How can a venture LP get cash without selling its fund interest?
There are three ways: wait for the fund to distribute, borrow against the interest, or take distribution financing, an advance repaid only from the interest’s future distributions. Secondary sales, tender offers, strip sales and continuation vehicles all raise cash by selling something, usually at a discount to NAV.
What each route gives up
| Route | Sells anything? | Who decides | What it costs |
|---|---|---|---|
| Wait for distributions | No | The LP | Time. Many 2014–2016 funds still hold more than their size |
| Loan secured by the interest | No | The LP and a lender; pledging usually needs GP consent | Interest, with recourse and a maturity. Few lenders take single venture interests |
| Distribution financing | No | The LP; GP acknowledgment | A fixed return paid from distributions; upside above it stays with the LP |
| LP secondary sale | Yes, the interest | The LP; GP consent to transfer | Venture stakes traded at about 68–79% of NAV in 1H 2026 |
| Tender offer or continuation vehicle | Yes, part or all of the interest | The GP sets it up; each LP elects | Priced by the lead buyer; LPs who roll keep exposure |
| GP-led strip sale | Yes, a slice of the portfolio | The GP | A discount on the slice sold, shared by every LP |
Selling costs the most when the fund does well
A sale at a discount locks in the price on the day of the sale. If the fund later returns more than its NAV, the buyer keeps that gain. Borrowing or financing keeps the interest, so the LP keeps the gain, and pays a cost that does not grow with the fund’s outcome. The trade-off reverses if the fund falls short of its marks: then the sale would have been cheaper.
Our calculator shows the break-even for a given NAV, discount and expected distributions.
What about a NAV loan?
A NAV loan is borrowed by the fund, not the LP, so every LP shares the debt and the GP decides whether to take it. Funds managed by advisers relying on the venture capital exemption are also limited to short-term borrowing of up to 15% of capital contributions and uncalled commitments, which rules out most multi-year NAV loans. See the FAQ for the rule.
Sources and related questions
Sources
- Jefferies, Global Secondary Market Review, July 2026
- Campbell Lutyens, 1H 2026 Secondary Market Report, August 2026
Related
- What discount do venture LP stakes trade at in 2026?
- Should a venture LP sell a fund stake or hold it?
- The venture liquidity guide
Updated October 19, 2026. Yantacaw provides distribution financing; this page also covers options we don’t offer. General information, not legal, tax or investment advice.