Timing of exit.

Since private market investments are not liquid and cannot be typically sold quickly, the timing of exiting the investment can have a large impact on returns.

The value received from exiting an investment will depend on market forces at the time of the exit.

VC funds will be keen to stick to a strict investment timetable for their company investments.

The exit can be very tricky to execute, and this is due to a series of timing factors, including internal issues within the company, such as slow sales growth or external factors such as economic downturns.

Being unable to complete a timely exit in a company can prove very frustrating as it ties the VC funds capital up in the company longer than it wishes to be invested.

And this can create problems for their own shareholders and investors. As well as hoping for good timing in terms of the best market conditions to time the sale, the VC funds will have to wait for a suitable buyer before they can exit an investment.

As with the initial investment in the company, the sale of any private market investment will have a longer lead time than publicly listed companies.

This includes time to find a buyer and negotiate the terms of the transaction, meaning that the ability to have good foresight into the future market conditions when the sale will actually take place can significantly impact a private market funds returns.