Reopening in 2026 after a 3-year freeze. 94 US IPOs in 2025, pipeline building for H2 2026. This is unlocking DPI for 2018–2020 vintages that were trapped.

Most 2021-vintage funds have taken 30–50% markdowns from peak. Median TVPI stabilized at ~1.1x in Q1 2026. Bottom-quartile funds at 0.6x — many won't return capital.

Funds deployed at lower valuations (40–60% discount to 2021 peaks) are showing early strength. 2022 vintage is outperforming 2021 at same stage by 20–30%. Disciplined entry prices matter.

LP frustration at peak — average VC fund DPI at year 8 has dropped from 1.3x (2010s avg) to 0.7x. GPs face re-up pressure: LPs demanding distributions before committing to next fund.

VC secondary volume hit $152B in 2025, up 45% YoY. LPs using secondaries to generate liquidity. Discounts narrowing from 30–40% in 2023 to 10–20% in 2026 as buyer demand increases.

AI-focused funds from 2022–2023 vintage showing 40–60% higher TVPI than generalist funds at same stage. LPs allocating 25–30% of VC commitments to AI-specific strategies, up from 8% in 2020.

The primary performance metric — total value of remaining portfolio plus distributions, divided by total capital called. Top-quartile funds targeting 3x+ TVPI by end of fund life. Median VC funds return 1.5–2.0x.

Cash actually returned to LPs divided by capital invested. DPI is the 'proof of concept' metric. Most funds don't hit meaningful DPI until years 7–10. Top-quartile 2015–2018 vintage funds show 1.5–2.5x DPI.

Internal rate of return after management fees and carry. The J-curve effect means early vintages show negative IRR before rebounding. Top-quartile net IRR historically runs 20–30%+ for mature funds.

Unrealized portfolio value divided by paid-in capital. High RVPI relative to peers signals either strong portfolio or slow realization. In the 2021–2023 markdown era, many funds saw RVPI compress by 20–40%.

VC funds typically show negative returns in years 1–3 (fees drag, no exits) before turning positive. A flat J-curve suggests a disciplined manager. Most institutional LPs expect breakeven by year 4–5.

Only ~30–35% of top-quartile VC funds repeat top-quartile performance in their next fund, per Cambridge Associates. Unlike PE, VC has weaker performance persistence — making manager selection harder than it looks.

LPs compare VC net IRR to the S&P 500 PME — the return you would have gotten investing the same dollars at the same time in public markets. Top-quartile VC should beat PME by 300–500 basis points to justify illiquidity and fees. Median VC has historically struggled to beat PME consistently.

Unlike PE, VC performance persistence is weak. Per Cambridge Associates, only 30–35% of top-quartile VC managers repeat in their next fund. LPs that chase brand-name managers without diligencing per-fund performance often overpay for average returns.

Gross TVPI (before fees and carry) can be 40–60% higher than net TVPI. A fund showing 2.5x gross might deliver 1.7x net to LPs after 2/20 fee structure. Always benchmark on net figures when comparing across managers.

A large gap between TVPI and DPI signals unrealized risk. High-TVPI/low-DPI funds from 2020–2021 vintages have seen significant TVPI compression as markdowns hit. LPs now heavily weight DPI as the only auditable proof of returns.

When a manager raises 3x their prior fund, returns typically decline — it's harder to generate the same IRR deploying 3x the capital. The best VC returns historically come from discipline on fund size. Mega-fund multiples rarely exceed 2–2.5x TVPI.

Top managers reserve 40–50% of fund capital for follow-ons. A fund that deploys too fast without reserves risks dilution in up-rounds. Reserve ratio and follow-on strategy are often better predictors of final returns than initial portfolio quality.