PE & VC exit strategies in 2025
After years of stalled exits, private markets are heating up — and in 2025, PE and VC strategies are evolving fast.
After years of stalled exits, private markets are heating up — and in 2025, PE and VC strategies are evolving fast.
Whether through an IPO, acquisition, or buyback, understanding private equity (PE) and venture capital (VC) exit strategies is crucial when capitalizing on your investments.
Various factors, such as recessionary fears, high interest rates, and inflation concerns, have hit the market hard and limited exit options in recent years. However, the market is beginning to show signs of thawing — and innovating.
Here are two big trends in PE aasdfnd VC exit strategies to watch in 2025:
The dramatic rise in interest rates in 2022 and 2023 choked the private equity world. The number of PE-backed companies awaiting exit has never been higher, per a McKinsey report.
But now, as interest rates tick lower and credit spreads tighten, the exit environment seems set to improve. For example, almost a third of Limited Partners (LPs) surveyed by McKinsey planned to increase their private allocations this year. Dry powder — the amount of raised cash that hasn't been spent — is at an all-time high. S&P put the total uncommitted capital in July 2024 at a record $2.62 trillion and there's growing pressure to deploy those funds.
IPOs increased slightly in 2024, both in terms of the number of public floatations and the value of the listings. Experts are optimistic this growth will continue, particularly as a backlog of companies waits to go public.
It’s also important to watch how PE and VC exit strategies in 2025 impact the growth of secondary markets, particularly private secondary markets.
Secondary markets allow investors to buy and sell stakes in companies without having to go through an IPO. As traditional exits stagnated, secondary markets took off. Evercore data shows secondary transaction volume has doubled in the past five years, reaching $160 billion in 2024.
General Partners (GPs) are also using new channels to reach non-institutional investors, McKinley says. Technology has made it easier than ever for high-net-worth individuals to access private secondary markets.
For example, Augment connects buyers and sellers of private companies. This makes it possible for shareholders of private companies to access liquidity and allows qualified accredited investors to buy private shares at fair market prices.
In terms of PE and VC exit strategies, the ability to sell shares in private companies to a wider market could be a game changer. As companies wait for the right time to go public, employees no longer need to wait with them to access liquidity.
Watch out for several shifts in PE and VC exit strategies in 2025. The tight conditions of recent years could continue to thaw, which may lead to more sales and IPOs. Moreover, the secondary marketplace is likely to grow, offering companies and employees more ways to access liquidity.
*Securities transactions are executed on Augment Capital, LLC's ATS and offered through Augment Capital, LLC (member FINRA/SIPC).
Important Disclosures: Investing in private securities involves substantial risk, including the potential loss of principal. Private securities are typically illiquid, have limited pricing transparency, and often require longer holding periods. These investments are available exclusively to qualified accredited investors and offer no guarantee of returns. Additionally, past performance of private securities does not indicate or predict future results.