VCs Sacrifice Future Gains for Cash Amid IPO Dry Spell

Christopher McKinnon spoke to PitchBook about the current VC investment environment and how early-stage VCs are returning cash to their LPs by selling secondary stakes in their best portfolio companies to later-stage investors at significant discounts.

Christopher also noticed that VCs are accepting a larger discount for secondaries than they historically would.

“I see VC funds that got in early try take some of the risk off the table [because] they want to chalk up actual realized [returns] at 2x, 3x or 5x, even if they think [it’ll get] 25x if they continue to hold,” he said.

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