AI unicorns' massive financing exhausts VC funds, top institutions accelerate fundraising raises concerns about DPI returns According to Beating monitoring, top venture capital firms represented by Founders Fund and Thrive Capital are accelerating fundraising, shortening the fundraising cycle from the traditional 2-3 years to less than two years. Due to frequent large-scale financing by model vendors such as OpenAI and Anthropic, the consumption rate of venture capital funds far exceeds expectations. Taking Founders Fund as an example, it just raised $4.6 billion last year and has started raising $6 billion this year, mainly because it has issued huge checks averaging $600 million on seven companies including OpenAI and Anthropic. In Anthropic's pre investment valuation of $900 billion and financing of $65 billion, the four leading investors each contributed over $2 billion. In order to participate in co investment, venture capital firms have to use a large portion of their funds, and limited partners (LPs) even misappropriate funds from the mining and private equity sectors to support top tier funds. However, the rapid deployment speed has also raised concerns about buying at market highs. Howard Morgan, Chairman of B Capital Group, warns that investing funds within a year will miss the opportunity to lay out in valuation troughs and significantly lower returns. According to Carta data, the cash recovery rate (DPI) of the venture capital industry is still at a historical low. The top 10% of funds that started investing in 2021 have only recovered 16% of their principal, while midstream funds have zero returns. The incentive for venture capitalists to take risks is the expected initial public offerings (IPOs) of OpenAI and Anthropic within the year. In order to participate in the final round of private equity financing before going public, some venture capitalists have advanced their fundraising plans for 2027 and actively explored new sources of funding such as overseas sovereign wealth funds. For example, a16z, which has received funding from the Saudi Public Investment Fund (PIF), announced last week that it is establishing new partnerships with several unnamed overseas sovereign wealth funds. [Original link]