Exploring Venture Secondaries Fund

Interview Snapshot

Rohit Yadav: Rando, thank you for joining us today. Let’s start with a bit about your journey and why you launched Siena.
Rando Rannus: Thanks, Rohit. My journey started in consulting in the early 2000s, then I exited my own startup in the 2010s. About five years ago, I joined forces with two other GPs who had deep experience in investment banking and early VC in Central Eastern Europe (CEE). We saw early-stage venture becoming crowded, valuations rising, and investors looking for liquidity. That’s when we did one of the first secondaries in Bolt, and in 2021 we institutionalized this by launching a dedicated VC secondary fund—Siena.

Rohit Yadav: What’s the investment focus at Siena, and what’s your vision over the next 3–5 years?
Rando Rannus: We focus on company-level secondaries for scale-ups originating in Central Eastern Europe and the Nordics—think founders or tech teams from these regions, but companies that are global in nature. We don’t do LP stakes or continuation funds; the market isn’t ready for that yet. Most older funds were backed by single LPs like EIF or local government FoFs, so there hasn’t been much pressure for LP liquidity. But we believe that in the next 3–5 years, that will change, and we may start looking into those structures too. Currently, we target companies with at least €10M in annual revenue, growing 50%+ annually, and valuations north of €100M. Our ticket sizes are between €1–5M, which puts us in a relatively empty mid-market space—too large for angels, too small for firms like Industry Ventures or Goldman Sachs. Our counterparts are founders, early employees, and angels—not typically GPs.

"Company-level secondaries are where we see the biggest opportunity today…. In some cases, VC funds are still in their first or second generation — mostly backed by single LPs like EIF or government fund-of-funds.”

Rohit Yadav: Can you explain the three major types of secondaries—company-level, GP-led, and LP-led—in the European context?
Rando Rannus: Sure. Secondaries started with private equity, and only recently moved into venture. Europe is still following the U.S. model with a lag. Company-level secondaries have existed for years—founders, angels, and employees selling stakes. But GP-and LP-led secondaries are very new, especially in Europe.

We're seeing demand now because fund vintages from the 2010s are maturing. Liquidity pressure is rising, especially with the exit market stalled. In just Central Eastern Europe, the startup market cap is about €100B, and the estimated annual liquidity need is 2–3%, or €2–3B. That alone makes secondaries a meaningful market.

Rohit Yadav: So the company secondaries are well-established, but GP/LP secondaries are just getting started?
Rando Rannus: Exactly. For a long time, it wasn’t even acceptable for a founder to sell shares pre-exit. But in the last 10–15 years, especially in the U.S. and now in Europe, that mindset has shifted. Founders taking some chips off the table can actually align incentives better with investors and take bigger risks.

"Secondaries in venture were rare in Europe until recently, but the need for liquidity is growing fast…. If GPs have a home run, they prefer to hold onto it — but this is changing now with DPI pressures.”

Rohit Yadav: Let’s look at it from an LP’s perspective. Why invest in a secondary fund like yours?
Rando Rannus: Traditional early-stage VC is a “box of chocolates”—you never know what you’re going to get. It’s high-risk, high-reward. Secondaries offer more transparency—you know the companies, the metrics, the cap table. That’s attractive for LPs new to the asset class.

In fact, in our first fund, half of our LPs were first-time VC investors. They saw this as a more predictable way to enter venture. Historical data backs this up: only 1% of secondary funds fail to return 1x, versus 25% for early-stage funds. Plus, we have a shorter fund life—7 years vs. 10–12 years—and still target 20–25% IRRs, similar to early-stage VC.

Rohit Yadav: Why do you think the mid-market secondaries space is so empty in Europe?
Rando Rannus: Honestly, I’m not sure. But we're seeing more funds pop up—Danish, Swiss, and others. In the U.S., big firms like Sequoia and Accel have legally restructured to invest more into secondaries. That’s a clear sign. Europe is catching up, and I think we’ll see more players entering this space soon.

Rohit Yadav: What are the biggest trends you foresee in secondaries over the next few years?
Rando Rannus: The market is splitting into two parts. On one side, you have big names like Stripe, SpaceX, OpenAI—where secondaries happen at a premium to the last round. On the other side, there’s everyone else—where discounts still apply, and if you do your homework, you can find great opportunities. That’s why we love focusing on CEE. There’s a clear lack of liquidity providers, and we can capitalize on that inefficiency.

"It used to be frowned upon for founders to sell pre-exit — now it’s seen as healthy…. Taking chips off the table helps founders stay motivated and aligned with investors."

Rohit Yadav: Are LPs showing more excitement about secondaries than investing in regular VC?
Rando Rannus: Globally, the secondaries market hit $120B last year and is growing 15–20% annually. LPs are definitely interested, especially because secondaries allow for capital recycling when IPOs are frozen. And yes, firms like StepStone and Industry Ventures are raising massive secondary funds. They know the playbook and can scale it fast.

Rohit Yadav: Zooming in on your region, what’s the secondary activity like in CEE?
Rando Rannus: In CEE, startup market cap is €100B with at least €2–3B annual liquidity need. But there are few buyers. That gap creates opportunities. You see names like Elevenlabs in Poland and Vinted doing large, oversubscribed tenders—sometimes at premiums. Then you have companies like Bolt, which has consistent secondary activity but is still waiting for the right IPO window.

"The secondary market today is split — top names like OpenAI and Stripe get premiums, others trade at discounts…. It’s not logical to only focus on the 20 top-name companies — there’s value in the long tail."

Rohit Yadav: You've mentioned a few times the "divide"—premium for top names, discounts for the rest. Is this sustainable?
Rando Rannus: I don’t think it’s ideal. In theory, most secondaries should happen at a discount because you’re not buying the latest preferred shares, and you’re providing liquidity. But the demand for “brand name” companies has skewed the market. That’s where we see our alpha—we focus on underappreciated but solid companies that others are overlooking. For example, Bolt trades at a discount in secondaries, but our analysis suggests it’s already worth more than its last round.

Rohit Yadav: Let’s talk about deal-making. What are the key challenges in executing a secondary deal?
Rando Rannus: The biggest one is access to information. If you don’t have visibility into the company’s numbers, team, and cap table, you shouldn’t do the deal. Yet we still see investors buying through layers of syndicates without any info—especially in hot sectors like AI. Ideally, we work directly with founders and management, get welcomed onto the cap table, and build a relationship. No spray-and-pray approach.

Rohit Yadav: How do you mitigate risk within a deal?
Rando Rannus: Start with deep due diligence: understand the company’s growth, the cap table, the share class you’re buying, and who’s driving the exit. We also structure deals thoughtfully—if a new round is coming, we might close the deal now but agree to adjust the price when the round finalizes. You can also structure downside protection or upside-sharing clauses. But even plain-vanilla discounts work if the last round was recent.

"Access to company information is the biggest deal-making challenge…. Some investors are still doing 2021-style blind bets, especially in AI — we avoid that."

Rohit Yadav: How concentrated is your portfolio?
Rando Rannus: In Fund I, we had 10 companies. In Fund II, we’re planning for 15. It’s a concentrated approach compared to early-stage VC. Since we’re closer to growth equity, we already know the trajectory of these companies and can make larger bets. We also double down—Bolt, for example, we’ve invested in every year for the past four years. If it keeps delivering, why not?

Rohit Yadav: Rando, thank you so much. This was a masterclass in understanding secondaries, especially from a European and CEE perspective. Best of luck building Siena.
Rando Rannus: Thanks, Rohit. Really enjoyed this. And yes, secondaries are not just about liquidity—they’re about maturing the ecosystem.