Q3 2025 finally delivered what the venture market had been waiting for: a meaningful reopening of the IPO window. Thirteen US IPOs of venture-backed companies generated $36.4 billion in exit value, a 2,861% year-over-year increase. Globally, 60 listings created $85.3 billion in exit value, up 368.6% year over year (PitchBook, Sept. 2025, source).
For venture capital, the impact is twofold. First, it confirms that the IPO market can function again after years of stalled exits. Second, it provides long-awaited liquidity for investors and LPs, setting the stage for a healthier fundraising cycle in 2026.
Liquidity takes center stage
A defining feature of this year’s IPOs is the unusually high share of secondary sales. For Figma, only 33% of IPO shares were new issuance, while Klarna’s was just 15%. Historically, IPOs of VC-backed companies averaged more than 90% primary issuance, but in 2025 that figure has dropped closer to 86%. The shift highlights the pressure on VCs to return capital to LPs after years of illiquidity (PitchBook, Sept. 2025,).
Market context: simmering, not blistering
While Q3 was a step forward, the chart below shows IPO volumes remain modest compared to the peaks of 2020–21. PitchBook described the activity as “simmering, not blistering,” with offerings balancing fundraising needs and liquidity for existing shareholders (PitchBook, Sept. 2025).
The calculus for investors
Most investors only sold part of their stakes, keeping upside exposure while satisfying near-term liquidity goals. The driving force is the time value of money—returning meaningful capital now, even if it means leaving some potential future upside on the table, is often the pragmatic choice when LPs are demanding distributions (PitchBook, Sept. 2025).
What to expect in Q4 and beyond
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Partial liquidity continues as lockups expire into 2026.
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Selective IPO access remains, favoring companies with profitability visibility and durable retention.
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LP pressure persists, keeping liquidity top of mind for managers raising new funds.
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Cautious optimism reflects the reality that geopolitical and macro risks could narrow the window again.
About Fidelman & Company
Fidelman & Company is an investment bank focused on venture capital fundraising for startups and emerging managers. From pre-seed through IPO readiness, we provide investor targeting, capital markets advisory, and disciplined process management to help founders and managers succeed in today’s market.
Planning a raise 2025? Contact us to align timing, materials, and outreach with current investor priorities.
