Partial Liquidity Through Secondary Sales
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Dan Akivis, senior associate at Expansion VC, on selling secondary and managing LP relationships
when you're raising your next fund, you want to show some distributions along with your markup.
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The point is that paper gains are not enough to prove a venture fund works. A markup says a company is worth more on paper, but a distribution shows cash actually came back to LPs. In fundraise mode, that matters because LPs judge managers on both upside and liquidity, especially when private companies stay private for longer and fund lives keep stretching.
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Secondary sales let a fund take a small piece off the table, send cash back, and still keep most of the position. That shortens the time LPs wait to see money, and gives the GP a cleaner story than unrealized marks alone.
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This is especially important in venture because many companies now stay private long enough to create a mismatch. The fund may be up on paper, but if exits are delayed, the GP can struggle to show realized performance when marketing the next vehicle.
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The catch is that distributions are hardest to produce in the exact names that need them most. Off cycle secondary markets are thin, buyers demand discounts because they lack information, and lesser known $400M to $600M companies can still be hard to sell at a fair price.
Going forward, more venture firms will treat partial liquidity as a portfolio management tool, not a betrayal of conviction. The winners will be the firms and platforms that can turn private shares into repeatable cash distributions, because that makes venture look less like a promise and more like a realizable asset class.