Section Partners

Section Partners, based in Palo Alto, California, specializes in providing creative financing solutions for stockholders of late-stage, venture-backed companies. Unlike traditional venture capital firms that primarily invest directly into companies for growth capital, Section Partners focuses on secondary transactions, offering liquidity to founders, employees, and early investors. Their unique approach allows these stakeholders to realize value from their equity holdings without necessitating a company sale or a new primary funding round, thereby providing a crucial alternative for wealth creation and financial flexibility in the private market.

The firm's strategy is particularly valuable in an environment where companies remain private for extended periods, delaying traditional exit opportunities. By facilitating the sale of existing shares, Section Partners addresses the liquidity needs of individuals who have significant equity but limited avenues to convert it into cash. This non-dilutive capital solution benefits both the sellers, who gain financial flexibility, and the companies, which can retain key talent and avoid unnecessary dilution from new primary rounds.

Section Partners has demonstrated its capacity to deploy significant capital in this niche market. The firm successfully raised Section Partners Fund I, closing at $100 million in 2017, which allowed them to establish their presence and execute initial transactions. Building on this success, they further expanded their capital base by closing Section Partners Fund II with $150 million in 2021, bringing their total capital under management to $250 million. These funds enable them to conduct multi-million dollar transactions, typically ranging from $5 million to $30 million per deal, catering to a diverse range of liquidity needs within the late-stage private company ecosystem. Their focus remains on providing tailored solutions that align with the specific circumstances of each shareholder.