The Startup Betting It Can Turn Locked-Up Venture Bets Into Cash - Without a Fire Sale

Every venture capitalist knows the feeling. A fund position marked at two times cost, three times, five times - a number that looks great on the annual letter and buys exactly nothing. The money is real. Reaching it is not. To get cash out, you usually sell your stake in the secondary market, and secondary buyers are not sentimental. They want a discount, they want your upside, and they want your seat at the table.

Turbine, a fintech based on Main Street in Santa Monica, was built around that gap. Its idea is almost boringly simple, which is often the sign of a good one: instead of selling a fund position to get liquidity, borrow against it. Keep the asset, keep the upside, and take out a loan secured by what you already own - the same move a homeowner makes with a house or a public-market investor makes with a margin account. In April 2025 the company came out of roughly two years of stealth with $121.75 million in combined equity and debt behind it.

"The broader private equity market accounts for more than $13 trillion in capital globally. Substantially all of this capital base is locked away in illiquid positions." Mike Hurst, co-founder and CEO

01What Turbine actually does

Turbine underwrites the fund positions held by limited partners and general partners, then lends against their value. A limited partner who committed to a venture fund, watched it appreciate, and now wants cash can pull up a portal, see borrowing power calculated from the fund's current net asset value, and apply for a loan. The pitch on the company's own site is that this happens in days, and that the borrower keeps ownership and full upside of the position the whole time.

The engine underneath is where the data-science talk earns its keep. Underwriting an illiquid, thinly reported venture fund by hand is slow - the kind of work that eats months of analyst time. Turbine leans on machine learning to read fund performance data and price collateral, compressing that diligence into a matter of days. The company describes the underwriting platform as "first-of-its-kind," and the practical claim is straightforward: illiquidity is partly an underwriting problem, and if you can underwrite fast, you can lend against things that used to be untouchable.

02The problem, in one number

The number Hurst keeps coming back to is $13 trillion - his estimate of the capital sitting inside private-market positions globally, most of it locked. That is the total addressable ache. The everyday version is smaller and sharper. When distributions slow and exits stall, as they have across recent venture vintages, LPs get squeezed: capital calls keep coming, cash does not, and the only relief valve most of them know is a discounted secondary sale.

Hurst's line about the math of a sale is blunt: "If your venture position is marked at 2.0x, you may be lucky to get your principal back in a secondary sale." That is the emotional core of the sell. A markup that says you doubled your money can convert, in a secondary, into barely getting your money back - after fees, after tax, after handing the future to someone else.

03Why not just sell? The secondaries comparison

Turbine positions its loan directly against the secondary market, and the contrast is the whole marketing. A secondary sale tends to mean a discount of 30 to 60 percent to the carried valuation, the surrender of future upside, a taxable event, legal fees, and the loss of your standing with the fund manager. A loan keeps all of that intact and simply carries interest.

There is a catch worth stating plainly, because Turbine's own materials do not dwell on it: a loan is still leverage. Borrow against a position and you owe money whether or not the fund performs, and a mark that falls can turn a comfortable loan-to-value into an uncomfortable one. That is the trade a borrower is making - certainty of debt in exchange for keeping the asset - and it is why Turbine says it targets seasoned funds run by repeat managers rather than every first-time GP with an optimistic spreadsheet.

"Turbine breaks this tradeoff. With Turbine, investors will benefit from the same set of leverage and liquidity tools found in public markets." Nate Redmond, Alpha Edison

04Follow the money

The $121.75 million headline is really three numbers stacked. There is $8.75 million in seed funding, quietly raised around early 2023. There is a $13 million Series A, announced at launch and co-led by Alpha Edison and TTV Capital, with Fin Capital, B Capital and Sozo Ventures joining. And there is the piece that makes a lending business a lending business: a warehouse credit facility of up to $100 million from Silicon Valley Bank, now a division of First Citizens Bank.

Combined backing at launch: $121.75M - $21.75M equity, up to $100M debt facility

The business model reads like plumbing, which is the compliment. Turbine underwrites a position, originates credit against it, funds the loan off the warehouse line, and places that debt with banks, insurance companies and asset managers. It earns on the spread. The service is invite-only. It is not, at least for now, a consumer product with a download button.

05The people behind it

Turbine is led by co-founder and CEO Mike Hurst, who built it with Peter Andes, Rob Freelen and Kaare Wagner. Hurst is a repeat fintech founder: he previously started and ran Exactuals, a payments company serving the entertainment industry that was acquired by City National Bank, and he spent time as a venture partner at TTV Capital - one of the firms that went on to co-lead Turbine's Series A. The team of roughly 26 draws from Silicon Valley Bank, City National Bank and a run of fintech startups, which is a useful pedigree when your product is essentially a specialized lending desk wearing a software interface.

TTV Capital's Gardiner Garrard pointed at that resume, praising the founding team's "proven track record of success" - the kind of quote that matters more than usual in a business where the entire product is trust that the underwriting is right.

06Where it fits

Turbine is playing in fund finance, a corner of the market that banks and specialist credit funds have worked for years through NAV lending and subscription lines. What is newer is the packaging: a data-science underwriting engine aimed at the GP and LP community directly, framed as the private-market answer to the margin loan. The competition, in practice, is not only other lenders but the reflex to sell - the secondaries market that Turbine spends most of its pitch arguing against.

Whether the model holds through a genuinely bad venture cycle is the open question, and an honest reader should keep it open. Lending against illiquid, self-reported marks is a business that looks smartest when valuations are rising and gets tested when they are not. Turbine's answer is discipline on the front end - repeat managers, seasoned funds, machine-priced collateral - and a balance sheet backed by an institution the size of First Citizens. The bet is that the demand is structural, not cyclical: as long as trillions sit locked in private funds, someone will want to borrow against them without giving them up.

The copy-able idea, for anyone watching, is the reframe. Turbine did not invent a new asset. It looked at the least liquid corner of finance and treated illiquidity as an underwriting problem to be solved with data, rather than a fact of life to be endured. That move - find a huge pool of value that is technically ownable but practically frozen, then build the machinery to lend against it - is the template, whatever happens to Turbine itself.