Carta Venture Capital Report: Elite Funds Widen the Gap as $19 Billion Sits Undeployed

The venture capital landscape remains a profoundly top-heavy arena where a handful of elite performers are aggressively widening their lead over the rest of the market. According to the latest performance analysis from Carta, which evaluated data from 2,906 funds spanning vintages from 2017 to 2025, the industry is defined by extreme outliers. For limited partners (LPs) and startup founders, the data underscores a stark reality: a small fraction of breakout startups is driving the outsized outcomes that define success for top-tier investors, while median funds struggle to deliver meaningful multiples.

This growing disparity is most evident at the upper end of fund returns. For 2019 vintage funds, the 90th percentile Total Value to Paid-In (TVPI) capital reached 3.01x by the end of 2025, completely eclipsing the 75th percentile's 1.9x. The gap between the top-decile and top-quartile results is massive compared to the lower end of the curve, where the median sits at just 1.33x and the 25th percentile barely breaks even at 1.02x. This distribution perfectly illustrates venture capital's core dynamic: a select few companies deliver 100x or 1,000x returns, offsetting the vast majority of investments that yield modest or zero gains.

Despite the harsh concentration of wealth at the top, the broader market showed several encouraging signs of recovery in Q4 2025. Median net Internal Rates of Return (IRR) for the 2021 and 2022 vintages finally escaped the red, moving into positive territory at 1.4% and 0.7%, respectively. Older portfolios are performing predictably better; vintages from 2017 to 2020 are now showing at least a 4.2% median IRR. This aligns with the classic venture capital J-curve, where early negative returns eventually give way to appreciation as the underlying startups mature and exit.

Distributions to Paid-In capital (DPI) are also accelerating, providing much-needed liquidity to LPs. Over half of the 2020 vintage funds have now recorded some DPI, with roughly 15% initiating their very first payouts in 2025. The momentum is trickling down to newer funds as well, with approximately one-third of 2021 funds beginning to return capital. For the 2022 and 2023 vintages, that figure currently stands just under 25%.

While distributions are flowing, venture capitalists are sitting on massive piles of undeployed capital. Dry powder levels remain highly elevated in newer funds, indicating a cautious deployment environment.

• Undeployed Capital: The 2025 vintage still holds 72% of its $12 billion in committed capital unspent. The 2024 cohort retains 53%, and 2023 funds have 35% remaining. Combined, these three vintages account for more than $19 billion in dry powder.
• Deployment Rates: As expected, older funds are heavily deployed. The 2021 funds hold just 16% unspent capital, with pre-2021 vintages showing minimal dry powder variation.
• Capital Concentration: Roughly 89% of all VC funds manage under $100 million. However, the vehicles over $100 million - representing just 11% of the total - control a staggering 52% of the $120.7 billion in aggregate commitments.
• Fund Sizes: The $25 - 100 million segment commands the largest absolute capital pool at $40.7 billion. Meanwhile, 36% to 38% of new vehicles fall into the micro-fund range of $1 - 10 million.

Carta's Q4 2025 update paints a picture of a maturing yet highly asymmetric asset class. The slight shift in capital allocation away from mega-funds - dropping to 56% in 2025 from 62% in 2024 - suggests that LPs might be diversifying slightly into specialized or emerging managers. However, the median LP counts have held steady or declined modestly, particularly among larger vehicles, indicating that institutional investors are consolidating their bets with proven winners.

For the broader tech and business ecosystem, this data confirms that average performance in venture capital is essentially a failure. The asset class relies entirely on exceptional, rare outcomes. As newer vintages continue to build value and slowly return capital, the ultimate winners of the post-2021 correction remain undecided. But one thing is clear: the pursuit of the next 1,000x startup is more competitive - and more concentrated - than ever.