Markups, safes and valuation hygiene

In another special solo episode, Peter Walker dives deep into Carta's Q2 Fund Performance Report to unpack the data on what's really happening inside venture capital today.

Peter walks through the critical benchmarks every GP and LP needs to know, from median and top-decile Net IRR, TVPI, and DPI across different vintages and fund sizes. He explains why the 2021 vintage is struggling, why small funds have higher performance dispersion, and how liquidity pressure is (or isn't) impacting GP behavior.

He also introduces the single biggest theme defining venture in 2025: Concentration. Peter breaks down how this theme is affecting AI funding, geography, lead investor ownership, and even bridge rounds. Plus, he answers pre-submitted questions on follow-on strategy, liquidation preferences, and how to stand out to LPs in a crowded market.

Q2 2025 VC Fund Performance Report:
https://carta.com/data/vc-fund-performance-q2-2025/

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02:03 – Chart 1: The VC fund universe (Fund sizes) 
02:47 – Chart 2: Dry powder by fund size
03:12 – Chart 3: Dry powder by vintage year
04:14 – Chart 4: The hollowing middle of venture
05:08 – Chart 5: LP count by fund size
06:09 – Why are there fewer LPs in recent vintages?
07:07 – Chart 6: The rise of the anchor LP
07:51 – Digging into fund performance
08:11 – What LPs really want to see (Net performance)
09:03 – Chart 7: Net IRR by vintage year
10:21 – Chart 8: IRR J-Curve (Why 2021 is struggling)
11:59 – Chart 9 & 10: Top Quartile & Top Decile IRR
13:05 – Chart 11: Do smaller funds outperform larger funds?
14:55 – Chart 12: TVPI benchmarks (Median vs. Top Decile)
15:34 – Chart 13-15: TVPI over time (Median, Top Quartile, Top Decile)
16:50 – Why 3x net is a Top 10% goal, not Top Quartile
17:15 – Chart 17: DPI (Money back to investors)
18:26 – Chart 18: The psychology of liquidity (DPI > $1)
20:01 – The broad venture context: Fundraising improves
20:48 – Chart 20: The persistence of bridge rounds
21:48 – Chart 21: Down rounds are decreasing
23:04 – Are fund marks based on SAFEs? (No)
23:55 – Chart 22: Time between rounds
24:49 – Chart 23 & 24: Seed-to-A & A-to-B graduation rates
27:39 – The 2025 Theme: Concentration
28:05 – Concentration 1: The AI Boom
29:31 – Concentration 2: More cash, fewer startups
31:33 – Concentration 3: Lead investors are taking more
32:52 – Concentration 4: "Preemptive" bridge rounds
34:47 – Concentration 5: Geography (The Bay Area)
37:46 – Start: Pre-submitted Q&A
38:57 – Q1: Do mega-funds add value at seed?
40:42 – Q2: How much should small funds reserve for follow-ons?
42:47 – Q3: How common is investor-friendly structure? (Liquidation prefs)
44:32 – On signaling risk
45:35 – On LP pushback on fees & carry
46:50 – On the state of exits (M&A vs. IPO)
49:01 – On extended fund lifetimes (10 vs. 15 years)
50:08 – On "no fee, carry only" funds
53:10 – Key takeaways for fundraising GPs: Distinctiveness is key

This presentation contains general information only and eShares, Inc. dba Carta, Inc. (“Carta”) is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services, and is for informational purposes only.  This presentation 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. © 2025 eShares,