So who is driving all this action? Turns out, just about everyone.

Employees are looking to cash in their equity, early investors want to lock in returns, and institutional limited partners (LPs) are restructuring their portfolios. Meanwhile, corporate venture capital groups are shaking things up, older VC funds are offloading their tail-end assets, and continuation funds are becoming the cool new trend for keeping private companies afloat.

Now, let’s talk about what buyers actually want—and, more importantly, what they don’t. Profitable (or at least breakeven) companies are the name of the game, especially in AI/ML. If you’ve got an AI angle, you’re golden. However, with the AI hype cycle in full swing, investors are becoming more cautious. Our team at Siena has seen exceptional numbers from tech companies in less "sexy" industries—SaaS, marketplace, and fintech—that continue to deliver strong, consistent growth.

High-burn companies and capital-intensive businesses are also getting the cold shoulder. According to Rothschild & Co's recent Growth Equity Update, "More typically, the process of fundraising is much more measured than in the 2020-22 period. VCs are taking their time to do substantial due diligence. There is a greater focus on sustainable revenue growth and the path to profitability and free cash flow. There is skepticism toward funding multiple years of CapEx-intensive activity before revenues arise. Valuation is keenly thrashed out, and investor protections are commonly sought."

And then there’s the big question: Are IPOs making a comeback? Sort of. 

Experts predict that we might see 25 to 30 venture-backed IPOs in 2025, but don’t expect them to solve the liquidity crunch overnight. Last week, at the Goldman Sachs Disruptive Technology Symposium, a prediction was made that this year will bring more than 25 tech IPOs. While this is slightly below the long-term average of 30–35 IPOs per year, it signals a recovering market. For context, 2022 saw a historic low of just 4 IPOs—so things are looking up.

Only the strongest contenders—companies with $300 million+ in revenue, strong retention, and positive EBITDA — will make the cut. And even then, secondary sales may delay IPO timelines. Instead of rushing to go public, many companies are leveraging private valuations to fund M&A, hire top talent, and retain employees—all while avoiding the pressures of public markets.

When it comes to discounts, there are two sides to the story. On one hand, bid-ask spreads are narrowing, making it harder to find bargains. On the other, overlooked markets and industries still offer great opportunities to acquire valuable assets at a discount. This is especially true in the lower mid-market segment, where transaction volumes are smaller and the number of sellers is higher.

Additionally, it’s wise to look beyond the U.S. to regions like Central and Eastern Europe (CEE), where companies like Bolt, Vinted, and UIPath have become massive success stories. While some asset managers are dipping their toes into late-stage VC secondaries, many are opting for fund-of-funds models instead of diving headfirst into direct investments.