The Information : Lightspeed Mulls Selling $1 Billion in Startup Stakes

Lightspeed Mulls Selling $1 Billion in Startup Stakes

Lightspeed Venture Partners has approached investors about selling stakes in 10 investments worth $1 billion as the firm seeks to return some cash to its limited partners, according to a person familiar with the plans. The VC firm, which made early bets in Snap and Affirm, will roll the stakes into a new continuation fund, and its limited partners could sell their stakes or remain invested for an extended period. The Financial Times first reported on the plans.

The strategy, which is more common in private equity, follows a two-year initial public offering drought, which has made it difficult for VC firms to return cash to their investors. Some firms have started to sell parts of their portfolios to distribute funds back to limited partners, the pensions and endowments that invest in VC funds. Continuation funds have emerged as an increasingly popular option, allowing VC firms to transfer their portfolios from older funds into a new fund and return some cash to investors. Other large tech investors such as Insight Partners have also introduced continuation funds over the last year.