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VC returns improve on paper as distributions stay scarce
For 2021 vintage VC funds, average DPI is just 0.05x, and since 2022 net cash flow to LPs has been negative $202 billion.
Yahoo Finance, citing PitchBook data, said US venture capital returns have lagged other private strategies over the past four years partly because distributions have remained limited, limiting LPs' ability to redeploy capital or diversify across vintage years.
The reporting points to a divergence between performance and realized liquidity. PitchBook's Q2 2026 US VC Fundraising and Valuations report shows the average DPI for 2021 vintage funds at 0.05x, the lowest five-year DPI multiple this century, while a 17.1% one-year horizon IRR is described as reflecting valuation momentum more than realized exits.
Yahoo Finance also highlighted that capital concentration is skewing results, with four companies accounting for 93.5% of this year's exit value. It said distribution yield and net cash flow are more direct measures of realized liquidity, and that since 2022 net cash flow to LPs has been negative $202 billion despite continued increases in market value and AUM.
The outlet added that LP caution is reinforcing a “flight to quality,” concentrating capital into a smaller set of established managers with proven records, which may create advantages in competing for and potentially overpricing top deals.