Key Takeaways
- • Venture capital funds posted a significant performance recovery in early 2026, with median net Total Value to Paid-In (TVPI) capital rising across nearly all tracked fund vintages from 2017 to 2024, according to Carta's analysis.
- • The rebound represents a marked reversal from declines observed approximately three years ago, when TVPI metrics for 2017–2020 vintage funds contracted sharply, particularly affecting the 2018 cohort.
- • Rising startup valuations are the primary driver of portfolio appreciation, with unrealized holdings in VC funds benefiting from increased asset values across all funding stages over the past six quarters.
- • Realized returns remain constrained: median Distributed to Paid-In (DPI) capital for 2019–2020 vintage funds hovers just above zero, with fewer than half of funds in those cohorts having distributed any capital to limited partners.
- • Only a small fraction of mature 2017–2018 vintage funds have achieved 1x DPI, the breakeven threshold where limited partners begin realizing profits beyond their initial capital commitments, underscoring a persistent gap between paper gains and actual cash liquidity.
Summary
Venture capital fund performance has entered a pronounced recovery phase in early 2026, reversing a multiyear contraction that had pressured the asset class. According to Carta's latest performance analysis, median net TVPI has climbed consistently across nearly all tracked fund vintages spanning 2017 through 2024, signaling renewed confidence among general partners and limited partners after a period of operational headwinds.
This upward trajectory marks a significant inflection point. The positive momentum has persisted across the past six quarters, establishing a clear reversal of the decline cycle that began roughly three years ago. Vintage funds from 2017 to 2020 had experienced meaningful TVPI contractions during that earlier period, with the 2018 cohort suffering particularly acute drawdowns. The shift reflects stabilization in the venture ecosystem following a volatile period of valuation compression and portfolio rebalancing.
The recovery is fundamentally driven by rising startup valuations across funding stages. As portfolio company valuations have climbed substantially from levels recorded six quarters prior, the unrealized holdings embedded within VC fund portfolios have appreciated accordingly. This dynamic has lifted both median and top-percentile TVPI figures, creating a more favorable environment for fund performance reporting and positioning.
However, this narrative of recovery contains an important caveat: realized returns remain subdued. Measured by Distributed to Paid-In (DPI) capital, actual cash distributions to limited partners remain minimal for most recent vintage funds. The 2019 and 2020 cohorts exemplify this challenge, with median DPI hovering marginally above zero and fewer than half of funds in these vintages having returned any capital whatsoever. Even more established 2017 and 2018 vintage groups show modest distributions, and only a small fraction have exceeded the 1x DPI threshold—the benchmark at which limited partners begin capturing returns exceeding their committed capital. This gap between paper gains and realized liquidity underscores the distinction between mark-to-market valuation improvements and the actual cash generation required to satisfy LP return expectations.
This upward trajectory marks a significant inflection point. The positive momentum has persisted across the past six quarters, establishing a clear reversal of the decline cycle that began roughly three years ago. Vintage funds from 2017 to 2020 had experienced meaningful TVPI contractions during that earlier period, with the 2018 cohort suffering particularly acute drawdowns. The shift reflects stabilization in the venture ecosystem following a volatile period of valuation compression and portfolio rebalancing.
The recovery is fundamentally driven by rising startup valuations across funding stages. As portfolio company valuations have climbed substantially from levels recorded six quarters prior, the unrealized holdings embedded within VC fund portfolios have appreciated accordingly. This dynamic has lifted both median and top-percentile TVPI figures, creating a more favorable environment for fund performance reporting and positioning.
However, this narrative of recovery contains an important caveat: realized returns remain subdued. Measured by Distributed to Paid-In (DPI) capital, actual cash distributions to limited partners remain minimal for most recent vintage funds. The 2019 and 2020 cohorts exemplify this challenge, with median DPI hovering marginally above zero and fewer than half of funds in these vintages having returned any capital whatsoever. Even more established 2017 and 2018 vintage groups show modest distributions, and only a small fraction have exceeded the 1x DPI threshold—the benchmark at which limited partners begin capturing returns exceeding their committed capital. This gap between paper gains and realized liquidity underscores the distinction between mark-to-market valuation improvements and the actual cash generation required to satisfy LP return expectations.
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