The IPO Is No Longer The Only Exit. Why Venture Capital Is Building A New Liquidity Layer - 0100 Weekly Brief
Hello there,
Last week, we explored what SpaceX may teach us about the future of private markets.
For decades, the venture capital model followed a familiar path. Investors backed companies early, helped them grow, and eventually exited through an IPO. Public markets were where companies raised large amounts of capital, where investors realized returns, and where most people gained access to the next generation of market leaders.
But SpaceX showed something different.
By the time the company reached public markets, much of the value creation had already happened. Employees had sold shares through tender offers. Early investors had accessed liquidity through secondary transactions. Private market investors had participated in years of growth long before the IPO.
If companies are creating more value while they remain private, how are investors finding liquidity before an IPO?
Do we find the answer in the secondary market? Is the market on track to become larger than the IPO one?
The IPO Model is Under Pressure
The growth of secondaries is not happening because investors suddenly prefer them to IPOs. It is happening because the venture ecosystem has changed.
Twenty years ago, successful technology companies often went public within five to seven years. Today, many of the world’s most valuable venture-backed companies remain private for more than a decade.
According to the World Economic Forum, the average time for a venture-backed company to reach an IPO has increased to around 12 years. At the same time, nearly 1,900 unicorns remain privately held around the world, representing more than $7 trillion in value.
Companies such as SpaceX, Stripe, Databricks, OpenAI, and Anthropic have demonstrated that it is possible to reach enormous scale without entering public markets. This is partly because private capital has become much more abundant. Venture funds, growth investors, sovereign wealth funds, family offices, and institutional investors are now willing to fund companies through multiple stages of growth. Businesses no longer need public markets as early as they once did.
For founders, this creates flexibility. For investors, it creates a challenge. If companies stay private for longer, everyone waits longer for liquidity.
The Rise Of The Secondary Economy
This is where secondaries enter the picture. At its simplest, a secondary transaction allows an existing shareholder to sell shares to another investor without the company raising new capital.
That shareholder might be an employee who has spent years building the business. It might be an early venture fund approaching the end of its lifecycle. Or it might be a founder looking to take some risk off the table after years of work.
Historically, these transactions were relatively uncommon. Today, they are becoming a normal part of company building.
As companies remain private for longer, employees cannot be expected to wait 12 or 15 years to access liquidity. Venture funds cannot always wait indefinitely for an IPO. Founders increasingly want flexibility without being forced into an exit.
Secondaries solve those problems. Rather than waiting for a single liquidity event at the end of the journey, liquidity can occur throughout a company's life. That trend has transformed what was once a niche market into one of the fastest-growing areas of private capital.
According to PitchBook, annualized US venture secondary volume exceeded $112 billion in early 2026, surpassing public listings for the first time.
Where Are We Heading?
Venture capital depends on a cycle. Investors commit capital to funds. Funds invest in startups. Successful companies generate returns. Those returns are distributed back to investors, who then reinvest in the next generation of funds and startups.
When exits slow down, that cycle slows down as well. The World Economic Forum estimates that roughly $3 trillion of unrealized value remains locked inside venture portfolios. The value exists, but much of it has not yet been converted into cash that can be recycled back into the ecosystem.
Secondaries help bridge that gap. They provide liquidity to employees, founders, and investors while companies continue to grow. They allow capital to move without requiring every successful company to go public immediately.
In many ways, they are becoming an important pressure-release valve for the venture industry. Without them, the growing gap between company timelines and fund timelines would become much harder to manage.
However, much of today’s activity is driven by a relatively small group of companies. According to PitchBook, the top 20 names account for more than 80% of secondary trading activity. A handful of businesses, including SpaceX, OpenAI, Anthropic, xAI, and Anduril, dominate market volume.
That concentration is understandable. Investors naturally gravitate toward the most recognizable companies. But it also highlights the next challenge for the market.
The secondary ecosystem has proven it can create liquidity for elite companies. The question now is whether it can do the same for the thousands of venture-backed businesses that operate outside the spotlight. Because the need for liquidity extends far beyond a handful of AI companies.
Opportunity Emerges Where Capital Is Scarce
This is particularly visible outside the major venture hubs. In a recent conversation, Peter Oszkó, Partner at O3 Partners, argued that some of the most attractive secondary opportunities may be emerging in Central and Eastern Europe.
Many venture funds in the region were created through public funding programs and share similar lifecycles. As those funds approach maturity, managers increasingly need to generate liquidity for their investors.
At the same time, many portfolio companies still have room to grow. That creates a mismatch. Fund managers may need to sell. Companies may not yet be ready for an exit.
For secondary investors, that gap can create an opportunity. As Oszkó explained, successful secondary investing is not simply about buying shares at a discount. It is about understanding when the company and fund timelines no longer align.
Let’s Continue the Conversation at 0100 Emerging Europe
These themes will continue at 0100 Emerging Europe 2026 in Budapest (23–24 September), where private equity, venture capital, private wealth, and institutional investors will gather to explore how capital is moving across the broader Central and Eastern European region.
The agenda includes discussions on allocation trends, the scale-up funding gap, strategic autonomy, secondaries and liquidity solutions, defense and dual-use innovation, and what LPs are looking for in managers today.
We look forward to continuing the discussion in Budapest.