Once the investment period has expired, the VC fund will be finished with making initial investments and will focus solely on advising and working with the companies to continue scaling and to position for an exit. The harvesting period is the third and final phase. The hectic pace during the investment period will slow down and the GPS will instead focus on their existing portfolio of company investments. While exits might be realized opportunistically anytime throughout the VC fund lifecycle, the harvesting period is typically two to four years post investment period.

The harvesting period is critical to maximizing the full potential returns from the investments the VC fund team, but primarily the GP with direct responsibility and board oversight for the investment will need to determine and guide the company on how and when to maximize the value.

A VC fund can consider a follow on investment and or pursue an exit strategy. VC funds will often set aside capital for follow on investments to support the company in reaching certain milestones before the next round of capital by adding additional capital as a follow on investment. The VC fund also avoids potential ownership and value dilution if the company were to find funding elsewhere. An exit strategy will be discussed in more detail later, but the goals of an exit are to reap the highest return possible for the VC fund and provide liquidity to the LPs in the form of capital distributions. The two most common exit strategies are IPOs and strategic sales. An exit can occur as early as six months after the investment by the VC fund. If the right strategic buyer and economic conditions are present, or an exit can drag out for multiple years, if the investment underperforms, the economy deteriorates, or buyers don't exist. For example, YouTube was founded in 2005 and exited in one year with a sale to Google to Twitter iPod seven years after its founding in 2006, and Facebook, LinkedIn, and Zoom each iPod within eight years of their respective launches. The longer an investment remains in a portfolio, the higher the required exit price to meet Target irr. Some VC funds may establish a cutoff period, for example, after 10 years to exit a company. When an IPO or strategic sale is not forthcoming, options for the VC fund include selling their position to a secondary fund or investor extending the VC fund, another one to three years to accommodate an IPO or strategic sale or holding a fire sale of the company.