Liquidity has always been the Achilles’ heel of venture capital investing. Having your capital tied up for years in long-term VC funds might make sense on paper, but it can quickly become a nightmare when markets shift, expenses arise, or unexpected financial needs pop up.
I recently came across a game-changing startup that tackles this exact problem—and I had to share my thoughts. It’s called Turbine, and it's founded by entrepreneur Mike Hurst, who knows the liquidity dilemma firsthand. After selling his company Exactuals in 2018, he did what many successful founders do: reinvested in venture funds. But the tech crash in 2022 exposed a flaw. His capital was locked up, and the calls for fresh capital didn’t stop.
So, what did Hurst do? He built Turbine, a fintech debt platform designed to help limited partners (LPs) access cash without selling their stakes at a discount.
How Turbine Works
Turbine allows LPs in VC and private equity funds to take out loans secured by the appreciated value of their investment. Think of it like a home equity line of credit—but instead of your house, your LP stake is the collateral.
For example, say your $3 million investment in a VC fund has appreciated to $10 million. Turbine lets you borrow against that $10 million valuation—without forcing you to exit the position or sell it on a secondary market for less than it’s worth.
It’s a huge win for those who don’t want to sell early and miss out on future gains.
Funding and Backers
Turbine just came out of stealth with $22 million in equity funding, co-led by Alpha Edison and TTV Capital. Other backers include Fin Capital, B Capital, and Sozo Ventures. On top of that, they secured up to $100 million in debt from Silicon Valley Bank to power their lending operations.
Let that sink in. Not only do they have investor confidence—they have a serious war chest to help fund liquidity for LPs across the VC landscape.
Why This Is a Big Deal
This is a solution that, honestly, should’ve existed long ago. As TTV Capital’s co-founder Gardiner Garrard put it, LPs often struggle to get cash when they need it. Selling LP interests in a fund typically comes with a discount—meaning you’re leaving money on the table. Turbine changes that by offering loans without requiring you to give up future upside.
Sure, interest rates aren’t dirt cheap (currently around 9%), but given the alternatives—like fire-selling equity or mortgaging personal assets—this is a solid option.
Real-World Relevance
What struck me most about Turbine’s story is how relatable it is. Even if you’re not an LP in a VC fund, we’ve all been in situations where we needed liquidity but didn’t want to offload valuable assets at the wrong time.
The same applies to LPs: they’re stuck between a rock and a hard place. Either sell your future at a discount or scramble to find cash elsewhere. Turbine gives them breathing room—and more control.
Who’s Using It?
Unsurprisingly, Turbine’s first customers are the very firms who backed it. Those five VC firms are already offering their LPs access to the credit solution. And the startup plans to expand rapidly, making its credit platform available to more funds post-launch.
Turbine is solving a genuine pain point in the venture capital ecosystem. As someone who follows fintech and startup trends closely, I can say this is the kind of innovation the industry has been begging for.
Whether you're an LP, a GP, or someone like me watching this space evolve, Turbine’s approach is worth paying attention to. Liquidity without compromise? That’s something we can all get behind.
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