PitchBook News - VC returns data and new exit strategies

But these historical market returns are currently under significant strain. The lack of exits has cratered distributions, and valuation pressures are expected to compress future returns.

Later-series deals have been hit particularly hard. Not only are those returns relatively lower on an annualized basis, but the timelines of exits have extended significantly.

As IPOs and M&A remain elusive, many investors have turned to alternative forms of return generation.

Secondary exchanges have been around for some time, but until recently, there haven't been sufficient tailwinds to propel their wider adoption.

The recent uptick of investor interest in VC secondaries has led to record fundraising for this liquidity strategy. Several firms have also launched continuation funds, searching for ways to clean up their aging portfolios.

For investors across the venture lifecycle, the realization of returns is what truly matters. Though discounts may be given to create the needed liquidity, at some point, cementing a slightly lower-than-expected annualized return is better than seeing outsized paper gains disappear.

For more data and analysis, read the free research from our VC team this week:

VC Returns by Series: Part IV

Exit Alternatives for US VC