exposure to, is our goal is to provide our investors with access to the fastest growing and most successful companies in the world.

And as a general rule, and this is the longer conversation around asset allocation is that we all start to appreciate with the amount of money that's been raised in the private markets. There is some of these companies that used to go public when they needed big dollars in order to scale their business to the next level.

Many of these companies are staying private for much, much longer than ever before and being supported.

And so to the extent that you want to get access as an investor to these companies in your portfolio, if you wait until they go public, you're missing out on probably the fastest and most attractive part of the enterprise value appreciation cycle. And so to the extent that you're a sophisticated investor, you're missing out if you're not accessing this private market space.

The question is how are you going to do it and how are you going to do it in a great risk adjusted return way? So this is a longer conversation, but those are the companies.

Yeah, no, those are great. I mean those, those are great examples. And I, I think as we, you know, continue to filter in right. On these conversations. Right.

There's so much material to, to cover and, and we talked about this in sort of the pre show.

What we want to do is, you know, is, is have this conversation to help, you know, the folks that are in our audience better understand what are the different, what are the different areas in alternatives, you know, that most people are hearing about today? It's probably private credit, right? It, it, four years ago it was venture because everybody, five years ago was venture.

Everybody wanted to get into these hot, you know, pre IPO companies. It was crypto for, you know, for a minute. And that's the nature of the capital markets.

You write that things that were very, very in demand, you know, three or four years ago, it'd be hard to probably get a lot of people interested in a direct lending middle market business that's lending to enterprise software today. I mean it's happening, loans are being made, investments are coming in.

I'm not saying that the whole space is going to go to zero, but that's the nature of it. So secondaries as a, as an asset class has begun to be talked about in the private wealth space.

But when people hear about Secondaries, typically they're hearing about secondaries in the form of a gp, a fund manager that is buying interest in other funds.

And they're, they're, they're, they're, they're, they're compiling a portfolio of whether it's private equity secondaries or it's venture secondaries or it's, you know, private credit secondaries. And there's some very well known, very well regarded secondaries managers out there, they're now creating solutions for the private wealth space.

That's not what you're doing. That's not what you're doing. And so I, I want to give you guys an opportunity AT3 spoke to, to sort of draw the distinction.

Yeah, there's, there's, there's, you know, secondaries that would be through a fund approach and then there's secondaries where you're going more, you know, would you say direct or you're, you're, you're doing a transaction with a potential seller.

So I know that's a long question, but I, I think it's important to help to set it up for the private wealth space, the family office that says, oh, these guys are just another secondaries platform. Because it isn't. And that's one of the reasons why I wanted you to come on the show.

Yeah, yeah. So, so thanks and segue.

Go back to the previous conversation which was I tried to give you sort of a top down and where we fit in and then sort of bottom up in what we actually do and where the value proposition is.

So let's talk about, start by talking about some use cases and then I'll talk about the value proposition to our counterparties, the people looking for liquidity and then to our investors, like the RAs are looking to invest in this asset class. So let me spend a couple minutes on each one of those.

So the use cases are important use cases to your point, we think about it in single asset risk where the underlying risk that we're investing in is one company.

So in my example, let's say like, you know, like databricks as an example or multi asset where there's a portfolio of assets where there's more than one asset, you know, there could be five, there could be 10, 15, it doesn't matter. Multi asset risk. And in each one of these use cases, the solutions are the same.

The people who own these assets, they could go and sell them if they need some liquidity, but if they sell them, the, the biggest cost to them, even if they can agree on a price, they like Is that if that business they think is going to double or triple in value over the next three to five years, they are going to forfeit or all of that upside, they're going to lose out on all of that upside for the trade to get some liquidity today. Now this is a very, very expensive decision, right? It is.

The most expensive decision in addition is when they generally speaking, depends on the user. We're not tax advisors, but generally when you sell something there is a taxable event. And so you think you're going to get.

If you sell it for $100, you think you get $100. Well, you don't. You've got to get the after tax amount so you get less than what you think.

So this creates a very big and important decision for a current owner of an asset to go and make a direct sale. What we do in either of these single asset or multi asset solutions is we provide somebody what looks like a loan.

It is not a loan, it is not structured as a loan, it's equity.

But what we do is we say to them, look, if you have $100 worth of value in this portfolio of assets or in the single company that you own and you want some liquidity rather than, you know, assuming there's a discount that you have to take in the market, depending on whether that's a longer conversation, maybe you can only get 70 or $60.

So instead of getting a hundred on where the value is based on a last round or market reference, maybe you can only sell it for 60 or 70, you've got to pay some brokerage fees, etc, so you're only going to get out maybe $60. Then you've got to pay taxes. So net, net of all of this, you're not coming out with, you know, maybe more than $50 of your $100 value that you have.

Again, every situation different, right? So caveats there.

But our proposal to them is, look, as a general rule, come to us, give us the hundred dollars of what you think is value and we're not going to buy it from you. We're going to provide you an advance against that value today. So maybe we give you $30, maybe we give you $40, maybe we even give you $50.

It depends on the risk in that company or that portfolio. But we're going to give you an advance today when we give you this advance. As a general rule, again, all individuals and transactions are different.

Maybe it's not a taxable event. And so you get all this liquidity today and you can now Go do something with it.

You can go reinvest it, you can pay money for the kids, put it in a trust. You can do whatever you would need to do. Diversify, diversify your risk for your private wealth clients, the RIAs.

One of the biggest things is they telling their clients probably, hey, you've got a massive concentrated position in this company, you should be diversifying and giving us that money to go and put in a diversified portfolio so if something goes wrong, you don't lose it all. Well, maybe that's what you do with the liquidity.

Regardless of what you do with it, we will give you maybe not as much as you could get in a sale, but we're going to give you a significant portion of liquidity that's going to solve your initial liquidity need that you're trying to solve for today, but you didn't have to sell.

And now what happens is we, with our sort of this person looking for liquidity, we now become joint venture partners for want of a better term through to a exit on this company. So let's assume this company is going to go public.

It's a company that's doing well enough, it's big enough for the scale, is big enough, it can go public generally you would be able to then get liquidity in the stock once the lockup comes off and you go public. Right. And you can sell the shares.

Well, we're giving you the liquidity today, but we are going to now joint venture with you all the way through to this liquidity event.

And so now in this interim period, we're going to charge you for this risk that we're taking on the company and for this joint venture relationship we're going to partner with you in the equity value. So we're going to take some participation. We are generally a minority owner of the equity. So the individual is a majority owner.

They get to keep the majority of their shares and the majority of the upside of the shares in some cases or interests in a fund, if that's what they want. And then we might charge them what looks like some kind of what the pick interest, right. Accruing and compounding.

Like there might be some kind of investment return, like time based investment return for the longer that we have it. Sometimes we do that.

There might be some fees and expenses, but net, net we're going to charge them and joint venture with them through liquidity and they then get to participate in the upside of the growth from that additional 2 to 3 to 4x and this then solves the problem. Of them giving up and forfeiting all this upside.

And so as a general rule, the last thing I'll say there for a minute is the counterpart is the people that come to us first going to sell as a general rule are the people that love the asset that they own, love it. They don't want to sell it because they think it's going to double or triple in value in the next five years or so.

But they need liquidity today and if they sell, they forfeit all of that. They come to us because they want a liquidity solution. This is our solution to the market. Don't sell.

Get some liquidity partner and let us share in the equity upside with you.

So that's generally what we do and the value proposition and the last thing I'd say there is the use cases for this are generally people as you mentioned who have common or preferred shares in these companies or they have options who these options need to be exercised or they lose them or there's a tax benefit to doing it today and we provide the strike price and the tax that are due the money for the taxes and the strike. So we do this and then that's in the single asset space and in the multi asset space.

People might have an lp, they might have made a commitment to a fund manager, venture capital fund and they've been in it for 10 years and they want some liquidity.

We'll take the interest in this fund or if they're a general partner and we probably have a little niche in the space, we probably one of the managers out there that provide general partners advances against their carried interest because they don't want to sell because they're managing it on behalf of their investors. But they also have liquidity needs in their personal and in their business. In their business and we provide an advance against the carry.

So we do that for both the general partners.

And then the bigger and more trend is GP led secondaries which is the general partners got a fund and he's trying to, or they are trying to create liquidity for their investors and they can provide either one or many assets in their portfolio and we can provide an advance against those to create some DPI or distributions, you know, to the, the investors in those funds. So this is the use case that, that was a lot. So let me just sort of pause for a minute there. But that, that's generally our value proposition.

Yeah, I mean I, I think it's great.

I, there are a lot of different use cases which is, which is important that you outline them you know, it's so funny because we, we, we, we that have been in the industry long enough, we can probably go back to the period of the GFC and 08 and, and I had the good fortune of starting my career as a banker working in the capital markets for the first five years of my career.

And while some of my friends were off doing the equity and M and A and maybe more on the surface, the more exotic areas or the more interesting areas, I guess as a young analyst or associate doing transactions, I was on the credit side, I was on the debt side.

And I look back on 20 years and I realized just how blessed and fortunate I was to really have a grounding and a foundation in the debt capital markets and realized that credit really makes this thing work, liquidity makes this thing work.

And I can point back to so many conversations that I've had over the 20 years and at the end of the day I guess I just, I don't know if it was good fortune or what, but having an opportunity to meet you guys and a shout out to one of your managing directors, Craig White, for connecting us, who's also based in Atlanta. But one of the things that we talked about is I said Craig, why don't more folks know about this?

Because I could see, you know, why people would want to understand, you know, how they could participate in some of these big well known pre IPO companies.

But you just outlined and just offered a way for private bankers and RIAs who have clients who work at some of these companies or they have GPs who are managing venture funds and they want to raise another fund. You just, you just outlined a tool that some of them may not even be aware that they could be approaching their clients with.

And I can speak from experience and this is why I was so excited to do the show. A partner and I wanted to go out and acquire pre IPO shares in, in a fintech company that is active in the digital asset crypto space.

And it was our view that the shares were underpriced. And this is kind of a setup to a, a question I want to ask you about the ways that people are getting access to the pre, pre IPO space.

So our first thought process was well, can we call the company and can we buy shares from the company? Well the answer was no because there we didn't, we, we owned some shares which my partner had acquired, you know, years ago in the secondary market.

But the company was tendering, doing tenders, they were buying back shares, not offering to sell more shares. Right. So Somewhat of a unique situation. And this happened within the last year.

So we go out to the platforms that are out there and we start looking and immediately a broker calls and says, hey, I can get you shares and this price range, okay?

So then we start thinking, okay, maybe we go raise the capital, we get some other LPs, we put together an SPV and we go through this broker to buy shares. And this is all a new world for us, right?

And we're, we're talking to these different brokers and we're trying to out figure, sort of arrange a price. And then in the middle of it, the company announces another tender offer at a price higher than what we were being quoted by the brokers.

So now we're like, oh no. And I just say that because we ultimately were able to find, and this I think dovetails perfectly into one of your use cases.

We were able to find a venture fund that was a very early investor. They were wanting to provide liquidity to their LPs.

They had been in the name for 10 plus years almost and literally said we, we have to give some capital back. So I know what you're describing is not theoretical. I know that it's a real thing.

And because more and more of these companies are staying private longer and fewer and fewer of them are doing tenders at this point.

If you want to participate in these companies and you want to maintain upside, you know, you have, you have, and you need liquidity right there, there has, there has to be a solution. And it sounds like you guys were a pioneer in developing this market.

That is a backdrop because it sounds like the common denominator is that, that there are counterparties out there in need of liquidity, but they'd prefer to work with you guys so that they can keep their upside. Is that, is that a fair way to think about it?

Exactly, that's it.

That, you know, if you boil it down, the person who's going to use a structured solution and really focus on 3Spoke as a potential liquidity provider are the people that don't want to sell but one money today. That's exactly, that's what it boils down to.

There's a lot of minutiae in terms of trying to get the things executed and managing and the relationship. But you know, generally speaking, that's it. If you don't want to sell but you need liquidity or you sometimes you can't sell.

To your point, like there's a lot of rules.

There's a lot of, you know, private companies, every private company has a shareholders agreement and related documents, and they may or may not allow you to do what you think you should be allowed to do. And so you may not be able to do that. And we offer an alternative to that. And in some cases. So that. That is exactly right.

And for investors, I think the other side, you know, as you said, the other, the other part, there's the reason we call the business 3Spoke. It's a good sort of segue to why everybody says why 3Spoke. Well, it's impossible to find a name for a company today, as you can imagine, right.

So anybody who's trying to start a business and try and find a domain,.

We don't want another one with stone or rock or, you know, sky or anything of that nature. And we've got all the colors covered. So, yeah, you have to get creative.

That's right.

But the reason we ended up on 3Spoke and was because we truly believe that in order to get a deal executed in what we do in the structured space is that there's three primary parties to the transaction. There's three spokes to the wheel, right? The first is us and our investors who have to provide the money and do the underwriting and price it.

The second is our counterparty, the person who owns the equity owner, the owner of this stuff that they want to get liquidity against. And the third is the companies or the general partners, or LPs that currently are responsible for the ownership rights.

And unless you can solve all three components, which is what you were alluding to, is that you need to solve all three of these components, it's not as simple as just having two. And so that is the reason we call the business 3Spoke, because there's three spokes to this wheel in order to get a deal done.

And then to the extent that you have to do something that is a little different rather than just a buy in a cell, it needs to be a bespoke solution, right. It needs to be customized, must be. And that is the reason we ended up with respock, right. For this very reason. And related to that. So just say where.

The other point I was going to make to you is that we talked about it from a counterparty's value proposition. What is the use case who comes to us.

But from an investor's perspective, as you think about being an RIA and you want to put assets into a portfolio, you already made the decision. You wanted access to this company because you believed in the upside. You thought it was underpriced, okay? It doesn't matter.

You wanted access, the question is how do you get it? But if you want to invest in venture, I think everybody generally appreciates it comes with a different risk profile.

And our view around attacking the late stage venture in growth equity market, we wanted access, we wanted to give our investors access, we wanted upside participation in the equity, but we wanted to protect ourselves and our downside.

What we do is the reason we only give a certain number of dollars an advance to the value that we're being given as collateral in this deal is because if the value goes down, then we get first money out and we protect our position, right?

So in our example, if somebody came to us with a hundred dollars and we gave them $30, you know, they all think that it's going to be $300 and we all hopefully think it's 300 and everybody's ecstatic.

But we also have all been around long enough to understand that there will be some companies, and particularly in venture and growth equity that won't be the $100 or the $300, they may be the $30. Right.

And our view is that we, we, from an investor's perspective can protect as much as possible the situation for our investors coming in, getting access to these companies.

So we not only don't start losing money in my example, until we get to the $30 that we advanced because we get first money out, but in addition to that, we actually make a profit for our investors even while the value of the company or the portfolio is going down in value. This is the value proposition of structured secondary.

So as an, as an asset allocator, as a register investment advisor, if you are trying to make an asset allocation decision and you saying, man, like I got to get access to the fastest growing companies in the market, it's not in the public space, I've got to go private. Well, I can go make investments in these, in these fund managers or I can go buy secondaries. Fine, I can buy it.

But now I'm taking all this risk, especially if I'm doing late stage venture.

Why don't I do a structured secondaries and why don't I do it at a portfolio level where I'm partnering with an institutional manager that's doing this programmatically, not just on a case by case, but you can invest and get diversification through our portfolio approach and then our structured solution.

So when you think about it like this, it becomes a huge value proposition and another tool in an asset allocations toolkit to say, hey, I like private credit this is not quite private credit, but it's got some cool features that look like private credit. I definitely need private equity or growth equity.

I kind of like secondaries because of all the value propositions of secondaries, but man, do I like this structured secondaries that gives me even better downside mitigation and then also allows me to participate in the upside.

And this asymmetric return profile, as you think about it, from an asset allocator, as the CIO of a family office or the CIO of, as a registered investment advisor, when you build in your asset allocation, you're trying to build asymmetric sort of risk return, right? You're trying to say, hey, I'm trying to bring down the risk of my portfolio and enhance the return. We believe that this is what this was built on.

This strategy was built on this asset allocation approach and building better risk adjusted returns.

And so, yeah, if you're doing alternatives.

No, I didn't mean to cut you off, Ian, but what, you know, if you're thinking about alternatives holistically, you know, you, you probably need to be thinking about, right, Building a diversified portfolio of alternatives. And that's one of the reasons why we're such big advocates of, of.

You can't think about alternatives as like just having crypto exposure or just having real estate exposure.

Just like if you think about equities, you can't think about equities exposure just owning, you know, the eight or nine names that dominate the S&P 500 and have dominated the S&P 500 earnings for, you know, for the last five to 10 years. Right? You have to be in the private markets.

And then within the private markets, we would argue you need to start to think about diversification within the private markets in a much more nuanced way. And I think that's one of the reasons why we're so excited about the growth of alternatives, the growth of the opportunity to access differentiation.

Right? Because at the end of the day, there are reasons why there probably aren't 100 billion dollar managers active in your space.

It makes it very difficult to deploy that much capital. So, so there's a combination of things that we like about the setup, right?

You're going after a highly inefficient space in some regards in terms of deal flow and access and origination. These are highly negotiated, right? In many respects, transactions, you have to have the right skill set.

Pricing matters, valuation, the ability to price the risk is huge, the ability to set up the instrument. So this isn't child's Play. Right. We can't just go out on a platform and point and click on logos and expect that our clients are going to be happy.

Yeah.

I want you to talk about the critical need in this venture secondaries market. Like what, what gives you guys, and this is one of the questions I, I shared, you know, with you ahead of time.

But what gives you guys, relative to your peers out there, the right to win?

So there's, it's a nuanced answer. Right. And everybody's got perspective. Look, I, I think that there's, there's. Who do we win against? Okay.

So the first thing is, is that if you're talking about the average individual or institution that's going out to the platforms and buying shares at some secondary market better offer, this is great, it gives you access. But the information asymmetry is extensive in these venture and growth equity base. This is not the public markets.

And I would tell you that we know for sure that when we have information because of our relationships with the companies or because of our previous deal flow or whatever it might be, that we have ideally more information in most of our deals than other people. So there's an information asymmetry and this is true particularly for people buying common stock. I could give you countless examples.

I don't want to mention companies, company's names. I don't think that's fair.

Where we see where the bid offer is on a platform that you're talking to on a secondaries platform and then when we price it and we look at what the actual price per share is for that share class on an as liquidated or as converted basis, when you look at what the cap table looks like, there is so much dispersion, you cannot believe that people are actually executing these transactions. Right. So I would say that there is a massive amount of information asymmetry. This is the private world, right.

So you need to have somebody who's one has the time and the inclination to at least do the work, to do as much work as possible to clean up the information asymmetry. At least then you can go into the transaction with your eyes wide open.

This doesn't change the fact that you still have to be a good investor and get lucky in order to back the company that's still going to do well.

But at least make sure that your entry level pricing and the price you're going in at or the effective price you're going in at is actually based on real information.

And so I think that as an institutional investor and because we have been doing this for 10 or 14 years we have a level of information and access to accessed information similar to other institutional, like maybe like direct managers who are active in the space. But it is a massive information asymmetry relative to the person who just goes man, I want to go buy X number of shares because I think it's cool.

How do they know that price is the right price?

Because they're the cap table and dilution on the cap table, particularly in venture land and growth equity land, where you assume there are going to be one, two, multiple rounds of additional financing pricing in the dilution risk. Even our counterparties, we have to debate with them often that they forget about the fact that there's dilution.

They go, yeah, but it's going to double. Yeah, but, but you need to raise another 100 million or another 500 million to execute.

Do you realize that even if, if you execute, if you have to raise that much money, the price per share is going to be lower in the future than it is today and you're going to lose money.

So I think this information asymmetry, we win because we are, we are spending every minute of every day as a team looking at and pricing these things. So there, there's that, that is relative to the average person out there that's trying to get this done.

In terms of our win against other managers, I think that number one we've been doing structured liquidity and I, I would argue that we probably know more or as much as anybody else in the space. So we don't know less.

And we probably have been very, we probably, I would think as the leaders in terms of iterating on the opportunity set and we're very easy to work with. We have good counterparty relationships in terms of coming up because we have this joint venture partnership.

When you do structured, you own these relationships through to the end and so you have to be a good partner.

And I think that our combination of being entrepreneurial in offering these structured solutions, the longevity and our ability to be a good partner because not everything always goes right and be flexible, I think these make us win. And I think that's been validated. When you look at like some.

While we do smaller deals and we've always done smaller deals for the common stockholder, the opportunity set has grown. Right. Like our two data points, not only two deals, but two data points.

We did a $80 million deal, a multi asset deal and a $50 million plus minus deal. So when you're seeing.

And these, when we actually executed these, we solved the problem in both of those two deals that I'm giving example that arguably nobody else wanted to solve because it's time consuming to come up with this thing. So we win because of our interest and our ability based on our internal capabilities.

And we are using and deploying AI internally in our business to be even more efficient in order to be able to come up with a solution quicker in order to solve a solution.

So I think this combination of longevity being in the market, the creativity that we've proven to be able to lead the market in some of these solutions and then in terms of our flexibility and ease of a partnership, I think these make us win. Will we win every deal? No.

We often lose because we're not prepared to pay a price for something where we think the market is overpriced most of the time. That's when we lose deals, is when we are not prepared to stretch for the market.

And we think our investors, sometimes they get frustrated because they think, guys, you may not have had exposure to name we guys, you do not want exposure to that name at that price. You may think you want it, but you don't want it.

Yeah, that's a really key point. I know we are up against it and there's so many topics and so many threads that we could pull on and veins that we could pursue.

But I do want to ask you one last question about risk. We're hearing and seeing headlines and we can't do these conversations in a vacuum.

You can turn on Bloomberg and cnbc and the CEOs and leaders of these alternative asset managers are, you know, they've got to be, you know, making their PR firms a mint right now just because you got to, got to get out in front of it. You got to talk to the market about liquidity and what's going on in private credit.

So we can't have these conversations about alternatives and talk about private wealth and the convergence in a vacuum. And I want to ask you about the notion of venture backed and risk as it relates to private wealth.

When people hear about venture backed and early stage, they think, oh my gosh, these are like pre seed, seed stage companies. They're going to go out of business.

Most venture funds that we hear about, you know, they have 1, 1 winner out of 20 in their business and it more than pays for it. That's not what we're doing.

But I think there is a perception and a misconception about the downside risk of early stage, mostly tech oriented or tech oriented investing. And I guess that's one thing, but there's 800 unicorns out there by your count.

I think in what you shared with me and within the growth equity, late stage venture space, there might be 20 or 30 names that you're actually doing anything in in. So you have downside risk and you have, right, the notion that not every one of these unicorns deserves to be a unicorn.

Not every one of these unicorns is going to be successful in terms of a liquidity event. So downside risk, figuring out which names to be in.

I know it's a lot, but we're out of time and I want you to be able to address, you know, the risk question and I want you to be able to address how you guys go about, you know, pricing the risk and then, you know, selecting and identifying which companies you want to be in.

Yeah, yeah. Pricing the risk is, is a longer probably question that, you know, there's some proprietary information in there and maybe a longer conversation.

But, but in terms of the risk that we take, you're 100% right.

Like so first of all, you know, what kind of companies are we interested in, at least in terms of single asset exposure or core exposure in a multi asset or portfolio deal. And what we're looking for is companies that are generally doing 250 to 500 million in revenue.

So these are not companies that they wondering if they have a customer. Their issue is they definitely have customers and they have solved the problem.

The question is can they go from where they are and can they not burn enough money and can they become profitable and can they go public or get sold at a revaluation? That makes sense. So we're looking at these companies, 250 million to 500 million in revenue, enterprise values, you know, north of a billion dollars.

You know, these are not sort of early stage companies. We're looking for things that are growing 30, 40, 50, 100% year over year.

The only thing is that where the issue is is how much cash do they have and how long is it going to take them at the current cash boom to become profitable and are they moving in that, in that direction. So when people are thinking about the businesses, we are not talking about, you know, small cap, private equity.

We're not talking about businesses in the small cap. It's more like mid cap, mid cap sort of public market risk or in some cases even at the, in the top 20 names in the market.

You may even be talking about large cap risk. Right.

So it's sort of mid cap, large cap, public equity risk that we're focused on but in certain multi asset portfolios, the residual portfolios do look a little bit more like small cap, sort of even in some cases micro cap. But our core risk is in that space. Right. So that's what we're looking to take risk on.

So to your point, it's more, you know, it's, it's not concept risk as the way we define it. We're not taking concept risk, we're taking, we're taking execution or growth execution risk. So that's number one.

Are we going to have loss ratios in our portfolio? Absolutely. And it's market cycle dependent and obviously expertise dependent on and structure dependent. But yes, they are loss ratios.

Are they going to be higher than in private equity? You know, potentially.

But we also think that our return profile that we're underwriting too is much higher in some cases and particularly our time frame frame, you know, so we are very focused on IRRs because we believe if we do a good job, we generate IRS and can give it back to investors. This is also market cycle dependent.

It's been a tough year, not only for everybody, but even for secondaries and even structured secondaries players, we, we've held up pretty well but you know, we get affected like any asset manager joining investor.

So I think that answers the question broadly, you know, I know, you know, we wanted to be sensitive to time but yeah, not, this is not, hey, we, we only have to have 1 out of 100 companies or 3 out of 100 companies that we're investing in. Right.

We're expecting, you know, more than 75 to 80%, if not 90% or 95% of our investments to at least, you know, make a 1x return and, and after that obviously generate significant upside for investors with the downside mitigation that we offer right on the asymmetric return. So generate good upside but have this sort of 60, 70% downside mitigation as a general approach to the deal.

Yeah, I mean, and I think that's a great way to wrap it up because if people do want to learn more. Right. That's one of the reasons why, you know, we wanted to invite you all on to have this conversation.

But you know, there are certain things that we just don't have time to cover. There are certain things that we can't talk about. Right. That's why we have the platform. That's why endurance exists.

But I want to let you have the last word. How can people learn more about 3Spoke Ian and just follow more of the things that you guys are engaged in?

Yeah, all the general things is we have a website. You can get a pretty good sense, a high level sense of what we've invested in, what our portfolio looks like.

So you can get a sense of what we do and how we do it. More frequent updates. We're Fairly active on LinkedIn and sort of updates and what we think is going on in the market.

And so you there and on X we try and post, you know, we're not, we're not active like when we probably should do better as a small team but, but we, we try and keep people up to date with what's going on on both of those platforms and then you know, to the extent that somebody has a specific need, you know, just reach out to us. I think we generally you could, we've got contact forms on our website or most of us are pretty easily accessible.

So you know, just shoot us an email or reach out to us on our website and you know, if you have a specific case, we'd be happy to try and help and so consider if there's a path forward.

That's great. Well, I want to thank you Ian Leisegang, Managing Partner of 3Spoke.

And I want to thank your colleague Craig White, Managing Director, based here in Atlanta for making the introduction. I know you have to run, but thank you for joining me today on this dual and special show at ATLalts and Asset Backed.

Wonderful. I just appreciate the invites to the extent there's an opportunity to chat again. I look forward to it.

But enjoy the rest of the week and thanks again.

We'll leave it there. Thank you Ian.

Okay, thanks.