How much money do VCs have left to invest?
We often hear that venture capitalists have "hundreds of billions" in dry powder to splurge on startup founders. But of course each individual fund can only spend the capital it has under management.
This pace of capital deployment is pretty sensitive to the general climate around startups. Funds started in 2021 had invested 35% of their committed capital by the end of year 1, indicative of a frenzied dealmaking pace.
Funds in vintage year 2024 had deployed 25% in year 1, a slightly more considered investment rate. And funds started in 2023 were even more deliberate in their first year.
Data below is from 1,123 US VC funds that use Carta as their fund admin. We narrowed this scope to include only funds with $1M-$100M to invest.
𝗡𝗼𝘁𝗲𝘀
Reserve ratio plays a role here - if the fund in question plans on reserving 20-30% of their capital for follow-on rounds, then getting to 70% deployed is basically done in regards to net new investments.
Capital concentration in a specific year increases volatility of returns. If you invested all your capital at the peak of 2021 prices, chance are your fund isn't performing as well as you hoped today.
Conversation with LPs often center around deployment pace. Too fast and too slow are both worrisome in their own ways.
Founders should feel empowered to ask VCs where they are in the funds' lifecycle. If you're taking a lot of meetings with VCs that have tiny percentages of their funds left...are you wasting time?
Gearing up to release Carta Fund Performance benchmarks for 2,000+ funds in the coming weeks. Can't miss data if you're a fund I-IV manager! Give me a shout in the comments for a waitlist link.
#venturecapital #VCfunds #capitalpace #startups #founders
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
