Is selling/exiting as developed a discipline in venture capital as sourcing and picking?

Jackie Reses · Mar 31, 2023

Skill at exiting — the game theory of risk management around selling — is a major driver of returns in venture and private equity, and only a few investors have it

The best ones follow trends, spot breakages in the market, aren't emotional or enamored of their portfolio companies, and combine intuition with data-science-driven expertise

Scope: cites Coatue and the Laffonts as her exemplar

27:07 20VC: The Secret to Negotiating; Making $50BN for Yahoo on Alibaba | Why Everything You Know About Hiring is Wrong; Domain Knowledge and Past Experience are Dangerous | The Next 10 Years for Fintech; Winners, Losers and Crypto with Jackie Reses, CEO @ Lea

Miles Grimshaw · Sep 18, 2023

Venture has five stages, not four — sourcing, selecting, signing, supporting, and summiting — and the industry's push for 'forever funds' makes people forget an investment must eventually be consummated via distribution to a broader shareholder base

An investment is only truly a great investment once shares are distributed; that's the investor's responsibility even if the company isn't finished

15:08 20VC: Benchmark General Partner, Miles Grimshaw on The Five Pillars of Venture Capital, Why Data Can Be a Trap When Early-Stage Investing, Investing Lessons from Missing Figma and Plaid & The New Business Model for AI & Why Co-Pilot is an Incumbent Strate

Jake Saper · Mar 10, 2025

Emergence sold Salesforce far too early, and exit timing in public positions is an underdiscussed determinant of venture returns

They sold shortly after the IPO and missed the bulk of the appreciation; as a result their Zoom fund, not the Salesforce fund, is their best fund

Scope: he was not at the firm for the Salesforce decision

65:19 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Immad Akhund · May 12, 2025

Timing exits is a real skill he lacks, and he should have taken more chips off the table in 2021.

The Truebill founders sold in December 2021 at what turned out to be the perfect moment; as an active CEO angel he has no time to review each unicorn for secondary opportunities.

Scope: constrained by being a part-time investor while running a company

14:46 20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

Miles Dieffenbach · Aug 4, 2025

The five pillars of venture are sourcing, picking, winning, helping and selling — and selling is the newest, least developed muscle for the asset class as a whole.

18:22 20VC: Inside Carnegie Mellon's $4BN Endowment | Why 90% of LPs Shouldn't Invest in VC | The $140BN Problem with Multi-Stage Funds | The Hidden Math Behind DPI, TVPI, and Illiquidity with Miles Dieffenbach

Harry Stebbings · Mar 31, 2023

The venture orthodoxy of 'lean into your winners' is wrong; most of the best returns come from deliberately leaning out of winners in increments over time

Leaning out is also a very successful strategy that the industry ignores

Scope: requires being thoughtful and deliberate about increments

26:50 20VC: The Secret to Negotiating; Making $50BN for Yahoo on Alibaba | Why Everything You Know About Hiring is Wrong; Domain Knowledge and Past Experience are Dangerous | The Next 10 Years for Fintech; Winners, Losers and Crypto with Jackie Reses, CEO @ Lea

Harry Stebbings · Oct 27, 2023

Investors should lean out strategically and sell in increments over time rather than following the conventional advice to always lean in

That was his biggest lesson from the last few years

35:29 20VC: The Three Types of Seed Round Today, Why Seed Has Never Been More Competitive, Why Pricing Has Never Been Higher, Why Boards at Pre-Seed Can Be Helpful & How Too Much Cash Too Soon Can Harm Companies with Ed Sim, Founder @ Boldstart

Hussein Kanji · Jan 20, 2025

Post-IPO selling should be programmatic — a third at lockup expiry, a third six months later, a third six to twelve months after that — rather than a judgment call.

There is too much human error in discretionary selling; they held Darktrace through its peak and mistimed the exit, and you get pressure when you don't sell at the top.

Scope: they overrode this with human judgment on Deliveroo, selling at IPO because they thought it fairly valued, and that worked

19:19 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Larry Aschebrook · Jun 16, 2025

Firms need guardrails against the individual investor's instinct to chase multiple; the right discipline is to dollar-cost-average out of positions the way you dollar-cost-average in, taking liquidity privately and continuing through the listing

Chasing multiple is a structural problem in their strategy and liquidity is hard to get

52:30 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Martin Mignot · Aug 11, 2025

Systematic quarterly selling beats discretionary selling for a venture portfolio, even though individual names disprove it.

They ran the analysis on alternative schedules and would have been worse off; you can never sell only at the top, and across a portfolio done consistently for long enough the systematic approach produced the best outcome.

Scope: acknowledges counter-examples; portfolio-level, not name-level, claim

44:20 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Jake Gibson · Jul 14, 2023

Managers who had the chance to return DPI in the last few years and didn't take it made a mistake — you had to read the market and sell

The market conditions were there to sell, and they themselves sold in some cases (though not nearly enough)

Scope: admits they too under-sold

27:08 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Jake Gibson · Jul 14, 2023

His single biggest investing mistake was not taking enough cash off the table — he deferred a sale that could have returned multiples of the fund because founders and the buyer suggested waiting for a higher-priced round

The company's expected up-round never happened once the market tanked in early 2022, so the liquidity was lost

27:30 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Michael Eisenberg · Jun 19, 2024

The biggest sin of the zero interest rate era was not selling enough of the portfolio, and more broadly that things becoming easy strips them of meaning

If something is not hard it doesn't matter; satisfaction comes from succeeding at challenging things — the protestant work ethic is a real deal

50:38 20VC: Foundation Models are the Fastest Depreciating Asset in History, Lina Kahn is a Threat to American Capitalism, PE is Not Coming to Save the M&A Market & How China Could Overtake the US in the AI Race with Michael Eisenberg

David Frankel · Oct 14, 2024

Company-level secondary liquidity is elusive and effectively unavailable except for pre-IPO high flyers

He can count the secondaries of his whole career on two hands; there is a real market for well-known names and then it falls off a cliff for smaller private companies

Scope: refers to company secondaries, not LP fund stakes

35:13 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Larry Aschebrook · Jun 16, 2025

Even the hottest AI private companies are only quasi-liquid: small positions can be sold, but there is no liquidity at scale

You cannot move a billion dollars of a position like Anthropic

Scope: small positions can be sold

77:51 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Mitchell Green · Mar 28, 2025

Relentless selling — targeting 2–5x in three to seven years and moving on — plus cutting downside zeros produces high DPI and very good returns, and selling too early is regrettable while selling too late never is

Their business isn't hunting 100-baggers with a tail of zeros; pigs get slaughtered, so the discipline of exiting beats holding

22:25 Target a modest multiple and timeframe then exit relentlessly rather than chase outliers

Mitchell Green · Mar 28, 2025

Firms should run a formal disposition process — an investment committee in reverse — that systematically evaluates exiting positions via secondary buyers, early investors or crossover funds

Many funds are good at investing but bad at selling, so exiting needs the same institutional rigor as entering

23:49 Formal reverse investment committee process for disciplined exits

Mitchell Green · Mar 28, 2025

TA Associates' edge is a relentless focus on getting liquidity back to LPs rather than maximizing paper marks

They will invest, then sell 30% of the company to someone else two years later to get their capital back, so they are already at 1x before the outcome

50:37 Prioritizing liquidity and partial sales over maximizing paper marks

Mike Maples · Jan 6, 2025

Selling decisions should be case-by-case, tested against criteria you set out soberly in advance, rather than run on a fixed structural schedule

You should be able to say: we decided when sober that if these things happened we might be sellers, that is happening now, do we still feel that way?

34:50 Case by case selling tested against pre set criteria beats fixed schedules

Harry Stebbings · Sep 6, 2024

He should have been much more proactive in managing positions and exiting when he could have, and investors need both a banker-like mindset on position sizing and liquidity timing and the artisanal element.

He held companies that looked like rockets and turned out not to be — Clubhouse, Hopin, BeReal remain portfolio assets whether he likes it or not

49:08 Investors need both banker like discipline on position sizing and artisanal judgment to exit well

Harry Stebbings · Jun 19, 2024

Consumer positions should be sold because consumer success is transient and ephemeral, whereas enterprise offers much more predictability

Whether a consumer product works is far more transient; enterprise businesses are more predictable

38:54 Sell consumer hold enterprise based on relative predictability

Mike Maples · Sep 20, 2023

Venture success partly requires having enough companies in flight at critical mass during rare 18-month acceleration windows and being disciplined enough to sell into them

In windows like late 1999 and 2020-21 companies are valued detached from fundamentals, and the difference between selling then and not selling is massive for returns

59:51 Capturing rare 18 month acceleration windows requires portfolio critical mass and selling discipline

Mike Maples · Sep 20, 2023

The best VCs in 2021 were not doing many deals because they were selling, and their funds ended up 5x to 10x better than peers who made the same investment decisions

They understood what was happening in the market and recognized it was time to sell rather than buy

61:13 Top 2021 vintage funds outperformed by selling into euphoria rather than buying

Larry Aschebrook · Jun 16, 2025

The thing LPs most misunderstand is how genuinely hard liquidity is; low DPI numbers reflect that difficulty rather than any unwillingness by managers to return capital

Getting out of positions is at least as hard as getting into the best deals, and may be harder

77:18 Low dpi reflects genuine difficulty of exiting not manager unwillingness

Harry Stebbings · Jun 16, 2025

Liquidity in venture is only available in the assets you don't want to sell — the winners are sellable tomorrow while the losers are unsellable

In his own first fund every winner could be sold immediately and none of the weak positions can be

78:03 Liquidity exists only in winners losers are permanently unsellable

Larry Aschebrook · Jun 16, 2025

The conventional 'sell your dogs and keep your winners' rule is roughly inverted — you have to be willing to sell winners to run a sustainable firm and generate returns

Selling winners is what actually produces the distributions that drive a fund and firm forward

78:19 Selling winners not losers is what sustains a firms returns

Harry Stebbings · Apr 4, 2025

Generating liquidity — including via secondary markets — is becoming an ever more important part of the VC job

Late-stage private capital has flooded in and public markets keep getting delayed, but at some point you have to deliver cash to your investors

42:43 Generating liquidity is an increasingly important vc job

Nabeel Hyatt · Apr 4, 2025

A VC's primary job — glimpsing the future through founders while keeping a beginner's mind — consumes all available hours, so secondaries, growth investing and conferences are second, third and fifth jobs he won't take on until he's good at the first

Being open to a founder's off-piste idea requires time, energy, research, trying every product and curiosity; hours are finite and he doesn't think he's good at the core job yet

43:07 Core founder facing job must be mastered before taking on selling or other jobs

Miles Dieffenbach · Aug 4, 2025 · hedged

Union Square Ventures has been the best in the industry at selling, running a strict protocol with founders in years eight to twelve of a fund to signal they will be active sellers.

They have an explicit, disciplined process communicated to founders in advance.

18:36 Usv proves disciplined programmatic selling is achievable

Danny Rimer · Jun 17, 2024 · hedged

Index's greatest strength is exiting, because the firm spends a lot of time thinking about exits

They deliberately devote time and process to exiting

32:41 Dedicated firm focus on exits becomes a competitive strength

Roger Ehrenberg · Feb 19, 2024

Investors should apply the same IPO-readiness test to private positions as a forcing function for objectivity about selling — if a company at a stratospheric valuation is nowhere near public-market ready, that argues for taking 10-20% off the table

The framework forces an objective answer to 'is this a public market candidate?', which counteracts the difficulty of selling into a bubble

32:42 Ipo readiness test as forcing function for objective selling decisions

Roger Ehrenberg · Feb 19, 2024

Because The Trade Desk was IA's first franchise-making win, exiting it fast was the right call even though it left enormous money on the table

The firm-defining nature of a first grand slam changes the calculus; returning five to six x net on one position secured the franchise, and holding risked the brand if markets turned

38:33 Securing a firm defining first win justifies selling early despite leaving money on the table