The core message of the session is that venture secondaries have become a central liquidity mechanism because traditional exit routes are producing cash for only a narrow slice of the venture ecosystem. The moderator framed the issue through the broader DPI and liquidity debate: headline numbers for IPOs and large trade sales look promising, but distributions are “hyper concentrated,” flowing to a small number of managers and LPs. Tom from StepStone then positioned the firm as a private markets asset manager and adviser with a venture and growth team that invests across funds, direct company positions, and secondaries, arguing that its fund commitments provide broad insight into where value is accruing across the innovation economy.

Tom’s first substantive argument was that recent M&A and IPO activity can look strong in aggregate while still failing to solve liquidity pressure for most venture LPs. He said 2026 is on track for roughly £400 billion in VC-backed M&A value, and 2025 was also strong except compared with 2021. But the value is highly concentrated: xAI, Cursor, Hugging Face, and OpenRouter accounted for about 80% of total M&A value in 2026 so far, while the top six outcomes accounted for about 50% in 2025. He added that scaled private companies are increasingly acting as consolidators, using stock transactions to acquire startups, which may help acquirers and acquirees but does not deliver cash liquidity to venture funds or LPs.

The IPO picture, in Tom’s view, reinforces the same problem. He said 2026 is on track to be an incredible IPO year, but SpaceX alone accounts for nearly £2 trillion of the £2.2 trillion total value cited, making the market extremely concentrated. He noted that hoped-for IPOs such as Anthropic may occur, but the threshold for venture-backed companies to go public has changed materially, with companies needing substantial revenue scale. He cited Cerebras as an outlier while still noting it had more than CHF 500 million in revenue, and said venture-backed companies that ultimately IPO are now about thirteen years old on average. With around 1,800 unicorns totaling approximately $8 trillion in market cap, even favorable capital markets would take significant time to convert NAV into cash for LPs.

From there, Tom connected this liquidity gap to the rise of venture secondaries. Venture funds are producing DPI more slowly: 2010 vintage funds returned capital within a decade and reached about 1.3x DPI, while 2025 vintages had returned about $0.70 on the dollar after a decade. At the same time, venture fundraising and deployment have not slowed enough, leaving U.S. LPs with five straight years of negative cash flows by 2025. Tom then outlined the three main secondary transaction types: direct secondaries, LP stake sales, and GP-led multi-asset vehicles. He emphasized that direct secondaries are the largest venture secondary segment, with an estimated 2025 transaction range of £60 billion to £120 billion and an addressable market of roughly $250 billion across the top 500 venture-backed private companies. He concluded that selling partial positions is now far less negatively viewed than in 2014, especially for early investors, employees, and former employees seeking rational derisking.