SpaceX may IPO in 2026 at 24 years old, according to Mike Hurst of venture lending firm Turbine. That timeline is triple the 7-8 year average from the 2010s and illustrates a systemic shift stranding capital in private markets.
The extended exit window has cut LP distributions sharply. Fewer exits mean fewer dollars recycled into new funds, Hurst noted. In 2022, venture secondaries started requiring 20-40% discounts to NAV, making that exit route punitive for sellers.
LPs faced a denominator effect crisis when public equities and real estate fell in 2022-2023. Their private holdings suddenly exceeded allocation targets on paper, even as actual liquidity vanished. Many LPs stopped committing to new funds or delayed capital calls.
VCs hesitated to call capital and slowed deployment precisely when valuations had reset to attractive levels. Founders with strong products and traction struggled to raise funds to reach profitability or the next milestone, Hurst said.
This liquidity squeeze has driven demand for asset-backed lending against VC positions. A typical Turbine borrower is a family office with tens of millions spread across 10-20 illiquid stakes. These borrowers need cash for new opportunities or operating expenses but cannot exit positions without steep discounts.
The lending model lets LPs and founders access 30-50% of position value without selling. Interest rates run 8-12% annually, but borrowers avoid the 20-40% haircut on secondary sales. Lenders gain exposure to high-quality portfolios with collateral coverage.
Turbine and competitors have originated hundreds of millions in loans since 2022. Volume has grown 300%+ as the exit drought persists. The strategy works best for positions in companies with clear paths to liquidity within 2-4 years, not permanent hold situations.
The trend reflects a structural change in venture markets. Companies now raise Series D, E, and F rounds that once would have triggered IPOs. Median time from Series A to exit has stretched from 8 years in 2015 to 12+ years in 2025. Asset-backed lending has emerged as the release valve for LPs and GPs trapped between falling NAVs and frozen exit markets.