Impact Entrepreneur | April 2026 | Written by Brandon Tena Solis, Drew Tulchin & Katrina Dutt
Exits and liquidity are fundamental to every investor—angels, venture funds, and limited partners alike. Without viable paths to liquidity for investments into startup and high growth companies, capital circulation decreases. Business investing ecosystems slow down. The lore for startup companies was to achieve an IPO to provide returns to investors. That path is seldom these days. M&A is more common, although also rare.
Secondary markets, transactions where an existing investor sells their stake to a new buyer, without new capital entering the company, have emerged as a practical, complementary tool. For impact-oriented companies that need longer time horizons to scale responsibly, secondary markets may be exactly the liquidity infrastructure the sector has been missing.
Why Exits Matter—and Why the Impact Sector Needs Them Now
Statistically, it is a fact, companies are staying private longer, and traditional exit pathways have become less predictable. For context, the Q4 2024 PitchBook–NVCA Venture Monitor reports U.S. venture-backed exit value totaled $149.2B in 2024, with $500M+ exits. This is far below 2021 levels[1] . Public markets remain volatile, and acquisitions face mounting regulatory scrutiny. The result: capital gets locked up, investors who specialize in early stage companies are taking longer to receive payouts, limiting recycling funds into new companies. Business ecosystems stall.
For impact investing, the stakes extend beyond returns. High-impact companies—those pursuing environmental, social, community, and/or governance goals alongside financial performance — are sometimes perceived as sacrificing returns for mission. That perception persists in part because the sector lacks widely visible, well-documented high-return liquidity events. Without financial ‘wins’, without media-worthy exits and measurable investor returns, trends of capital into the “triple bottom line” sector are harder to sustain – new capital harder is to attract. Secondary markets offer a practical path to change that dynamic: they generate real, documented returns for investors while companies remain privately held and mission-aligned.
The urgency of this challenge is well-documented. The 2025 Angel Capital Association (ACA) Angel Funders Report, drawn from 69 angel groups including New Mexico Angels — found that exit count has dropped more than 60% since the 2021 peak, with median returns hovering at just 1.3x and one in four exits returning less than invested capital. M&A accounts for 85% of all liquidity events, while IPOs contributed only 5% in 2024 and nothing in 2023. Among the ACA’s recognized exits for 2024: Arizona Tech Investors’ stake in Virtuous Software, a B2B SaaS platform designed to help nonprofits better manage donor relationships, generated a 13.6x return (56% IRR) when Susquehanna Growth Equity led a $100M secondary-enabled financing in September 2024, giving early investors the option to cash out while the company remained privately held and mission-serving. This is the kind of documented, impact-adjacent return the sector needs more of.[2]
The contrast with companies that remain unrealized is equally instructive. Across the 854 companies angel groups tracked in the 2024 data, the vast majority have not yet generated a liquidity event. Many of these are in life sciences, clean tech, and community-serving sectors, precisely the companies that require longer development timelines and sustained, mission-aligned capital. When early investors have no exit path, the pressure to harvest returns can conflict directly with a company’s need for a continued runway to reach its full social and financial potential. Secondary markets offer a mechanism to relieve that pressure without forcing the company toward a premature sale or a loss of mission-aligned ownership.
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