The venture secondaries market is at an inflection point. After years of lagging behind the more established private equity secondaries ecosystem, venture secondaries are now seeing rapid growth, stronger deal quality, and a sharper strategic role for both GPs and LPs. Few firms understand this evolution better than VenCap, a specialist venture investor with more than 40 years of experience investing through multiple cycles.
At our recent event in Milan, we sat down with Matt Russell, Head of Secondaries at VenCap, to explore what is driving the surge in venture secondary opportunities, why quality matters more than discounts, and how the market is evolving as liquidity pressures intensify.
Matt explains that VenCap’s approach is built on deep specialization: the firm has invested in over 500 venture funds, deployed $3 billion, and completed its first secondary transaction in 1990. “Venture is all we do,” he says. “That level of focus matters when you’re evaluating secondary deals where manager discipline, valuation behavior, and portfolio construction vary enormously.”
One of the most striking shifts over the last 12 months, according to Matt, is the improvement in asset quality coming to the secondary market. Last year, sellers often brought weaker positions to market—frequently at very steep discounts that still failed to attract bids. This year, however, VenCap is seeing higher-quality assets priced at fairer levels, and deal flow has risen from $9 billion to more than $13 billion.
“A big discount on a weak or stale portfolio isn’t a compelling investment,” Matt emphasizes. “A smaller discount on a conservatively valued, high-quality portfolio is often far more attractive. Discounts alone tell you almost nothing about future returns.”
Instead, VenCap focuses on the underwriting fundamentals—manager quality, valuation discipline, resilience of the underlying companies, and whether the seller’s rationale for liquidity makes sense.
Matt believes venture secondaries will become an increasingly important part of the venture capital landscape. With companies staying private far longer and distributions at historic lows, investors will rely on secondaries as a core liquidity mechanism rather than a niche strategy.
