Louis Lehot on Venture Market Liquidity, Outlook for 2025 – 'I don't think it's as rosy as people thought'

Foley & Lardner LLP partner Louis Lehot shared insight in The Wall Street Journal article, “Lack of Liquidity Expected to Persist Despite Post-Election Excitement,” on the current state of the venture market and its prospects in the year ahead.

Lehot said the market is unlikely to see a significant increase in liquidity anytime soon.

“I don’t think it’s as rosy as people thought the morning after the election,” Lehot explained. “We don’t have sustained flat interest rates, we don’t have an IPO window, and I don’t see one coming.”

Lehot commented that even with the incoming change in administration, he does not expect regulators to drastically change their stance on antitrust issues, meaning “we won’t have the opening of the floodgates” on startup acquisitions.

“People are done for the year and it will be a slow start” to 2025 he continued, highlighting that conditions will likely start improving later in the year. He added that the present lack of liquidity will continue stalling the venture market as limited partners await distributions.

“Until we see more [distributions to paid-in capital], it’s very difficult for fund managers to run capital calls,” he added.