As I mentioned in my post about secondary transactions, these deals provide liquidity to shareholders in a number of situations.

One of the common reasons an investor might pursue a secondary is the need to provide limited partners (the investors in a venture capital fund) with liquidity at the end of the fund life cycle. This occurs because venture capital funds generally have a defined term and detailed rules about how investors in these funds can liquidate their assets in at the end of that period. In some situations, the need for liquidity can drive VCs to sell their stakes in a company before the company is ready to be acquired or go public.

Market conditions can also affect the need for secondaries. Simply put, in environments where the time to exit for a given investment is longer, more venture investors are likely to pursue secondary transactions.