Top venture firms like Founders Fund and Thrive Capital are raising money at a breakneck pace, shrinking their fundraising cycles from the traditional 2–3 years to under two. The culprit? Massive funding rounds from AI model makers like OpenAI and Anthropic are burning through VC capital faster than anyone expected. Founders Fund, for instance, raised $4.6 billion last year and is already back for $6 billion this year, after writing average checks of $600 million into seven companies including OpenAI and Anthropic.
In Anthropic's latest $65 billion round (at a $900 billion pre-money valuation), four lead investors each put in over $2 billion. To keep up, VCs are committing huge chunks of their funds, and limited partners are even shifting money from mining and private equity into top-tier VC funds.
But the rapid deployment has sparked worries about buying at market peaks. Howard Morgan, chairman of B Capital Group, warns that deploying all capital within a year means missing opportunities to invest when valuations are low — and sharply depressing returns. According to Carta, the VC industry's cash-on-cash return (DPI) remains at historic lows: funds started in 2021 that rank in the top 10% have only recouped 16% of their capital, while median funds have returned zero.
What's driving VCs to take the risk? OpenAI and Anthropic are both expected to go public this year, and firms are scrambling to get in on the last private rounds before the IPOs. Some VCs have pulled forward fundraising plans from 2027 to now, and are aggressively courting new sources like sovereign wealth funds. a16z, which already has backing from Saudi Arabia's Public Investment Fund (PIF), said last week it's working to build new partnerships with several unnamed overseas sovereign wealth funds.