Megafunds and Capital Concentration

• US VC funds raised $108.5B through Q3, with $500M+ funds taking 78.1% and a16z alone closing $23.8B
• Megafunds make up 6% of funds yet absorb 78% of LP capital
• Firms closing at least one fund fell from 927 in 2022 to 211 so far this year
• New funds dropped 67% from 2022 to 2025, as first time fund formation fell nearly 78% from 2021
• Three firms took 48% of all capital raised in H1 2026, and the top 10 deals drew a record 68% of deal dollars
• Layered SPVs charging fees as high as 18% show how far investors will go for OpenAI and Anthropic exposure
• Tranched mega rounds can carry a $1B headline while the lead’s effective entry valuation sits at $400M

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Liquidity, DPI and Returns

• Venture ranks as the top performing private asset class over the past year at 19.1%, per PitchBook Q2 2026
• Median 2017 funds have returned $0.37 in cash per dollar after nine years, with 2019 funds at $0.04
• Median DPI for 2021 to 2024 vintages sits at 0.00x, and LPs now pass on GPs with top decile paper marks but no cash back
• Net cash flow to LPs has run negative by $202B since 2022, while unicorns hold over $5.7T in largely unrealized value
• $1B+ rounds outran $1B+ exits nearly 8 to 1 last year, leaving a queue of 945 unicorns
• Anthropic, OpenAI and SpaceX IPOs could unlock $2T to $2.5T in fund attributable value
• PE fundraising fell 29% against a 3.6% VC decline, thinning the pool of mid-market exit buyers

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Emerging Managers and New Funds

• Pear VC closes a $333M Fund V targeting about 125 pre-seed and 50 seed companies
• Mu Ventures closes a $15.5M pre-seed and seed Fund II anchored by AngelList Asset Management
• PSV closes a €56M Fund II
• Emerging managers deliver some of the strongest returns yet struggle to raise, prompting proposals on back-office support, follow-on infrastructure and standardized diligence
• 75 UK ecosystem organisations back an open letter calling for a US-style ERA exemption to enable micro funds
• Median fund returns rise from 1.57x at 10 portfolio companies to 1.92x at 40, strengthening the case for wider portfolios
• The median nine-figure fund now has 44 LPs, down 45% in four years

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AI Deal Flow and Notable Rounds

• ⁠AI accounted for 77% of global deal value in H1 2026, a half year that already surpassed all of 2025
• Arda Industries raises a $160M Series A at $1.5B to modernise American manufacturing
• Daytona raises a $60M Series B at $1B led by FirstMark to build the agent cloud
• Opsin raises $21M to expand risk protection for enterprise AI agents
• Qualitate raises a $25M Series A led by Insight Partners after 10x run-rate growth this year
• Prism Data raises a $20M Series A as cash flow underwriting reaches mainstream lenders
• Median Series A checks climbed from $4.5M to $19.4M, cutting the funds able to lead them from 200 to 50

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AI in Fund Operations and Investor Rankings

• ⁠AI agents migrate 3 VC funds, 210+ LPs and 6,000 documents in one weekend, work that previously took three months
• Delta-v cuts quarterly reporting from a week across 28 spreadsheets to a single prompt
• LPs discount a GP’s claimed AI edge unless they can see it working in practice
• G2’s Investor Leaderboard ranks Sequoia first at 78, with Insight Partners holding the most category Leaders at 153
• The Strebulaev-Jackson AI Venture Ranking scores 100 firms on AI value created, net of cost, dilution and decay
• A new open-source index tracks portfolio outcomes of 50 well-known investors across 29k+ companies

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Europe, Regional Gaps and Founder Signals

• ⁠Europe faces a €930B vs €150B VC gap as its savings and pension funds help finance US growth
• US VCs respond to deal intros within hours while many European VCs take days, costing them term sheets
• Invest-NL ranks third among European public investors with 64 rounds of $15M+
• Cherry Ventures’ Heartbeat 2026 finds 75% of European startups have solo founders and 93% never joined an accelerator
• Bay Area startups capture 34% of US pre-seed cash, while New York leads consumer and fintech and Boston leads biotech
• MENA early-stage deals hit a five-year low, threatening the 2028 to 2030 Series A pipeline
• All-female founding teams raised $3.74B through Q3, yet their market share fell to 0.7%

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Thanks to Nic Poulos, Olivia O’Sullivan, Jason Caplain, Scott Stanford, Nicole DeTommaso, Milad Alucozai, Ryan Baird, Chris Harvey, Pavel Prata, Jason M. Lemkin, Ivelina Dineva, Gary Benerofe, Amie Sheridan, Kevin Dowd, Patrick Ryan, Mackey Leventis, Carsten Fink, Bob McGrew, Ivan Burazin, James Pham, Sagar Kadakia, Jason Rosen, Adeo Ressi, John Gannon, Godard Abel, Ilya Strebulaev, Erik List, Sofia Fernandes, Florian Huber, Rinke Zonneveld, Robin Haak, Hamza Shad, Philip Bahoshy, Geri Stengel and everyone else who contributed insights to this edition. Find the full list of posts and voices on LinkedIn: https://www.linkedin.com/pulse/best-linkedin-cw-41-42-venture-capital-thomas-allgeyer-cxgme/?lipi=urn%3Ali%3Apage%3Ad_flagship3_detail_base%3BVz89%2BlniTR%2BYsoVj8ih3Xg%3D%3D