AI Unicorn Mega Funding Depletes VC Capital, Top Firms Speed Up Fundraising Amid DPI Return Concerns

According to Dynamic Beating monitoring, top-tier venture capital firms represented by Founders Fund and Thrive Capital are accelerating their fundraising efforts, shortening the fundraising cycle from the traditional 2 to 3 years to less than two years. Due to frequent large-scale fundraising activities by model companies such as OpenAI and Anthropic, the venture capital funds are being depleted at a much faster rate than anticipated. Taking Founders Fund as an example, after raising $4.6 billion just last year, they have now started raising $6 billion this year, mainly because they have written substantial checks averaging $600 million to companies like OpenAI and Anthropic.

In the fundraising round of Anthropic, with a pre-money valuation of $900 billion and a target size of $65 billion, each of the four lead investors contributed over $2 billion. In order to participate in follow-on investments, venture capital firms have had to utilize a significant portion of their funds, and limited partners (LPs) have even diverted funds from the mining and private equity sectors to support these flagship funds.

However, the rapid deployment of capital has also raised concerns about buying at market tops. Howard Morgan, Chairman of B Capital Group, warned that deploying funds within a year would mean missing the opportunity to invest at a valuation nadir, significantly reducing the return on investment. Data from Carta shows that the cash distribution rate (DPI) in the venture capital industry is still at a historical low. Funds that started investing in 2021 and were in the top 10% in performance have only returned 16% of the principal, while mid-tier funds have a zero return rate.

The incentive driving venture capitalists to take on such risks is the anticipated initial public offerings (IPOs) of OpenAI and Anthropic scheduled for this year. In order to participate in the final round of private fundraising before the IPO, some venture capitalists have advanced their fundraising plans from 2027 to now, and are actively seeking new funding sources such as overseas sovereign wealth funds. For instance, a16z, which has already received investment from the Saudi Public Investment Fund (PIF), stated last week that they are establishing new partnerships with several undisclosed overseas sovereign wealth funds.