Comment by hobofan

Liquidity event != exit.

While an exit (= aquisition, IPO and similar) is obviously always the optimal end-goal, every round of fundraising is a potential liquidity event for all existing stakeholders.

It's very common to have partial liquidation from roughly Series B-C onwards on the side of founders (e.g. wanting to keep up lifestyle with your C-level peers; removing personal financals as stress factor) and earlier investors (e.g. their funds entering the liquidation period of their lifecycle).