Goldman Sachs Exchanges
2026-10-12 · Hosted by Allison Nathan · Goldman Sachs
Executive Summary
Goldman Sachs Exchanges host Michael Brammeyer interviewed Hans Swildens, founder of Industry Ventures, a venture secondary specialist with roughly $7 billion in assets that agreed to combine with Goldman Sachs Asset Management in January 2026. The conversation centered on the structural liquidity crunch facing venture capital: companies now take an average of 14 years to go public, and distributions out of venture funds have fallen from a historical 20% per year to just 5-10% over the last five years.
Key Stories & Changes
1. Venture Liquidity Crunch Has Become Structural
Average time from venture funding to IPO is now 14 years
Distribution rates to limited partners (LPs) have fallen from ~20%/year historically to 5-10%/year over the last five years
McKinsey estimated trapped NAV in prior venture funds at over $1 trillion; other estimates put it as high as $3 trillion
Swildens: even a normalized pace of ~50 IPOs per year would not return enough capital to the market given the scale of trapped NAV
2. The Venture Secondary Market Is Approaching the Size of the Primary Market
Venture secondary market estimated at ~$170 billion this year
Primary venture market could do ~$1 trillion of invested capital this year; averaged $300-500 billion over the last 5-10 years
Industry Ventures has operated in the space for 26 years, originally buying distressed portfolios after the dot-com collapse
A new "multiplier effect" is emerging: secondary-market participants are now selling their own positions via further secondary transactions, something Swildens says "historically never happened"
3. AI Is Bifurcating Pre-AI Venture Portfolios
Of roughly 30,000 venture-backed companies funded over the last decade-plus, only 1,000-2,000 are AI-native
Older companies that rebuilt their tech stack to be "AI-first" are seeing dramatic acceleration and cross-sell/upsell into existing customer bases
Other older companies are seeing de-acceleration as AI coding tools or shifting budgets displace their original products
Swildens said his firm saw three high-multiple exits last quarter among older companies that successfully reinvented around AI; he expects most others to pursue lower-growth, higher-profitability buyout exits rather than AI-driven hypergrowth
4. Goldman Sachs' Acquisition of Industry Ventures
Swildens sold Industry Ventures to Goldman Sachs in January 2026 after a 20-year working relationship and seven years of Goldman holding a stake in the management company
Rationale framed as a "third phase" of success: scaling via combination rather than independent growth, pairing Goldman's sourcing engine with Industry Ventures' Silicon Valley network
Trends Identified
1. Secondary Markets as the Release Valve for Private Market Illiquidity
As companies stay private longer and IPO/M&A activity remains constrained, the venture secondary market has become the primary mechanism for LPs, founders, and employees to get liquidity. Swildens argues this has paradoxically let companies stay private *even longer*, since secondary sales reduce the pressure to go public.
2. Pricing Risk Has Gotten Harder as Technology Cycles Compress
Unlike prior decades, companies can now go from rapid growth and valuation expansion to competitive disruption while still private, within a single fund's holding period. Swildens says this compression of the technology adoption curve is "new" and makes underwriting durability and competitive moats more difficult than in past cycles.
3. Institutional Consolidation in Alternative Asset Management
Industry Ventures' sale to Goldman reflects a broader pattern of specialist secondary/venture platforms folding into larger institutional asset managers as the market "institutionalizes" — framed by both speakers as a function of scale advantages (sourcing, network, balance sheet) outweighing independence. ---
Sentiment Analysis
Overall Market Sentiment: Bullish on Innovation, Cautious on Liquidity
Swildens frames this as one of the most exciting investing periods of his career, while simultaneously describing venture liquidity as under real structural strain — optimism on opportunity, caution on exit mechanics.
Risk Factors Highlighted
Compressed disruption cycles: Private companies can now go from rapid growth to competitive disruption while still private, within a single holding period, complicating risk pricing.
Elevated loss rates in venture secondaries: Swildens notes the venture secondary market has "more loss rates than almost any other equity market" in terms of losing capital on transactions.
NAV mark accuracy: Some fund holdings are described as increasingly over- or under-valued, with marks becoming "more extreme" amid market concentration.
Concentration in top private names: Heavy crowding exists in the top 25 private companies, while the remaining ~30,000 companies face an illiquid market.
Elevated IPO bar: Companies must now combine very large scale with both growth and profitability to go public, pushing many to stay private longer.
Legacy company disruption risk: A cohort of older, pre-AI venture companies risk being displaced by AI-native competitors or internal AI coding tools that reduce the need for their original products.
Market-wide distress precedent: Swildens notes the strategy originated from dot-com-era distressed selling, underscoring the asset class's historical vulnerability to capital market shocks.
This episode was covered in today's [The Market Signal — 2026-10-12](https://marketsignal.beehiiv.com/p/the-market-signal-2026-10-12), a cross-source synthesis of multiple podcast reports.