The old VC mindset of "let your winners run" and waiting for an IPO is gone. Today's GPs must act as fiduciaries by creating liquidity plans, proactively orchestrating secondary sales, and navigating complex buyout deals with partial rollovers to generate returns for LPs.

Combat indecision and emotional attachment by pre-committing to sell an investment if it fails to meet a specific metric (the state) by a specific deadline (the date). This creates a pre-commitment contract that closes long feedback loops and prevents complacency with underperforming assets.

The firm's primary KPI is maintaining 95% gross dollar retention from its limited partners. This singular focus forces discipline in generating consistent investment returns and providing world-class client service, as both are required to hit the target.

Instead of making emotional decisions, establish "kill criteria" for each investment: a specific KPI (a state) that must be met by a certain time (a date). If the company fails to meet the predefined metric, you sell. This provides a disciplined, objective framework for portfolio management.

While investing (buying) gets the attention, the actual job of a VC is disciplined selling to return capital to LPs. This requires constantly re-underwriting positions to determine if they can still meet the fund's target returns from their current valuation, rather than holding on indefinitely.

Private equity funds, driven by IRR targets and fund lifecycles, often pass up good exit opportunities in hopes of maximizing returns later. This can backfire if the market turns. A better strategy is to sell opportunistically into a rising market, even if it feels early, rather than risk missing the window.

Young investors should prioritize achieving liquidity, even on smaller wins. These exits act as a 'report card' for Limited Partners, proving the VC can manage a full investment cycle. This track record of returning capital is a crucial career milestone that demonstrates fiduciary responsibility.

In frothy markets with multi-billion dollar valuations, a key learned behavior from 2021 is for VCs to sell 10-20% of their stake during a large funding round. This provides early liquidity and distributions (DPI) to LPs, who are grateful for the cash back, and de-risks the fund's position.

Investors fixate on selecting the right companies, but the real money is made or lost in the decision of when to sell or hold a winning position. The timing of an exit can create a 100x difference in outcomes. Having a disciplined approach to portfolio management and liquidity is more critical to fund performance than the initial investment choice.