Inside the Revival of Venture Capital Liquidity with an Industry Pioneer
Hans Wildens, founder of Industry Ventures, discusses the structural liquidity crisis in venture capital where companies stay private 14+ years, creating a secondary market that may eventually exceed the primary market. He explains how AI is creating winners and losers among pre-AI companies, while emphasizing the importance of portfolio construction and risk management in this volatile environment.
Summary
Michael Brandmeier interviews Hans Wildens about the venture capital liquidity problem and the secondary market solutions his firm developed. Wildens explains that venture-backed companies now take an average of 14 years to exit through IPO or M&A, creating massive illiquidity. The venture secondary market, which didn't exist 25 years ago, has grown to address this structural problem.
Wildens identifies multiple causes of the liquidity crisis: over $1-3 trillion in illiquid capital sitting in prior venture funds, concentration risk around the top 25 private companies (while 30,000+ companies remain illiquid), and a dramatic decline in distributions from venture funds over the past five years (from 20 annually to 5-10). Even a normalized 50 IPOs per year cannot absorb the backlog of illiquid companies.
The secondary market now includes three transaction types: direct secondaries (buying individual company shares), LP interests (buying fund positions), and special situations (continuation funds and portfolio continuation vehicles). Remarkably, even secondary market participants are now conducting secondary transactions, creating a multiplier effect previously unseen.
Regarding AI's impact, Wilders notes a stark bifurcation: older companies that adopted AI-first strategies and rebuilt their tech stacks are experiencing dramatic acceleration and becoming acquisition targets at high multiples, while pre-AI companies that failed to evolve are experiencing deceleration or disruption. The majority of pre-AI companies will likely become buyout exits rather than high-growth IPOs. Wilders emphasizes that portfolio construction, risk sizing, exit timing, and return assumptions matter more than ever given the high loss rates in venture.
Wilders attributes the initial founding of Industry Ventures to the dot-com collapse in 2000, when he identified an opportunity to provide liquidity to distressed sellers. Over 25 years, the secondary market evolved from addressing episodic stress to becoming a structural feature. In 2026, Wilders agreed to combine Industry Ventures with Goldman Sachs Asset Management, driven by the desire to scale the business and leverage Goldman's sourcing engine alongside his team's Silicon Valley network and expertise.
Looking to 2030, Wilders anticipates major opportunities in the convergence of digital AI and physical AI, healthcare transformation, financial services, U.S. re-industrialization, military applications, and space exploration including lunar bases and satellite systems.
About this episode
As liquidity in venture capital declines, the secondary market is increasingly important for investors and companies, says Hans Swildens, partner in Goldman Sachs Asset & Wealth Management, on Goldman Sachs Exchanges: Great Investors. Swildens explains why companies are staying private longer and how artificial intelligence is creating opportunities as well as headwinds for portfolios. In this conversation with Michael Brandmeyer, global head and chief investment officer of the External Investing Group within Goldman Sachs Asset Management, Swildens also discusses the strategic rationale behind agreeing to sell his firm, Industry Ventures, to Goldman Sachs in January 2026. This episode was recorded on September 8, 2026. The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment, legal, or tax advice, a recommendation from any Goldman Sachs entity to take any particular action or be used as a basis for any other investment decision, or an offer or solicitation to purchase or sell any securities or financial products. Any forward-looking statements, case studies, computations or examples set forth herein are for illustrative purposes only. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any sponsorship, affiliation, endorsement, ownership or license rights between any such company and Goldman Sachs. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs. A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. © 2026 Goldman Sachs. All rights reserved. Learn more about your ad choices. Visit megaphone.fm/adchoices
Key Insights
- Wilders argues that there is over $1-3 trillion in illiquid capital trapped in prior venture funds, and even normalized IPO activity cannot provide sufficient liquidity to return capital to market in any reasonable timeframe.
- The venture secondary market has evolved from addressing episodic stress events (dot-com collapse) to becoming a permanent structural feature of the market, similar to secondary markets in other asset classes.
- Wilders claims that pre-AI companies face a critical bifurcation: those that successfully pivoted to AI-first strategies and rebuilt tech stacks are experiencing dramatic acceleration and high-multiple acquisitions, while those that failed to adapt are experiencing deceleration or disruption.
- The secondary market now exhibits a multiplier effect where participants in the secondary market conduct secondary transactions themselves, a phenomenon that historically never occurred and suggests the venture secondary market could eventually exceed the primary market in size.
- Wilders asserts that venture and growth secondary market activity is becoming nearly equal in size to buyout secondaries, with the venture secondary market estimated at $170 billion annually versus $300-500 billion in primary venture funding over recent years.
- Wilders explains that the average venture-backed company now takes 14 years to achieve liquidity through IPO or M&A, fundamentally changing the economics of venture investing and making the secondary market essential rather than optional.
- Portfolio construction, risk sizing, exit timing, and IRR assumptions matter more today than in previous market periods because the pace of technological disruption is compressed, allowing disruption to occur while companies remain private.
- Wilders attributes his decision to sell Industry Ventures to Goldman Sachs to the maturation of the secondary market and the need to scale further, arguing that combining his team's expertise with Goldman's institutional sourcing engine created a '1+1=3' opportunity.
Topics
Transcript
One thing that's interesting in our market that's starting to happen is that even participants in the secondary market are starting to get liquidity through secondaries, which historically had never happened. There's so much capital sitting in the system that it's not enough liquidity to give back to the market. And so we think that the venture growth market on the secondary side of the market can be larger than the primary. I think this is one of the most exciting times I've ever seen for investing, and I think we're just beginning in it. Welcome to Goldman Sachs Exchanges, great investors. I'm Michael Brandmeier. Venture capital has a liquidity problem. Companies are staying private longer, exits have slowed, and…
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