š° One set of figures takes the shine off VC pretty directly: emerging managers invest in āoutlierā companies at twice the rate of five mega-funds. In seed rounds from 2023 to 2025, the share was 24.7% for emerging funds, compared with just 11.5% for mega-funds.
š„ But that doesnāt mean smaller funds are better at picking winners. āOutlierā just means a company is unlike other companies in the market that have received fundingāit doesnāt mean itās more innovative or destined to succeed. Once foundersā backgrounds are factored in, the gap also narrows, to 19.8% versus 14.4%.
Honestly, what founders should really pay attention to is where a fundās money comes from and how much time it has left. Among the roughly 3,000 U.S. VC funds tracked by Carta, funds that began investing in 2017 are now nearly nine years old. Their median net DPI is just 0.37x, and even the top quartile is only at 0.70x. Only the top 10% have returned more than the original capital.
š” A high paper valuation doesnāt mean investors have received cash. The median paper value for 2017-vintage funds is 1.72x, but only a portion of that has actually been returned in cash. As a fund nears the end of its life and prepares to raise its next fund, it may care more about exits, secondary sales, or whether to keep investing in the next round.
š Thereās a similar contrast in AI: the middle market accounts for about 40% of AI spending and 30% of token usage, while frontier models make up only a small slice. When raising money, founders may need to look beyond an investorās reputation and ask which fund the money is coming from, when that fund was established, and whether it can continue to support them.
#VC #AI #åäøččµ #CryptoIndustry
š„ But that doesnāt mean smaller funds are better at picking winners. āOutlierā just means a company is unlike other companies in the market that have received fundingāit doesnāt mean itās more innovative or destined to succeed. Once foundersā backgrounds are factored in, the gap also narrows, to 19.8% versus 14.4%.
Honestly, what founders should really pay attention to is where a fundās money comes from and how much time it has left. Among the roughly 3,000 U.S. VC funds tracked by Carta, funds that began investing in 2017 are now nearly nine years old. Their median net DPI is just 0.37x, and even the top quartile is only at 0.70x. Only the top 10% have returned more than the original capital.
š” A high paper valuation doesnāt mean investors have received cash. The median paper value for 2017-vintage funds is 1.72x, but only a portion of that has actually been returned in cash. As a fund nears the end of its life and prepares to raise its next fund, it may care more about exits, secondary sales, or whether to keep investing in the next round.
š Thereās a similar contrast in AI: the middle market accounts for about 40% of AI spending and 30% of token usage, while frontier models make up only a small slice. When raising money, founders may need to look beyond an investorās reputation and ask which fund the money is coming from, when that fund was established, and whether it can continue to support them.
#VC #AI #åäøččµ #CryptoIndustry