ValuationsMarks, multiples & secondaries
Contrary's Kyle Harrison Argues Venture Valuations Should Be Made Public, Citing Kerala Fish-Market Study
Contrary GP Kyle Harrison argues that a startup's price can rest on one term sheet or on GPs agreeing with each other. He uses Jensen's Kerala fish-market study to argue that disclosing private valuations would improve price discovery.
From the Investing 101 article of November 11, 2026 and cited sources: Harrison's core mechanism: a single willing counterparty can set a startup's price, and the comparables used to check it are themselves private. [1]
SOURCES[1] 009: Marks, Not Markets investing101.substack.com
AT Pulse research deskPublished · Updated · 4 min read · AI-assisted analysisAI-assisted, not human-edited. Methodology Corrections Who owns this site
- What happened
- Harrison's core mechanism: a single willing counterparty can set a startup's price, and the comparables used to check it are themselves private. [1]
- Original source
- Investing 101 article, independent perspective
- Brief by
- AT Pulse research desk AI-assisted; publisher and contact on the desk page
- When
- November 11, 2026 article published
- Covered
- Nov 13 edition
- Evidence
- 12 sources across 11 sites
- 1009: Marks, Not Marketsinvesting101.substack.com
- 2The Venture Market Is Not Recovering. It Is Reorganizing.…foley.com
- 3Jensen, The Digital Provide — RePEc/QJEideas.repec.org
- 4CORE Econ: Information about pricesbooks.core-econ.org
- 5When Is a "Mark" Not a Mark? — a16za16z.com
- 6Venture Just Set a Record and Paid Out Less… — Capitalycapitaly.substack.com
QuietHow it’s measured
Substack · 3 likes
Reach blends public engagement (views, likes, comments, shares, stars) from the platforms where the story or its original source lives: YouTube, Hacker News, GitHub, Substack and similar. A video and the article written from its transcript share one score, taken from the video. Platforms with no data are left out rather than counted as zero, and the age of a story never lowers its score.
Harrison's core mechanism: a single willing counterparty can set a startup's price, and the comparables used to check it are themselves private. He says that when auditors pressed for valuations after 2022, GPs responded by agreeing marks with each other. The result is marks-by-committee, with errors that move together rather than independent estimates. [1]
PitchBook figures show paper gains outrunning cash. Over the past year, fund asset values rose 21.6%, while distributions ran at 11.7–12.8% of asset value against an 18.7% long-run average. One-year venture returns of 17.1% were mostly unrealized. [2] [6]
Jensen's 2007 QJE paper found that mobile phones along Kerala's coast sharply cut fish-price gaps across beach markets and ended wasted catch. Harrison uses this to argue that open price information improves markets. Fish are uniform and traded daily, while startup equity is unique, illiquid and shaped by preference terms. Better disclosure may narrow price spreads without producing one price. [1] [3] [4]
The critique has precedent. In 2016, a16z's Scott Kupor showed that last-round, comparables (with a 20–30% marketability discount) and option-pricing methods can value the same company very differently. He concluded that only realized, distributed returns measure fund quality. [5]
industry data shows asset values growing faster than cash returned to LPs. Implication: if marks rest on thin or peer-agreed pricing, TVPI may overstate performance. That favors weighting DPI and using documented, independent valuation methods.
Executive brief
Kyle Harrison's Networked Conviction 009 (Nov 11, 2026) makes one central point: a startup's price can rest on a single term sheet. When auditors pushed for valuations after 2022, he says the answer was for GPs to agree with each other. He uses Robert Jensen's well-known Kerala fish-market paper to argue for making private valuations public. Recent PitchBook data supports the "marks, not money" problem. Over the past year, fund asset values rose 21.6% while cash distributions ran at 11.7–12.8% of asset value, against an 18.7% long-run average. The piece is commentary. It announces no funding round, valuation or investor.
What changed and event timeline
Phones reach Kerala's fishing fleet
Mobile service spread along the Kerala coast. Fishermen and wholesalers who adopted phones saw price dispersion fall sharply, wasted catch disappear and prices follow the Law of One Price ().
Jensen publishes "The Digital Provide."
The Quarterly Journal of Economics paper became a standard citation on information and markets. Across 15 beach markets, price gaps reportedly shrank to about a quarter of earlier levels ().
a16z on the meaning of marks
Scott Kupor showed that last-round, comparables and option-pricing methods can give very different values for the same company. He argued that only realized, distributed returns matter ().
PitchBook Q2 data shows the gap
One-year venture returns were 17.1%, mostly on paper, while distributions stayed well below their historical rate (;).
Harrison's "Marks, Not Markets."
He argues that opacity protects founders, GPs and LPs individually but weakens price discovery across the market ().
Capabilities and access
- No model, product or financing is announced. The piece is opinion.
- Only the first section is free.
- Author: Kyle Harrison, listed as a General Partner at Contrary (NFX Signal). As a venture investor, he holds marks of his own.
Read the full section
- No model, product or financing is announced. The piece is opinion.
- Only the first section is free. The Request for Startup ("knowing what you own"), the wiki notes and the "Unholy Trinity" retrospective are for paid subscribers (Investing 101).
- Author: Kyle Harrison, listed as a General Partner at Contrary (NFX Signal). As a venture investor, he holds marks of his own.
Technical analysis for researchers and developers
- How marks are set: Kupor describes three methods: last-round waterfall, comparables with a 20–30% discount for lack of marketability, and option-pricing models.
- Harrison's mechanism: A single willing counterparty sets the price, and the comparables are themselves private.
- Measurement: NAV growth vs. DPI-style distribution rates is the gap to track.
Read the full section
- How marks are set: Kupor describes three methods: last-round waterfall, comparables with a 20–30% discount for lack of marketability, and option-pricing models. Each rests on judgment calls (a16z).
- Harrison's mechanism: A single willing counterparty sets the price, and the comparables are themselves private. That produces "marks-by-committee," with errors that move together rather than independent estimates.
- Measurement: NAV growth vs. DPI-style distribution rates is the gap to track. Ken Rutkowski describes a hypothetical fund reporting a 2.4x multiple while returning 8¢ per dollar (The Most Important News).
Claims and evidence
- Jensen's findings: Peer-reviewed and widely cited (RePEc; Stanford copy).
- Clarkson's quote that auditors told GPs to "talk to each other": Harrison relays it second-hand through Dan Gray of Equidam.
- Eric Fitzgerald's "marks, not distributions": Fitzgerald is listed at Top Tier Capital Partners. The exact phrase was not found in an independent source.
Read the full section
- Jensen's findings: Peer-reviewed and widely cited (RePEc; Stanford copy).
- Clarkson's quote that auditors told GPs to "talk to each other": Harrison relays it second-hand through Dan Gray of Equidam. No original recording or transcript was found, so it is uncorroborated.
- Eric Fitzgerald's "marks, not distributions": Fitzgerald is listed at Top Tier Capital Partners. The exact phrase was not found in an independent source.
- The paper-vs-cash gap: Backed by PitchBook figures as reported by Foley and Capitaly.
Context and prior work
- Kupor (2016) already argued that unrealized marks say little about fund quality (a16z).
- 2026 structure: $1B+ funds took 68.3% of H1 capital (up from 36.1%). The step-up at exit fell to 15.5% from 62.8% in 2021.
- Valuation vendors such as Equidam market auditor-checkable fund valuations.
Read the full section
- Kupor (2016) already argued that unrealized marks say little about fund quality (a16z).
- 2026 structure: $1B+ funds took 68.3% of H1 capital (up from 36.1%). The step-up at exit fell to 15.5% from 62.8% in 2021. Secondary trading runs at about $100B a year (Foley).
- Valuation vendors such as Equidam market auditor-checkable fund valuations.
Limitations, safety and contested findings
- The analogy has limits: Kerala fish are a uniform, perishable good sold daily across many markets.
- Secondary-market prices: Harrison himself concedes they rarely reflect actual value and act mainly as demand signals.
- No mechanism yet: The proposal sets out no disclosure standard, regulator or enforcement method.
Read the full section
- The analogy has limits: Kerala fish are a uniform, perishable good sold daily across many markets. Startup equity is unique, illiquid and full of preference terms. More information may narrow the spread of quoted prices without producing a single "one price."
- Secondary-market prices: Harrison himself concedes they rarely reflect actual value and act mainly as demand signals.
- No mechanism yet: The proposal sets out no disclosure standard, regulator or enforcement method.
- Disputed figure: Capitaly and Foley cite the same PitchBook numbers, so they are not independent confirmation of each other. Capitaly's $412.7B for H1 US startup capital also conflicts with the $74.8B fund-raising figure unless the two measure different things.
Business and practitioner implications
- LPs: Weight DPI over TVPI, especially for funds holding AI megadeal markups.
- Founders: Opacity shields headline prices but hides liquidation-preference risk, as waterfall terms now drive deal negotiations.
- Builders: Harrison's paywalled "knowing what you own" request points to demand for portfolio-valuation and cap-table transparency tools.
Read the full section
- LPs: Weight DPI over TVPI, especially for funds holding AI megadeal markups.
- Founders: Opacity shields headline prices but hides liquidation-preference risk, as waterfall terms now drive deal negotiations.
- Builders: Harrison's paywalled "knowing what you own" request points to demand for portfolio-valuation and cap-table transparency tools.
- Auditors and GPs: Agreeing marks with peers spreads shared errors. Independent methods that document their inputs are easier to defend.
The source trail.
Sources (12)
009: Marks, Not Markets
Article text retrieved; extracted text may omit tables or interactive elements.
investing101.substack.com