Venture capital is being turned on its head. With a constricting liquidity climate, investors, entrepreneurs, and even startup workers are having to re-examine the way money comes in—and more significantly, goes out—of startups. The era of counting on only gigantic IPOs or high-priced acquisitions is rapidly passing. In its place, new approaches are surfacing to keep the ecosystem humming.
Liquidity is the New Priority
Holding it all together in the middle of this shift is one singular concern: liquidity. “The changing landscape of secondaries—LP-led and GP-led secondaries, continuation funds, and tech buyouts—is becoming an increasingly important tool for venture firms with portfolios that are aging,” says Hans Swildens, founder and CEO of Industry Ventures.
Simply put, venture firms are no longer sitting idly waiting for exits. They’re actively creating them—selling shares of startups or funds to other buyers, in effect “manufacturing” liquidity when traditional alternatives aren’t on hand.
The Rise of Secondary Funds
Among the most significant developments is the growth in dedicated secondary funds. Take, for example, the Siena Secondary Fund, which is run by general partner Rando Rannus. As the Baltics’ first and only dedicated secondary VC fund, Siena is helping to redefine how founders, early teammates, and angel investors unlock liquidity.
Their approach? A nimble, founder-driven model that fosters fast-growing companies in the Nordics and CEE. Rannus says more than 70% of tech exits in 2024 have come via secondary deals—a very good indicator that this model is not only becoming mainstream but also the norm.
A Mixed Outlook for Founders
While some VCs are adapting well, things are not as rosy elsewhere. Founders, particularly those outside the large U.S. tech hubs, are suffering. UK startups, for instance, raised approximately £16.2 billion (circa $21.5 billion), while their U.S. counterparts raised a staggering $73.8 billion. That disparity indicates the growing, daunting obstacle of getting late-stage funding these days.
Secondary Markets as a Strategic Asset
Secondary transactions aren’t merely about providing founders an option for cash-out—they’re more and more being seen as strategic tools. Swildens points out that most firms are creating internal groups expressly to manage these deals. The word’s out: liquidity management’s no longer an afterthought; it’s central to the long-term well-being of a VC firm’s portfolio.
This is particularly important for older investments. Without timely exits, companies risk stagnating—or worse, losing value outright. A timely secondary deal can inject capital, provide breathing space, and create a platform for future growth.
Signs of Life in a Cautious Market
Even as the general slowdown continues, there are still bold moves being made by companies. Figma, to take one example, has confidentially filed for an IPO, going against a trend that has seen other well-known firms like Klarna and StubHub postpone public offerings in light of market volatility.
Concurrently, other high-profile developments indicate continued ambitions in tech. Bolt founder Ryan Breslow has come back with a new “super app” ambition, and OpenAI is said to be weighing a $3 billion buy of Windsurf (previously Codeium). These developments indicate that while old-fashioned exits may be more difficult to find, big plays are still very much in play.
The New Normal
So, where are we? The landscape for venture capital is distinctly changing. Continuation funds, secondary transactions, and innovative liquidity solutions are no longer fringe instruments—they’re mainstream now.
According to Rannus, operating in this new world “takes trust, timing, and strategic positioning.” The IPO fantasy isn’t dead, but the path to that fantasy looks much different than it did a few years back.
In the venture world today, the ability to be flexible, to uncover liquidity where others can’t—is perhaps the difference between stalling out and scaling up.
