The VC Liquidity Crisis: How LPs Are Finding Exits After 20 Years

Commentary on TechCrunch's "Our Funds Are 20 Years Old"

By Premier Alternatives Team

The Problem: Your Capital Is Locked Up Longer Than Ever

A recent TechCrunch investigation reveals what many limited partners (LPs) already know: venture capital has a liquidity crisis. What was once a 13-year commitment has morphed into an 18-20 year marathon—and LPs managing over $100 billion are scrambling to adapt.

As Adam Grosher of the Getty Trust notes in the article, the "asset class is just a lot more illiquid" than expected, with funds holding "blue-chip assets" for 15-20 years.

The stark reality: If you invested in a VC fund in 2008, you might still be waiting for your capital back in 2025.

By The Numbers: The Liquidity Drought

The TechCrunch piece highlights several eye-opening statistics:

Funds routinely extending to 15-20 years vs. the expected 13
90% valuation haircuts in secondary markets (companies valued at 20x revenue offered just 2x in secondaries)
Emerging managers facing 80% markdowns on perceived winners
Capital concentration: Established managers raised 8x more than emerging managers in recent periods

For LPs, this creates a portfolio management nightmare. You're stuck holding illiquid positions in aging funds while new opportunities emerge.

Why This Matters for You

If you're an LP, this liquidity crisis impacts you in three critical ways:

1. Cash Flow Planning Becomes Impossible

When distributions get pushed from year 13 to year 18, your entire allocation model breaks down. University endowments, foundations, and family offices that planned spending around historical timelines now face shortfalls.

2. Opportunity Cost Mounts

Capital locked in a 2010 fund can't be deployed in today's AI revolution or other emerging sectors. The longer your money sits, the more opportunities you miss.

3. Vintage Year Risk Compounds

Over-concentration in certain vintage years (2020-2021, anyone?) becomes harder to rebalance when funds won't return capital for two decades.

The Solution: Secondary Markets

Here's what TechCrunch's article hints at but doesn't fully explore: LPs are actively using secondaries to manage this crisis.

The article mentions that institutional investors "are actively using secondaries to manage illiquidity"—and that's exactly where Premier Alternatives comes in.

How Secondary Markets Provide LP Liquidity

Rather than waiting 18-20 years for a fund to mature, LPs can access liquidity now through secondary transactions:

Direct Secondary Sales

Sell your LP stake to another investor
Get cash today, not in 2035
Exit underperforming or over-allocated positions

Single Asset Secondaries

Monetize specific high-value portfolio companies
Reduce concentration risk
Realize gains on mature positions

Portfolio Rebalancing

Free up capital from older vintages
Redeploy into current opportunities
Maintain your venture allocation without being trapped

Real Market Data: What LPs Are Actually Getting

While the TechCruch article mentions the 90% discount scenario (20x revenue → 2x revenue offers), the reality varies significantly based on:

Company quality and growth trajectory
Investor demand for the specific name
Overall market sentiment
Fund timeline and distribution pressure

On Premier Alternatives, we're seeing:

Established unicorns trading at 40-60% of last round valuations
High-growth pre-IPO names commanding premium pricing
Mature "zombie" positions requiring deeper discounts

The key is having price discovery and competitive bidding rather than accepting a single lowball offer.

Why Now Is The Time To Act

The TechCrunch article reveals a structural shift: LPs are rebuilding allocation models to assume 18-year fund lives. This means:

More competition for secondary liquidity as everyone adjusts simultaneously
Better pricing for sellers who move proactively vs. desperately
Opportunity to redeploy before the next vintage year cycle

What You Can Do Today

If you're an LP sitting on:

Funds from 2015 or earlier with no clear exit timeline
Over-allocated vintage years (especially 2020-2021)
Underperforming managers you wish you'd never backed
Capital needs that can't wait another 5-10 years

You have options.

Start With These Steps:

Inventory your portfolio - Which positions are truly illiquid?
Assess your priorities - Where do you need liquidity most?
Get market feedback - What are similar positions trading for?
Explore structured solutions - Can you sell 50% and keep upside?

The Bigger Picture: Venture's Evolution

As Michael Kim of Cendana notes in the article, "Network and domain expertise have a shelf life" unless managers actively refresh connections. The same is true for LP allocations—they need regular rebalancing that's impossible without liquidity tools.

The venture capital model is evolving. The old "spray and pray, then wait 13 years" approach is dead. LPs who adapt by actively managing liquidity—through secondaries, portfolio sales, and strategic rebalancing—will thrive.

Those who don't? They'll be the ones TechCrunch writes about in 2035, still waiting for distributions from their 2015 funds.

Get Help Finding Liquidity

At Premier Alternatives, we specialize in helping LPs navigate exactly this situation. Whether you're looking to:

Exit a single fund position
Monetize shares in a specific portfolio company
Restructure your entire venture allocation
Find buyers for hard-to-trade positions

We've built a marketplace designed for the new reality of 18-20 year fund cycles.

Because your capital shouldn't be held hostage for two decades.

About This Article

This commentary is based on reporting from TechCrunch's "Our Funds Are 20 Years Old: A Look Inside the Liquidity Crisis Reshaping Venture Capital" published November 18, 2025. All quotes and statistics are attributed to the original source.

Original Source: TechCrunch Article Type: Commentary & Analysis Category: Education

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