US venture AUM has grown substantially, but most of it remains in portfolio value rather than deployable dry powder. US venture capital AUM components from the NVCA 2026 Yearbook public data pack. 2025 values are $299.3B of dry powder and $1,077.7B of remaining value.
US Venture AUM: Dry Powder Versus Remaining Value
US venture AUM has grown substantially, but most of it remains in portfolio value rather than deployable dry powder.
View chart data and assumptions
| Category | Dry powder | Remaining value |
|---|---|---|
| 2016 | 100.73$B | 278.37$B |
| 2018 | 131.66$B | 378.01$B |
| 2020 | 171.93$B | 625.95$B |
| 2021 | 225.2$B | 1014.58$B |
| 2023 | 318.21$B | 908.68$B |
| 2025 | 299.32$B | 1077.66$B |
Key Takeaways
- Venture has to fit the institution: The allocation should make sense alongside spending needs, liquidity requirements, long-term obligations, and governance capacity.
- Manager selection goes beyond brand: Institutions need to understand where performance came from and whether the same team and strategy can repeat it.
- Commitment pacing deserves its own model: Capital calls may continue while exits and distributions slow, creating pressure on an otherwise sound portfolio.
- Operations influence approval: Reporting, valuation, administration, governance, and conflicts are central parts of institutional diligence.
A Public Example
CalPERS' 2026 Private Equity Annual Program Review is a useful public example of how an institution frames private equity by role, allocation, manager count, fund exposure, geography, and performance.
- Institutional programs are built deliberately: The review shows private markets being evaluated as a program, not as a collection of isolated commitments.
- The practical lesson: Venture allocations need governance, pacing, reporting, and benchmark context before they can sit comfortably in an institutional portfolio.
- Useful number: CalPERS publicly notes that GP financial reporting can arrive 120 days after quarter-end, reinforcing why institutions need clear reporting processes.
Which Institutions Invest in Venture Capital?
Entity threshold: The SEC includes several entity types with more than $5 million of assets or investments in its accredited-investor framework. Legal eligibility should remain separate from portfolio suitability.
Institutional investors may include:
- Endowments and foundations: Often invest with long horizons but must account for spending policies and portfolio liquidity.
- Pension plans: Need to connect commitments to benefit payments, governance approvals, and broader asset-liability planning.
- Insurance companies: May face regulatory, capital, and asset-liability constraints.
- Outsourced CIOs and consultants: Build programs for clients with different objectives and internal resources.
- Sovereign or government-linked entities: May combine financial goals with formal policy and governance requirements.
- Institutional seeders: Back emerging managers while underwriting both the investment strategy and the development of the firm.
These institutions do not approach venture in the same way. Policy, governance, liquidity, and internal capacity shape the appropriate structure and commitment size.
The Role in Long-Duration Portfolios
Duration reference: Cambridge Associates characterizes private-investment capital as typically locked for 10 years or more. The allocation should be measured against spending and liability schedules of similar length.
Venture may support long-term growth objectives and provide exposure to companies before they enter public markets. The trade-offs are material.
- Illiquidity: Capital may remain invested beyond the manager's initial timetable.
- J-curve effects: Early fees, expenses, and investment losses can produce negative initial cash flows.
- Valuation uncertainty: Private-company marks involve judgment and may not translate into realized proceeds.
- Concentrated outcomes: A small number of companies may drive most of a fund's value.
The allocation should have a defined role alongside private equity, growth equity, private credit, real assets, and public markets.
Liquidity Planning and Commitment Pacing
Deployment evidence: At year-end 2025, Carta funds still held 72% of 2025-vintage capital, 53% of 2024-vintage capital, and 35% of 2023-vintage capital as dry powder.
Institutions should plan around realistic cash flows rather than assume that distributions will arrive on schedule.
- Capital calls: Estimate how much managers may request and when.
- Unfunded commitments: Track capital that has been promised but not yet called.
- Expected distributions: Model when proceeds may return under several exit environments.
- Fund extensions: Account for vehicles continuing beyond their initial legal term.
- Weak exit markets: Test whether the institution can fund calls when IPOs and acquisitions slow.
- Vintage diversification: Avoid concentrating too many commitments in one market environment.
Manager and Strategy Diversification
Concentration evidence: The 2025 US market's 487 megadeals represented 3.2% of deal count and 67% of value. Institutions should aggregate company exposure across managers.
Adding more funds does not automatically produce a more diversified allocation.
- Stage: Understand exposure across seed, early-stage, growth, and later-stage strategies.
- Sector: Identify shared industry and technology themes.
- Geography: Review regional market, currency, and regulatory concentration.
- Manager maturity: Balance the characteristics of emerging and established firms where appropriate.
- Access model: Combine fund, co-investment, direct, or secondary exposure intentionally.
- Company overlap: Look through manager labels to the underlying portfolio whenever possible.
Emerging Managers Versus Established Franchises
Neither category is automatically superior.
- Established franchises: May provide longer records, larger teams, developed reporting systems, and experience serving institutional LPs.
- Emerging managers: May offer greater focus, closer alignment, disciplined fund sizes, and access to less crowded opportunities.
In both cases, test individual attribution, team continuity, sourcing repeatability, fund-size fit, operational readiness, and references.
Governance, Valuation, and Conflicts
Institutional diligence should extend beyond investment selection.
- Decision process: How does the investment committee approve, monitor, and exit positions?
- Advisory committee: What rights do LP representatives have when conflicts or exceptional situations arise?
- Valuation policy: Who proposes and approves private-company marks?
- Cross-vehicle conflicts: How are opportunities and expenses allocated among funds, SPVs, and co-investments?
- Continuation vehicles: What protections apply when the manager sits on both sides of a transaction?
- Service providers: Assess administrator, auditor, counsel, and the quality of their work.
Reporting and Administration
Reporting should help the institution understand what changed in the portfolio and why.
- Capital accounts: Clear statements of contributions, distributions, and each LP's balance.
- Schedule of investments: Company-level cost, value, ownership, and realized proceeds.
- Performance: Gross and net measures with appropriate supporting context.
- Valuation movements: Explanations that distinguish operating progress from financing or methodology changes.
- Fees and expenses: Transparent reporting of vehicle-level costs.
- Risk and compliance: Material company events, concentration, and relevant governance issues.
Responsible-Investment Requirements
Some institutions operate under formal ESG, mission, exclusion, or other responsible-investment policies.
- Underwriting: How are relevant risks assessed and documented?
- Monitoring: What happens when a portfolio issue develops?
- Escalation: Who reviews material concerns and what actions are available?
- Governing documents: Material requirements should be reflected in enforceable terms rather than broad marketing claims.
Frontierspace Perspective
At Frontierspace, we approach private technology exposure at the level of the underlying opportunity.
- Company quality: Does the business justify long-term ownership?
- Entry point: Are the valuation and terms reasonable?
- Investor group: Who else is backing the company, and what does that indicate?
- Financing risk: How much additional capital may be required?
- Liquidity potential: What realistic exit paths and timelines exist?
- Alignment and reporting: Will institutional investors receive appropriate economics and dependable information?
We apply this thinking across venture, growth, and secondary opportunities.
CalPERS: changing the allocation before changing the deal flow
In March 2024, CalPERS approved an increase in its total private-markets target from 33% to 40% of plan assets. Private equity moved from a 13% target to 17%.
The decision covered private equity, private debt, and other private assets.
The prior target was 13%.
CalPERS cited this historical private-equity result when explaining the decision.
What it shows: The figures are specific to CalPERS and are not a suggested allocation. The institutional lesson is sequence: governance and strategic ranges should come before manager commitments, co-investments, and individual company exposure.
Primary sources: CalPERS, private-markets allocation decision (2024). Public transaction evidence only; this is not represented as a Frontierspace investment or result.
Frequently Asked Questions
Can smaller institutions invest in venture?
Some can: The appropriate structure depends on mandate, portfolio size, governance, liquidity, internal resources, and manager access.
Common routes include direct fund commitments, funds of funds, outsourced investment teams, and specialist managers.
What is the hardest part of institutional diligence?
Often, it is testing repeatability: Institutions need to connect a manager's claimed advantage to sourcing, selection, ownership, portfolio construction, and ultimately net LP outcomes.
Related reading: evaluating emerging VC managers and co-investments and secondaries. Also see venture capital commitment pacing.