Venture capital investors facing liquidity challenges have a new solution on the horizon. With IPOs remaining scarce in recent years, limited partners (LPs) in VC funds—particularly wealthy individuals and smaller family offices—have struggled to access cash tied up in long-term investments. Turbine, a fintech startup emerging from stealth, aims to address this problem by offering debt financing secured by LP stakes in private equity and venture capital funds.
The company, founded by entrepreneur Mike Hurst following his personal experience with liquidity constraints after selling his startup Exactuals, has raised $22 million in equity funding. The round was co-led by Alpha Edison and TTV Capital, with participation from Fin Capital, B Capital, and Sozo Ventures. Turbine also secured up to $100 million in debt financing from Silicon Valley Bank to support its lending operations.
Turbine’s model functions similarly to a home equity line of credit, allowing LPs to borrow against the appreciated value of their fund positions. For example, an initial $3 million investment now valued at $10 million could serve as collateral for a loan, enabling investors to access liquidity without selling their stakes at a discount on secondary markets. This approach preserves potential future upside while addressing immediate cash needs.
Gardiner Garrard, co-founder of TTV Capital, highlighted the urgency of this solution, noting that traditional options like secondary sales often force LPs to accept steep discounts. “Turbine offers a reasonable alternative,” he said, pointing to current interest rates around 9%—a figure he argues is more cost-effective than liquidating assets prematurely.
While the service isn’t inexpensive compared to prime-rate loans, proponents argue it fills a critical gap in private markets. Turbine has already onboarded its initial venture capital backers as clients, with plans to expand access to additional funds following its public launch. As liquidity challenges persist in a sluggish exit environment, tools like Turbine could reshape how investors manage capital tied to long-term venture investments.
