Secondaries Shouldn’t Be Your Only Early Liquidity Option

When I started Turbine, my goal was simple: enable venture fund investors to access liquidity without sacrificing upside, governance, or tax benefits. Over the years I’ve seen too many LPs and GPs turn to secondaries as the default liquidity option, and I believe that is often the wrong move.

The problem with secondaries

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If you’re an LP or GP and you sell a stake on the secondary market, you accept several unwanted trade-offs:

• You often take a large discount to NAV just to find a buyer.
• You give up future upside, and governance rights can get diluted or eliminated.
• You trigger a taxable event, potentially losing access to favorable regimes like QSBS.
• You start a process that is slow, costly, and resource intensive.

You are converting unrealized gains into cash, but at a cost that can be material. If you believe in the portfolio, giving up exposure and upside feels like leaving value on the table.

A better path: borrowing against your fund position

At Turbine, we’ve built a different path. Instead of selling, our solution lets LPs borrow against their fund positions. This provides liquidity while keeping ownership, upside, and governance in place.

Here’s how it works in broad strokes:

• We partner with GPs and venture funds to create a structure through which LPs can apply for loans, using their fund commitment or position as collateral.
• The loan proceeds can be used for whatever you need, such as new investments, managing cash flow, or seizing opportunistic calls, without disturbing your underlying fund investment.
• You pay interest and origination rather than taking a massive discount, and you preserve your full exposure to future upside.

Why this matters to both LPs and GPs

For LPs:

• You retain the portfolio upside you believe in.
• You avoid giving up seats at the table or strategic influence.
• You avoid triggering a capital gain because you haven’t sold.
• You keep flexibility around when and how you realize value.

For GPs:

• Your LP base remains intact, committed, and aligned.
• You avoid the stigma or structural issues that can come with secondary sales.
• You gain a tool that lets LPs access liquidity while staying invested in your fund.
• It helps future fundraising by showing you provide liquidity options without forcing exits.

How Turbine stands apart

• We work with leading funds and capital partners, which means we bring institutional rigor.
• Our process is faster and simpler than a full secondary sale, with less legal work and friction.
• We preserve 100% of your exposure, rather than giving up assets to someone else.
• We help you leverage unrealized gains instead of crystallizing them prematurely.

Earlier this year Turbine raised 22 million dollars in equity funding, co-led by Alpha Edison and TTV Capital, and secured a 100 million dollar credit facility to support our lending operations. This backing underscores that the market recognizes the need for liquidity solutions that don’t force exits. With this foundation, we can execute at scale for LPs and GPs, acting as a structured, institutional liquidity partner rather than a boutique secondary buyer.

When secondaries still make sense

This is not a wholesale replacement for every situation. If a fund is winding down or a GP is truly exiting the business, a secondary sale may still make sense. But when you believe in your fund and want flexibility instead of finality, ask yourself why you would sell at a discount when you can borrow instead.

Final thoughts

If I were speaking directly to an LP or GP right now, I would ask: Do you want cash now, or do you want both cash and upside preserved? Too often, the secondary route forces you to pick the former and sacrifice the latter.

At Turbine, we believe you can have both. There is an alternative to secondaries that lets you unlock capital without giving up what matters most.

If you are actively managing your fund, considering calls, or simply want optionality, let’s talk. We’d love to walk through how this structure can work for your situation.

— Mike Hurst, Founder, Turbine

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