For the second year in a row, a large majority of LPs in venture funds plan to invest the same amount in the asset class in the next 12 months as they did in the previous 12 months, according to our exclusive survey.
Venture Capital Journal surveyed 103 institutional investors between August and October 2025, with pension funds, insurance companies and family offices/high-net-worth individuals accounting for the largest share of respondents (64 percent combined). Most are based in North America (40 percent) and Western Europe (31 percent).
Hold steady
On the question of how much they plan to invest in the coming year compared with the prior year, 58 percent say “the same” (up from 55 percent in last year’s survey), 32 percent say “more” (down from 33 percent) and 10 percent say “less” (down from 12 percent). Those results are a significant improvement from two years ago, when 33 percent of LPs said they planned to invest less in VC, the highest figure in the history of the survey.
Optimism abounds
The warm feelings for VC are consistent with investors’ overall optimism about private markets. Fifty-seven percent say they plan to make “slightly more” or “significantly more” commitments to private markets funds in the next 12 months, a substantial gain from 48 percent a year earlier. About 13 percent say they plan to make “slightly fewer” or “significantly fewer” commitments to private markets funds, up from 10 percent the previous year.
Bad news for new managers
With muted performance expectations about their existing portfolios, LPs aren’t too excited about hearing pitches from emerging managers. Most (57 percent) respond “no” when asked if they would consider backing emerging VC managers in the next 12 months. That’s a big change from last year’s survey, in which 67 percent said “yes.”
Status quo
Investors aren’t eager to invest more in any particular VC strategy. When being asked how they would invest in three strategies in the next 12 months, they largely say they plan to invest the same amount of capital, with 66 percent giving that response for late/growth-stage, 66 percent for early-stage and 46 percent for seed-stage. Just 10 percent plan to invest more in late/growth-stage and early-stage and 7 percent in seed stage.
Performance improvement
For the second year in a row, LPs tell us their venture portfolios are underperforming. But that assessment shows improvement from our last survey. Fifty-three percent say their venture holdings “fell below” benchmarks in the past 12 months, compared with 63 percent who said the same a year earlier. Thirty-three percent indicate their VC funds “met benchmarks” (up from 28 percent) and 13 percent say they “exceeded benchmarks” (up from 9 percent). This is the third year in a row in which a minority of LPs report that their venture holdings exceeded their benchmarks in the previous 12 months. From 2020 to 2023, a sizable majority of investors reported outperformance.
On target
Most LPs (47 percent) say their VC portfolios are “at target allocation,” down slightly from 49 percent a year earlier. Thirty-three percent say they are “underallocated” (the same as our previous survey) and 20 percent say they are “overallocated,” a slight increase from 18 percent a year ago.
Poor returns taint asset class
For the first time in three years, LPs cite “returns have not lived up to expectations” as the main challenge they face when investing in venture capital. Thirty-one percent of investors give that response, up from 27 percent last year. “Unable to get allocations for best funds” was the second most popular response at 21 percent, down from 27 percent a year earlier.
The only other response that captures more than 10 percent of the vote is the “too hard to pick winners,” with 14 percent of LPs citing that reason, double the percentage from a year ago.
Low expectations
The optimism about performance expressed in last year’s survey has faded. Sixty-seven percent of LPs predict their VC funds will meet or exceed benchmarks in the next 12 months, a sharp drop from 81 percent in our prior survey.
The “will meet benchmark” response of 37 percent is the second-lowest figure in the past seven years.
In addition, 33 percent of respondents predict their venture portfolios will “fall below benchmark” in the next 12 months, up from 19 percent in the previous survey.
Methodology & demographics
For the 2026 study, we surveyed 103 institutional investors.
Fieldwork was carried out in August through October 2025. Participation is always anonymous. Pension funds account for the largest share (23 percent) of respondents, followed by insurance companies (21 percent), family offices/high-net-worth individuals (20 percent), funds of funds (11 percent), endowments/foundations (7 percent), corporations (7 percent), sovereign wealth funds (6 percent) and banks/financial services firms (6 percent). About 40 percent of respondents are in North America, 31 percent in Western Europe, 18 percent in Developed Asia-Pacific, 4 percent in the Middle East, 4 percent in Emerging Asia-Pacific, 2 percent in Latin America and 2 percent in Central/Eastern Europe.
