🪙 Liquidity Rewritten

In venture capital, there’s a familiar cycle:

🚪 Startups raise capital

📈 Grow fast

🎉 Exit via IPO or acquisition

💰 Distribute returns

That cycle is broken.

The exit window hasn’t just narrowed—it’s warped. IPOs remain scarce, M&A is lumpy, and “wait and see” has become a default exit strategy. For founders, employees, and even funds, the timeline to liquidity has stretched beyond reason.

So where’s the release valve?

Secondaries.

And not the backroom, one-off type. We’re talking structured tenders, real-time trading platforms, and institutional buyers entering with scale.

📉 The Problem: Unrealized Value, Unreturned Capital

According to the Q2 2025 PitchBook-NVCA Venture Monitor:

• $67.7B in combined IPO + M&A exit value last quarter

• Down more than 40% from 2021’s quarterly highs

• Dry powder continues to rise, but distributions lag badly

• The average time from Series B to IPO now exceeds 8 years

Meanwhile, the estimated valuation of US-based unicorns now exceeds $3.2 trillion—mostly on paper. Investors are marked up, not paid out. Founders and employees are stuck waiting for exits that may never come.

📈 The Shift: Secondaries Go Institutional

Into this void steps a fast-maturing secondary market. Once informal, it’s becoming professionalized and programmable.

Hiive, a modern marketplace for secondary transactions, reports a 680% increase in transaction volume from 2022 to 2024, topping $1.8 billion last year. The firm estimates the U.S. venture secondary market reached $60 billion in Q2alone—nearly on par with all traditional exit value.

That’s not anecdotal—it’s structural.

Hiive CEO Sim Desai put it simply in a recent WSJ Pro interview:

He’s referring to recent adjustments to the Qualified Small Business Stock (QSBS) exemption. Here’s what changed:

• Tax-free capital gains cap increased from $10M → $15M per issuer

• New step-up exclusions at years 3 (50%), 4 (75%), and 5 (100%)

• The company asset threshold for eligibility rose from $50M to $75M

While subtle, these changes unlock more flexibility for founders and early shareholders—and more supply for secondary buyers.

🔁 Founders Are Rewriting the Liquidity Playbook

What’s emerging is a shift in mindset:

Founders are no longer waiting for perfect conditions to “exit.” They’re building durable companies and engineering liquidity along the way.

Some examples we’ve seen across the market:

• Post-Series B tenders to retain key talent while staying private

• Targeted secondaries for early investors who want off the cap table

• Recurring annual liquidity windows, modeled after Stripe and Figma

This isn’t viewed as weakness. It’s now a recruiting edge. Given how insane the market for AI talent has become, what AI exec or top flight engineer isn’t thinking about liquidity, when they watch folks take $100 million pay packages from Meta, along with other stratospheric compensation trends?

💡 What This Means for VCs and LPs

If you’re a venture firm, ignoring secondaries is no longer an option:

• LPs increasingly expect liquidity solutions, not just IRR models

• Top founders are demanding structured flexibility

• The “we’re long-term partners” narrative rings hollow without optionality

The best firms are leaning into this moment by:

• Running internal benchmarks on secondary pricing vs. last round

• Partnering with platforms like Hiive to facilitate clean, compliant sales

• Using tenders as signaling tools, not damage control

• Educating their founders on QSBS and tax-efficient liquidity

🧠 The Content Playbook

If you’re in venture comms or platform, now is the time to own the secondaries narrative. Some ideas:

1. Break down the QSBS change with a founder-facing blog post

2. Publish your tender policy framework to show you support controlled liquidity

3. Share pricing trends (e.g., how Hiive50 or Caplight indexes compare to private marks)

4. Highlight case studies where secondaries helped retain top talent

5. Build “liquidity readiness” into your value-add messaging

The firms who can explain how they help founders access liquidity without sacrificing ambition are going to win the next wave of deals.

🪜 Liquidity ≠ Exit. It’s a Strategic Lever.

The era of binary outcomes—stay private or go public—is over.

We’re entering an age where liquidity is modular, proactive, and programmable. And the firms that treat secondaries not as a workaround, but as a core feature of company-building, will be the ones that thrive.

Secondaries aren’t a sideshow anymore.

They’re the next frontier in venture.