Despite a major LP pullback from venture, an elite cohort of VC firms is still successfully raising huge sums of LP capital.
General Catalyst, a giant of Sand Hill Road that has led rounds for companies like Snap, Warby Parker and Deliveroo, is wrapping up a $6 billion VC fund, the Financial Times reported Sunday. Earlier this month, Andreessen Horowitz announced it had raised $7.2 billion across five fund strategies.
Assuming General Catalyst successfully closes its new vehicle on $6 billion, the two firms will have attracted a combined $13.2 billion—approximately 44% of the total LP capital committed to US VC funds since the start of the year, according to PitchBook data.
The General Catalyst vehicle, which will reportedly invest across a range of sectors and geographies including India and Europe, would be the firm’s largest fund to date, followed by its $4.6 billion Fund XI, which closed in early 2022 when fundraising from LPs was a simpler matter.
Some LPs have retreated toward top-tier venture firms in recent years or refused to sign on with new GPs, reflecting a slowdown in appetite for emerging managers.
LPs are often motivated by a perception that these high-profile firms have better access to premier deal flow and are reluctant to invest in younger firms with a shorter track record. So far in 2024, the top five largest US VC funds have raised $10.7 billion out of the total $23.7 billion closed across all new US VC funds, according to PitchBook data.
LPs tend to consider allocating to a name-brand fund less risky than to an emerging manager—even though the data is mixed. Returns from emerging managers are more volatile, but can offer higher upside if LPs pick correctly, according to PitchBook’s latest analyst note, Establishing a Case for Emerging Managers. The top decile of emerging VC funds has historically generated excess IRRs of 15.9%, more than 3 percentage points higher than that of established funds.
General Catalyst did not respond to a request for comment on its reported fundraise.
