U.S. venture capital rankings highlight extreme return concentration

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Highlights

Sequoia Capital, Andreessen Horowitz, Accel, DST Global, and Tiger Global top new long-term U.S. venture capital rankings based on 230,000 investments over 30 years.
About 90 per cent of industry profits are generated by just 5 per cent of firms, with 62 of the top 100 based in California, highlighting extreme return concentration.
Large VC firms are investing more in late-stage companies like SpaceX, OpenAI, and Anthropic, blurring boundaries with private equity and fund management.

New rankings map long-term venture performance

As reported by Financial Times, a new analysis by Ilya Strebulaev of Stanford Graduate School of Business and Blake Jackson of The Ohio State University ranks the top 100 U.S. venture capital firms using six core data points drawn from 230,000 investments made by nearly 13,000 investors over 30 years.

The results place Sequoia Capital, Andreessen Horowitz, Accel, DST Global and Tiger Global in the top five, reflecting the advantage that established firms often have in winning access to sought-after deals. The study also shows the geographic weight of California in the sector, with 62 of the top 100 firms based there.

The broader backdrop remains highly selective. Less than 0.1 per cent of new businesses receive venture capital funding, based on a recent World Economic Forum report, yet VC-backed U.S. start-ups that have listed publicly account for 42 per cent of total stock market capitalisation.

Power Law shapes returns and future risks

The rankings suggest that venture capital returns are even more unevenly distributed than many investors may assume. About 90 per cent of the industry’s profits are generated by just 5 per cent of firms, confirming that the Power Law applies not only to start-ups but also to the managers backing them.

That concentration raises practical challenges for institutional investors, many of whom struggle to gain entry to top-tier funds. It also complicates performance comparisons because firm-level results can mask wide variation between individual funds, while opaque valuation practices continue to make the sector hard to assess.

The analysis comes as some large venture firms increase their exposure to fewer and larger late-stage companies, including SpaceX, OpenAI and Anthropic. That trend is blurring the lines between venture capital, private equity and traditional fund management, while leaving room for smaller emerging firms to stand out as more pure venture investors.

Our earlier report on FTSE Russell’s major index reconstitution explained how the reshuffle can trigger unusually heavy trading as funds rebalance ahead of the new benchmark lineup. We noted SpaceX’s fast-track move into the Russell 1000 and broader value/growth reclassifications across megacaps and smaller companies, alongside sector impacts tied to technology and AI-linked stocks.

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