Key Takeaways
- • Carta's analysis of 2,906 venture capital funds (2017–2025 vintages) confirms the industry operates as a winner-take-most market, with top-decile performers achieving 4.08× TVPI in 2017 vintage funds versus 1.89× at the median—a gap that widens significantly at the upper end of the distribution.
- • The 90th percentile TVPI for 2019 vintage funds reached 3.01× by year-end, compared to just 1.9× at the 75th percentile, demonstrating that performance concentration intensifies among elite funds while disparities narrow below the median.
- • A small number of breakout companies delivering 100× to 1,000× returns drive outsized outcomes; elite funds capturing just one or two such outliers post exceptional multiples that offset portfolio underperformers and cement their competitive advantage.
- • Median net IRRs for 2021 and 2022 vintage funds turned positive in Q4 2025 at 1.4% and 0.7% respectively, while earlier vintages (2017–2020) show at least 4.2% median IRR, confirming the classic J-curve pattern as portfolios mature.
- • The structural disparity between top-decile and median returns dwarfs gaps lower in the performance distribution, reinforcing venture capital's concentration dynamic where elite investors widen their lead over the broader pack.
Summary
Carta's latest analysis of venture capital fund performance exposes a profoundly top-heavy industry where elite performers are widening their lead over the broader market. Drawing on data spanning 2,906 funds with vintages from 2017 to 2025, the report quantifies performance concentration with precision: the 2019 vintage cohort shows a 90th percentile TVPI of 3.01× compared to 1.9× at the 75th percentile—a 111-basis-point spread that illustrates how sharply returns diverge at the upper end of the distribution.
The disparity is most pronounced between top-decile and top-quartile performers. In 2017 vintage funds, the 90th percentile achieved 4.08× TVPI versus 2.53× at the 75th percentile and 1.89× at the median. Critically, the spread between top-decile and 75th percentile results far exceeds the gaps lower in the distribution—between the 75th and 50th percentiles (1.33×) or the 50th and 25th percentiles (1.02×). This pattern repeats consistently across every vintage from 2017 to 2024, underscoring that venture capital's performance hierarchy concentrates at the apex rather than distributing evenly across tiers.
The root cause reflects venture capital's fundamental operating dynamic: a small number of portfolio companies deliver outsized returns of 100× to 1,000×, while the majority generate modest gains or losses. Carta's analysis emphasizes that funds capturing even one or two such outlier companies post exceptional multiples sufficient to offset underperforming investments across their entire portfolio. This dynamic creates a structural winner-take-most environment where top-tier investors compound advantages by securing access to breakout opportunities that more than compensate for their broader portfolio performance.
Encouraging momentum emerged in Q4 2025, with median net IRRs for 2021 and 2022 vintage funds finally entering positive territory at 1.4% and 0.7% respectively. Earlier vintages spanning 2017–2020 already demonstrate at least 4.2% median IRR, consistent with the classic J-curve pattern where early-stage negative returns give way to appreciation as portfolios mature and portfolio companies mature through growth and exit cycles. These inflection points suggest that recent vintage funds are normalizing performance trajectories after the market headwinds of 2022–2023, though the broader industry structure—concentration among elite performers—remains intact.
The disparity is most pronounced between top-decile and top-quartile performers. In 2017 vintage funds, the 90th percentile achieved 4.08× TVPI versus 2.53× at the 75th percentile and 1.89× at the median. Critically, the spread between top-decile and 75th percentile results far exceeds the gaps lower in the distribution—between the 75th and 50th percentiles (1.33×) or the 50th and 25th percentiles (1.02×). This pattern repeats consistently across every vintage from 2017 to 2024, underscoring that venture capital's performance hierarchy concentrates at the apex rather than distributing evenly across tiers.
The root cause reflects venture capital's fundamental operating dynamic: a small number of portfolio companies deliver outsized returns of 100× to 1,000×, while the majority generate modest gains or losses. Carta's analysis emphasizes that funds capturing even one or two such outlier companies post exceptional multiples sufficient to offset underperforming investments across their entire portfolio. This dynamic creates a structural winner-take-most environment where top-tier investors compound advantages by securing access to breakout opportunities that more than compensate for their broader portfolio performance.
Encouraging momentum emerged in Q4 2025, with median net IRRs for 2021 and 2022 vintage funds finally entering positive territory at 1.4% and 0.7% respectively. Earlier vintages spanning 2017–2020 already demonstrate at least 4.2% median IRR, consistent with the classic J-curve pattern where early-stage negative returns give way to appreciation as portfolios mature and portfolio companies mature through growth and exit cycles. These inflection points suggest that recent vintage funds are normalizing performance trajectories after the market headwinds of 2022–2023, though the broader industry structure—concentration among elite performers—remains intact.
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