Unlike many VCs who hold winners indefinitely, LeadEdge has a formal disposition committee that meets monthly. They constantly underwrite the forward IRR of each position and proactively sell, even in secondary markets, if a target return is met early.

Many PE firms hurt their DPI by holding onto assets too long, chasing an idealized exit price. Achieve Partners attributes its top 5% DPI performance to a disciplined strategy of selling businesses once underwriting targets are met, recognizing that the market is generally right about value.

Founders who try to perfectly time an exit with market conditions are twice as likely to have second thoughts and report less satisfaction. The most fulfilled founders are those who sell when they are personally ready, regardless of market timing.

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.

Beyond performance or market conditions, private equity operates on an ingrained five-year cycle. This 'center of gravity' creates a psychological timeline that heavily influences the decision to sell, as funds are structured around this holding period and LPs expect liquidity within that general timeframe.

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.

Private equity firms will sell a high-performing asset not just for a good return, but to generate DPI (Distributions to Paid-In Capital). This provides LPs with tangible cash returns, validates the firm's paper valuations ('marks'), and builds crucial momentum for raising their next fund.