In September 2008, two weeks before Lehman Brothers collapsed, Rob Phillpot and I finalised an investment with Francisco Partners.

Aconex was eight years old.

Francisco Partners took a ~$60 million position in the business, and not all of it was fresh equity. Around $25 million was used to buy back shares from the people who had helped build the company over those 8 years, including early backers, employees, and the two of us. It was important to Rob and me that we gave everyone equal access to participate in the secondary.

When a founder sells shares, investors often grimace. Both those already on the cap table and the new ones coming in. It’s read as a negative signal.

After that transaction, for the first time since we’d started the company, I had an answer to a question that sits at the back of every founder’s head: what happens to my family if this all goes to zero? I was able to put a deposit down on a house, as I had been renting until then. I had de-risked major parts of my life. Bizarrely, it was controversial at the time.

The secondary sale allowed our early investors to take some cash out if they wanted, and it also tangibly demonstrated to our team that the stock in the company they were building had real value.

We ran Aconex for almost another decade: through the financial crisis, a bruising IPO process in 2014 (when public markets struggled to understand a growing but unprofitable SaaS business), and a major European acquisition, until Oracle bought the company for $1.6 billion in 2018.

I think we proved we didn’t lose our hunger. We didn’t coast.

Instead, that 2008 secondary sale gave us the chance to swing big in the decade that followed. The money mattered less than what it removed. For the next ten years, decisions stopped being filtered through fear.

After exiting Aconex, I built SecondQuarter Ventures to help other startups facilitate secondary sales, and now at Glitch Capital, I encourage our founders to make use of secondaries when their business is in a position to do so.

Investors like to say they want founders to be all in and have skin in the game. So when founders sell a portion of their shares, usually as part of a new funding round, some see it as a signal of doubt.

And there is logic to that argument. How can you be selling this growth story to investors on one hand, but taking chips off the table on the other? If you believe in this company and vision, why are you selling?

I understand the instinct. Alignment matters. But the founder and the investor are playing different games.

A venture investor holds a portfolio. If one company goes to zero, it’s protected by the portfolio dynamic where the VC’s model assumes some companies will be big, while others fail. A founder holds a single position, with the overwhelming majority of their net worth in their startup. That same VC needs their portfolio founders to swing for the fences so the portfolio dynamics work.

But it’s a human problem first. That same founder is likely still renting their family home and has been on a decade of below-market salary. They’ve been carrying the stress of this business for years. They’ve sacrificed attending family events, holidays, and sleep. Their spouse has likely taken up slack within the family unit and hasn’t seen any material changes in return for their own sacrifices.

For the founder, it’s a game of endurance.

So don’t be surprised when the founder looks at an acquisition offer differently from the idea of taking on more growth capital and going bigger, which is likely the decision the VC firm wants.

The founder, with everything riding on one outcome, doesn't optimise for winning. They optimise for not losing. They’re more likely to take the early exit. They avoid the bold product bet, or hesitate with an offshore expansion, the acquisition that could double the business or sink it.

Investors say they want founders swinging for the fences, but after eight years of building my first startup, with a long road ahead, the cheapest way for an investor to ensure I was taking some risk on was by letting me take some risk off.

A secondary should remove fear from the founder's decision-making without taking the founder out of the game.

In practice, this means putting founders in positions of courage in their lives. Clearing off the mortgage or close to it, building some savings. Effectively, the knowledge that a zero doesn't mean starting again at nothing in your forties.

For most founders, that's a low-single-digit-millions outcome: life-changing at the personal level. At the Series B or C stage, it usually means selling somewhere in the range of two to five per cent of your equity in the company.

After a sale like that, the founder still has the vast majority of their wealth in the company. Nobody with 90% of their net worth in one asset has stopped caring about it.

One framework I’ve used with founders is the cash utility curve. In my experience, the first slice of liquidity for a founder can change their life and their family’s life in a meaningful way. After this, the returns diminish. Not so much to stop them from building, but the impact of the incremental dollar on their lives diminishes.

Not before the business has earned it, from Seed to Series A. When little has been proven by the business, and the investment is mostly speculation. Every dollar of investor money should be used to build the company.

In some instances, when a company is going gangbusters, we’ve seen early employees and founders take some capital out of the round. I’m okay with this when the company has clearly found product-market fit, and their GTM engine is working, but not when investors are still underwriting the founding team rather than the business you’ve built.

From roughly Series B onwards. Once there's consistent, underwriteable revenue, a repeatable engine, and new investors competing for allocation, a secondary sell-down is easy to structure and fairly normal. Doing it inside a priced round also solves the hardest practical problem: what the shares are worth.

To de-risk, not to upgrade. Paying off the house buys courage. Buying a bigger house means a bigger mortgage. The purpose of the money taken in a secondary round is to lower the stakes of your future company decisions, and it only works if you let it.

Australian companies stay private longer than they used to. If founders, early employees, and angels can only get liquidity at exit, capital and talent stay locked inside ageing cap tables instead of being recycled into the next generation of companies. Every founder who can take early liquidity on the way through is a future angel investor, a future founder, or a repeat investor who can afford to go again.

I sometimes hear the secondary conversation framed as founders versus investors: founders wanting comfort, investors defending alignment. Having now been both, I think that framing is backwards. A sensible secondary is one of the few moves that serves both sides at once.

The founder gets to make future decisions from a de-risked position. The investor gets what they claimed to want all along: someone planning on taking big swings for years, with almost everything they own still riding on the outcome.

We didn't sell shares in 2008 because we doubted Aconex. We sold so we could stop letting doubt run the company. The decade that followed was built by people who could afford to be brave: the crisis, the IPO, the billion-dollar exit.

Pay off the house. Then swing harder.