@jaykreps Jay, you are absolutely correct in theory. Liquidity has value and should be valued at a premium vs. illiquidity. But liquid assets are also volatile and modern finance defines risk as volatility. So many investors/allocators prefer the optically smooth return streams of PE/VC

@jaykreps Said another way, no return stream from liquid, volatile assets can compete with the “Sharpe ratio” of a return stream from illiquid assets where the marks are controlled by the PE/VC firms generating the returns. They generally grade their own homework.

@jaykreps And for whatever reason, many LPs and allocators prefer this. They all understand the silliness of illiquid assets that were marked flat to up in 2022, but still prefer this to public markets down 20-40% last year.

@jaykreps It is what it is and this preference (itself an fx of defining risk as volatility) is what created the illiquidity premium that persisted for the past 10 years.

@jaykreps So my friend, you have left the land of the lotus-eaters but I will say that the cold, harsh realities of public markets are more conducive to building truly great, enduring companies which I know is your goal. Good luck!