Mercor’s Brendan Foody has taken aim at a practice he describes as “dual-pricing” in venture and secondary transactions, alleging that Sequoia and other major investors have sold the same equity interests at two different prices. The claim, as presented by Foody, is less about a single deal and more about a pattern—one that, if true, would raise uncomfortable questions about how valuation signals are created, how liquidity is priced for early holders, and what founders and employees should assume when they hear a “headline” valuation number.
At the center of the dispute is a deceptively simple idea: if the market is truly pricing the same security, why would the price differ depending on who is buying, when they are buying, or which channel the transaction flows through? In venture capital, those differences can be explained—sometimes legitimately—by timing, risk, structure, and negotiation leverage. But Foody’s criticism suggests that the explanation may not always be as clean as investors imply, and that the resulting valuation outcomes may not be as consistent as participants believe.
To understand why this matters, it helps to separate three concepts that often get blended together in public discussion: valuation, pricing, and liquidity. Valuation is the number everyone quotes—often tied to a round’s implied post-money figure. Pricing is the actual per-share or per-unit price paid in a specific transaction. Liquidity is the ability to convert paper value into cash (or cash-like consideration) without triggering punitive terms, delays, or governance complications. Dual-pricing, in the way Foody frames it, appears to challenge the assumption that these three concepts move together in a straightforward way.
What Foody is alleging
Foody’s core allegation is that Sequoia, along with other top firms, has allegedly sold the same equity at two different prices. The phrase “same equity” is important. It implies that the underlying economic interest being transferred is comparable—whether that means the same class of shares, the same rights package, or the same effective exposure to the company’s future outcomes. If the equity is truly the same, then large price gaps become harder to justify purely through differences in risk or structure.
However, “same equity” can be tricky in private markets. Venture securities are rarely identical in practice. Even within the same nominal class, there can be differences in side letters, transfer restrictions, participation rights, liquidation preferences, conversion mechanics, and the timing of when certain rights attach. There can also be differences in whether the buyer is receiving a direct purchase, a secondary transfer, or an instrument that includes additional terms. So while Foody’s claim is pointed, the real-world question becomes: were the transactions actually comparable in all the ways that matter economically?
That nuance is exactly why this debate is so consequential. If dual-pricing is merely a shorthand for “different deals have different terms,” then the criticism risks becoming a semantic argument. But if dual-pricing reflects a deliberate strategy—pricing one set of buyers differently from another for the same economic exposure—then it touches on fairness, trust, and the integrity of valuation signaling.
Why “dual-pricing” is plausible in private markets
Even without assuming wrongdoing, dual-pricing can emerge from the mechanics of private investing. Private equity and venture secondaries are not like public markets where a single order book sets a uniform price. Instead, private transactions are negotiated, structured, and often constrained by information asymmetry and access.
Several factors can create legitimate price dispersion:
1) Timing and information
A buyer who purchases earlier may be paying for uncertainty that later buyers don’t face. Conversely, later buyers may demand a discount if new information changes perceived risk. In venture, where narratives evolve quickly, even small changes in expectations can shift pricing.
2) Deal structure
Secondary transactions can be structured as direct share purchases, tender offers, or transfers through intermediaries. They can include indemnities, escrow arrangements, or different settlement timelines. Those differences can affect the effective price even if the headline per-share number looks similar.
3) Transfer restrictions and consent
Some equity cannot be freely transferred. Consent requirements, ROFRs, and contractual limitations can make certain sellers more “liquid” than others. A seller with fewer constraints might command a better price, while a seller facing friction might accept less.
4) Buyer leverage and bargaining power
Sophisticated buyers can negotiate aggressively, especially if they believe the seller has limited alternatives. Sellers with strong relationships or multiple bids can push for higher pricing. In that sense, price differences can reflect negotiation rather than valuation manipulation.
5) Risk allocation
If one transaction includes additional guarantees or absorbs more downside risk, the price can adjust accordingly. Even when the equity class is the same, the surrounding contract can change the risk profile.
So, dual-pricing is not automatically evidence of misconduct. But Foody’s critique implies that the dispersion is not fully explained by these factors—and that the market may be using valuation language in a way that obscures the reality of how prices are actually set.
The trust problem: when valuation becomes a moving target
In venture ecosystems, valuation is more than a number. It’s a social contract. Founders use it to communicate progress to employees and early supporters. Employees and early investors use it to gauge whether their opportunity is being rewarded. Later-stage investors use it to benchmark whether the company is “on track” relative to peers.
When pricing diverges from valuation narratives, trust erodes. Not because every deal must be identical, but because participants begin to suspect that the valuation story is being selectively applied. If one group receives a favorable price while another group—holding the same economic exposure—receives a less favorable one, the system starts to feel like it has hidden rules.
This is particularly sensitive in venture because many early stakeholders are not professional traders. They may not have the same ability to access secondary liquidity, negotiate terms, or understand the fine print of share classes and transfer mechanics. When they see a valuation number quoted publicly, they often assume it reflects a coherent market view. Dual-pricing, if it exists as a pattern, challenges that assumption.
What makes this moment different
The reason this story resonates now is that secondary markets have grown rapidly, and with them, the complexity of how liquidity is distributed. As more investors seek to manage portfolios, reduce exposure, or realize gains, secondaries have become a mainstream part of venture finance rather than a niche activity.
At the same time, the industry has been under pressure to improve transparency. Regulators and policymakers have increasingly scrutinized private market practices, especially around disclosure, conflicts of interest, and the fairness of transactions involving insiders. Even when no legal line is crossed, the reputational cost of perceived unfairness can be significant.
Foody’s call-out fits into that broader context. It’s not just a complaint about a single price; it’s a challenge to the credibility of valuation processes in a market that already struggles with opacity.
The founder and employee angle: incentives and expectations
For founders, valuation is a tool. It helps recruit talent, attract investors, and set expectations for future fundraising. But founders also rely on the secondary market to provide optionality to employees and early backers. If secondary pricing is inconsistent, founders may inadvertently create a mismatch between what employees believe their equity is worth and what they can actually realize.
Employees often experience this mismatch emotionally and practically. They may see a valuation headline that suggests their shares are worth a certain amount, only to discover that liquidity is priced differently—or that the path to liquidity is gated by consent, timing, and investor preferences. When dual-pricing enters the conversation, it intensifies the feeling that some stakeholders are benefiting from information and access advantages.
For early supporters, the stakes are even higher. Many early investors take on risk long before the company has proof. If later investors can monetize at favorable prices while early holders receive less favorable terms, the system can appear to reward proximity to power rather than risk-taking.
Again, none of this proves wrongdoing. But it explains why the allegation lands with such force. It’s not merely about numbers; it’s about the perceived fairness of the ecosystem.
How “true pricing” gets debated in venture
The venture industry has long wrestled with the question: what is the “true” price of private equity? In public markets, the answer is relatively straightforward: the market sets a price continuously. In private markets, the answer depends on the transaction.
A venture round sets an implied valuation, but it doesn’t necessarily establish a universal price for all existing shares. Secondary transactions can occur at different times, with different buyers, and under different conditions. That means “true pricing” becomes a contested concept.
Some argue that the most meaningful price is the one established by the most recent primary round, because it reflects current investor sentiment and updated risk assumptions. Others argue that secondaries are more informative because they represent actual willingness to pay for specific blocks of shares, including the friction and constraints of transfer.
Foody’s dual-pricing framing suggests that the industry may be treating different prices as “true” depending on which narrative is convenient. If the same equity can be sold at two different prices, then the question becomes: which price is being used to justify valuations to different audiences?
That’s where the debate shifts from finance mechanics to governance and ethics. Even if both prices are defensible in isolation, using them inconsistently can create a misleading picture of value.
A unique lens: valuation as a negotiation artifact
One way to view this controversy is to treat valuation not as a discovery of objective truth, but as a negotiation artifact. In private markets, valuation is often the outcome of bargaining among parties with different leverage, different information, and different constraints.
From that perspective, dual-pricing could be interpreted as a symptom of negotiation dynamics rather than a deliberate scheme. But Foody’s accusation implies something more strategic: that the negotiation process may be structured so that some parties consistently capture better terms while others absorb the cost.
If that’s the case, the issue isn’t simply that prices differ—it’s that the system may be designed to produce predictable asymmetry. And once asym