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The venture industry loves stories. Stories about pacing, about overhead, about GP alignment, about LP behavior, about who’s “lean,” about who’s “disciplined,” and about what makes a “healthy” fund. But most of those stories come from anecdotes, not data. Carta’s 2025 Fund Economics Report finally gives us actual visibility into how funds function today — across thousands of vehicles, vintages, and structures.

Once you break the findings apart, a clear hierarchy emerges. Some fundamentals are genuinely strong. Some trends are directionally encouraging. Some weaknesses require more discipline. And some uncomfortable truths are simply part of the structure of venture.

Below is a breakdown of the Great, the Good, the Bad, and the Ugly — each with a narrative explanation followed by the key data points that matter.

⭐ The Great

The core machinery of venture is more stable and aligned than people assume.

Despite the market reset and a tougher fundraising environment, the foundations of venture capital — LP reliability, GP alignment, and operational structure — remain remarkably strong. These are the parts of the model that continue to function even when markets tighten.

What’s happening:
LPs are still dependable. GPs are putting more capital at risk. Scale is driving efficiency. Smaller funds are operating with discipline. And fund operations are becoming more standardized. These aren’t small details — they’re the backbone of a functional asset class.

Key data from the report:
• 75%+ of capital calls are paid on time, even for 2022–2024 vintages.
• Median GP commitment: 1.7% for VC, 2.55% for PE.
• Operational costs:
 – $1M–$10M funds spend ~3.4% of fund size on ops.
 – $100M+ funds spend ~1%.
• Smaller funds (<$25M) call capital faster and more consistently.
• Infrastructure is modernizing: more third-party admin, automated calls, standardized reporting.

👍 The Good

Structural shifts aren’t necessarily positive or negative — but they’re reshaping how funds get built.

This is the middle ground. These trends don’t break anything, but they do change the fundraising dynamics, governance structure, and day-to-day management of funds. They represent the “new normal” emerging after the 2020–2021 cycle.

What’s happening:
Funds have fewer LPs. Anchors are taking larger positions. Individuals are becoming more important in micro-VC. Fee structures remain stable. And deployment curves across vintages are beginning to look more predictable.

Key data from the report:
• Median LP count: 23 LPs per 2025 fund (down from ~50).
• Anchor LP share: median anchor now contributes 22%+ of the fund.
• 40% of anchor LPs in $1M–$10M funds are individuals.
• Fee structures remain stable at 2% fees / 20% carry.
• Post-2020 vintages show more uniform deployment pacing.

😐 The Bad

Certain vintages, cost structures, and pacing patterns pose real performance risks.

This bucket represents the growing pains — issues that don’t break the model, but can drag down a fund’s ability to produce strong DPI or maintain healthy pacing. Most are solvable with discipline, but they require acknowledging how much the landscape has shifted.

What’s happening:
2022 funds are behind on deployment. Small funds lose meaningful value to overhead. Large funds are slowing their capital calls. And dependency on an anchor LP introduces fragility into the fundraising process.

Key data from the report:
• 2022 vintage deployment: only 67% deployed after four years (vs ~80% historically).
• $10M funds lose 3.4% to overhead — a real DPI drag.
• Funds >$250M show slower capital call velocity due to co-invest complexity and pacing.
• Anchor concentration: >22% of fund size from one LP = structural fundraising risk.

💀 The Ugly

The truths the industry avoids — but the data makes impossible to ignore.

These are the harsh realities that reveal how hard it is to run a small fund, how costly the early years really are, and how power dynamics have shifted toward anchors. They don’t make venture uninvestable — but they change how LPs should underwrite managers.

What’s happening:
Small funds aren’t lean. Fee drag wipes out early performance. Vintage risk is at its highest in two decades. And anchor LPs now hold outsized power in fund formation.

Key data from the report:
• Emerging managers (<$50M) often spend 5–7% of the fund on early-year ops.
• Early fee drag leads many young funds to start at –20% to –30% TVPI before markups.
• 2021–2023 vintages face the highest structural risk since the post-dot-com era.
• LP concentration gives anchors disproportionate influence on governance, economics, side letters, and limits.
• If an anchor walks, the fund may collapse.

The bottom line

Venture isn’t fragile. It’s just more transparent now. The stories that used to guide fund formation are being replaced by real data, and that’s a positive shift. The managers who internalize these dynamics and structure their funds accordingly will outperform over the long term. And LPs who underwrite based on the data rather than the mythology will build healthier, more resilient portfolios.

Link to Carta data here https://info.carta.com/rs/214-BTD-103/images/Fund-Economics-Report-2025.pdf 

And Peter’s newsletter here https://carta.com/subscribe/data-newsletter-sign-up/

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