The 2022–2024 mark-down cycle in late-stage venture is largely complete. The harder question — what does growth equity look like on the other side of it — is now legitimately answerable.
The reset is mostly behind us
On the prevailing data and what we have observed across processes, the median secondary mark on quality late-stage assets has compressed roughly 35–55% from 2021 peaks, with concentrated outliers either side. That work is, in our view, substantially complete. New primary rounds are pricing off realistic multiples again. The exception list is shrinking.
What growth-stage capital is screening for
The discriminating filters have changed materially. In the easy-money era, the lead screen was growth at almost any cost. Today's growth funds are explicitly underwriting:
- Demonstrated path to profitability inside 18 months of close, not the 36–48 month horizons that worked in 2021.
- Capital efficiency metrics that compare favourably against listed peers, not just private benchmarks.
- A credible secondary or strategic exit narrative — not necessarily an IPO timeline, but a coherent answer to the question of how the next holder gets paid.
None of this is novel investing — it is, in fact, the discipline that built the franchise of every reputable growth platform. What has changed is that the discipline is now the explicit filter, not the implicit one.
“The discipline is now the explicit filter, not the implicit one.”
For founders raising at growth stages
Board conversations now warrant more preparation than they did 24 months ago. Specific suggestions:
- Lead with the unit economics story. Bridge revenue, gross margin, and the cost-of-acquisition trajectory in the first ten minutes.
- Be transparent about cash runway and the path through it. Optimism without arithmetic is no longer persuasive.
- Frame the exit narrative early. Sophisticated growth investors will press on it, and they prefer founders who have already done the work.
Selective IPO optionality
The IPO window for venture-backed assets has not reopened broadly. It has reopened selectively — for companies with demonstrable scale, profitability, and operational maturity. Through the next four to six quarters, we expect a thin but credible stream of issuance from this profile, predominantly in B2B software, vertical SaaS, and select infrastructure-software categories. Companies positioned for this should be working with their boards and advisors now.
For growth-stage capital, the next 18–24 months reward operators who treat capital as expensive and unit economics as load-bearing. That is not bearish. It is, on the long view, healthier.