If we are really embarking on a new era of internet capital markets, the whole notion of exit liquidity needs to be reframed.
In crypto being exit liquidity = bad. And perhaps that is sometimes the case given some of the characters in the space.
But in traditional markets, exit liquidity is more around giving a more mature investor the opportunity to achieve their specific risk-adjusted returns goals.
On a specific investment, a 2x to a VC over 5 years isn't particularly helpful. But to a pension fund, it's excellent.
Part of this is due to the notion that later stage investors are able to finance more mature investments with leverage. They can also objectively unlock new channels of value (e.g. M&A).
What attracted me to TradFi initially was how companies used financial engineering to meet cash flow goals. As crypto matures, I’m excited to see the rise of a new capital structure, one that bridges innovation and institutional alignment.
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