Core Viewpoint - Investment institutions are increasingly opting for profit-sharing agreements instead of traditional buyback agreements due to the pressure of Distribution to Paid-In (DPI) ratios and the changing landscape of project selection [1][2][6] Group 1: Investment Strategies - Many investment firms are now focusing on projects that can provide dividends, as the previous reliance on IPOs for exits is becoming less viable due to a slowdown in the IPO market [1][2] - The term "Down round" has become prevalent, with approximately 70% of newly financed projects experiencing valuation reductions, indicating a market correction and increased caution among investors [3][4] Group 2: Exit Challenges - The current exit environment is challenging, with many funds established during the 2015-2016 period facing difficulties in timely liquidation, leading to repeated extensions [2][5] - The performance of many funds is disappointing, with some even underperforming compared to low-risk investments like money market funds, highlighting the struggles in recovering investments [5] Group 3: Flexible Exit Approaches - A new trend termed "flexible exit" is emerging, where investment firms are adapting their strategies regarding buybacks and are exploring alternative solutions, such as equity stakes in new ventures started by founders [7] - This flexibility includes not enforcing buyback clauses for early-stage projects, allowing for more favorable negotiations on valuations and transparency [7] Group 4: Future Outlook - There is hope for improved exit channels for VC/PE firms, with expectations for favorable policies to be implemented soon [8]