The Return of the Exit: Liquidity Is Back in Business

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After several years of stagnation, the venture capital ecosystem is finally experiencing renewed momentum. The exit markets—long dormant due to macroeconomic uncertainty, policy shifts, and an absence of investor confidence—are reawakening with force.

For general partners (GPs) and limited partners (LPs), the last few years resembled a holding pattern. Valuations climbed, but real distributions failed to materialize. Many startups remained private, reluctant to face public scrutiny or volatile market conditions. LPs grew cautious. GPs delayed fundraises. Liquidity was frozen.

But now, the thaw has begun.

Liquidity is back.

Over the past three months, we’ve seen a resurgence in both initial public offerings (IPOs) and mergers and acquisitions (M&A). These aren’t speculative headlines—these are real exits that are delivering material returns across the venture stack.

• eToro completed its IPO, converting a $19M early investment by Spark Capital into $530M, a remarkable 29x return.

• Hinge Health debuted on the NYSE, where Atomico realized ~30x returns and Insight generated a ~14x multiple.

• CoreWeave, the AI infrastructure company, went public at a $23B valuation and has outperformed post-IPO.

• Wiz was acquired by Google for $32B. Cyberstarts returned over $1.4B from a $6.4M seed investment, while Index Ventures earned approximately $3.8B from its stake.

• Next Insurance was acquired by Munich Re for $2.6B, delivering positive returns even in a down-round context.

• MNTN went public at a $1.6B valuation, benefitting early investors like Greycroft and Baroda.

• Chime has filed for an IPO, with expectations of a ~$20B valuation. If successful, early investors such as Menlo, DST, Ribbit, and Forerunner could see returns ranging from 10x to 100x.

• Circle, Figma and Klarna are next!

This is not an anomaly. It’s an inflection point.

💥 A Structural Reopening of Liquidity

This recent surge is not just a temporary burst of optimism—it marks a structural reopening of the exit environment.

For the past two to three years, the industry operated in a state of prolonged uncertainty. IPO markets were closed. Strategic acquirers paused. Valuations corrected. Late-stage financings became complex and often included downside protections. This led to deferred exits, delayed returns, and limited cash distributions.

However, macroeconomic indicators are now shifting. Inflation has started to cool. Interest rates are becoming more predictable. Trade disruptions and tariff concerns, though not entirely gone, have receded from the front page. And critically, investor psychology is stabilizing.

Markets crave predictability.

Predictability enables capital deployment, and capital deployment fuels exits. As confidence builds, the transaction velocity accelerates—and we are beginning to see that flywheel turn.

✨ Strategic Acquisitions Are Accelerating

Public technology companies have a mandate to grow, but they face natural limits to organic innovation. With ample cash reserves and intense competition for AI and software talent, many are turning to M&A as a growth strategy.

• Acquisitions provide immediate access to new revenue streams.

• They enable faster market penetration.

• They unlock new technology and user bases.

• And, most importantly, they can reaccelerate top-line growth.

Expect to see more blockbuster deals in the coming quarters. Companies like Klarna, Figma, Stripe, and Databricks are preparing for exits—some through IPOs, others through acquisition. This wave of deal-making is a rational response to the pressures public tech companies face and a direct result of greater economic clarity.

📈 IPO Markets Are Functioning Again

We’ve entered a new capital cycle. Gone are the zero-interest rate policies (ZIRP) that subsidized speculative growth. In this new environment, IPO-ready companies must demonstrate operational efficiency, durable revenue, and margin discipline.

Those that meet the threshold are being handsomely rewarded.

All four major IPOs this quarter—eToro, Hinge Health, MNTN, and CoreWeave—have traded up in the public markets. Investor appetite for high-growth, well-managed tech companies is evident. More importantly, these offerings are sending a signal to the late-stage private market: quality companies can and should go public.

This renewed interest in public listings restores optionality for founders, GPs, and boards. As multiples stabilize, expect more late-stage companies to enter the IPO pipeline. Momentum builds upon itself, and liquidity—once demonstrated—begets more liquidity.

🔀 Liquidity Transforms the Venture Landscape

Liquidity is not just a capital event; it’s the lifeblood of venture capital.

When exits happen:

• LPs receive returns, improving their confidence in the asset class.

• GPs can recycle capital and fundraise for successor funds.

• Founders and early employees see personal wealth creation.

• Seed and early-stage firms validate their portfolios and raise new vehicles.

All of this reinforces the cycle of innovation and investment. The psychological lift cannot be overstated—liquidity changes behavior. It emboldens risk-taking. It encourages new startups. It brings capital off the sidelines.

Over the last three months, we’ve moved from drought to downpour. The return of IPOs and M&A is not just a temporary market anomaly—it is the structural reactivation of venture capital’s most important engine: the exit.

So if you’ve been waiting for a sign, this is it.

The exit markets are back.
Liquidity is back.
And the next cycle is underway.

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