Global View – US Venture Fund Cycles Are Getting Longer. Much Longer.

For most of its modern history, venture capital has operated on a well-worn timeline: raise a fund, deploy it over three to five years, return capital in eight to ten. That rhythm is now breaking down, not because of any particular crisis, but because of how the market itself has evolved. According to data from Silicon Valley Bank’s State of the Markets H1 2025 report, top quartile funds are now taking between 16 and 20 years to fully return capital to their limited partners. The old 10-year cycle is increasingly a legal placeholder, not a lived reality.

This shift is visible across multiple dimensions. SVB analysis of distributions and residual values shows that many top-performing funds cross the breakeven line only in years 13 through 16, and even then, a significant portion of capital remains unrealized. In funds with vintage years between 2010 and 2015, a large share of value is still held as unliquidated positions. The data indicates that even as distributions to LPs begin, full liquidation may stretch well into the fund’s second decade.

This extended timeline is not an anomaly, it is increasingly the new normal. SVB’s data shows that capital is being returned later even among successful funds, underscoring a structural rather than cyclical shift in venture’s liquidity profile.

The J-curve, long used to describe the early dip and eventual upside in fund returns, is now visibly flatter and longer. What used to be a 7-10 year arc is now playing out over 15-20 years in many cases, even for well-managed, top-quartile funds. For LPs relying on predictable liquidity to fund future commitments, this poses significant cash flow planning challenges.

Part of the reason is that portfolio companies are staying private longer. With large funds investing at the late stages, companies are able to stay private longer. The average age of a venture-backed unicorn in the United States is now 10.3 years, just four months less than the average age of tech IPOs, as noted in SVB’s 2025 report. With IPO markets offering fewer windows, and secondary markets remaining selective, exits take longer to materialize. The capital is patient because it has to be.

At the same time, fundraising cadence has also slowed. During the 2020–2021 boom, many firms raised new funds every 10 to 15 months. That pace has more than doubled. In 2024, the median time between funds in the same series was 24 months, with the middle 50 percent of firms reporting ranges from 20 to 34 months. These longer gaps are not only a function of deployment discipline, but also a reflection of uncertain markups and muted exit activity. According to SVB, while this is a reversal from the record-low intervals seen in peak years, the current timeline is still historically short when viewed over multiple cycles.

None of this implies that LPs are exiting the category. SVB notes that despite extended timelines and lower interim distributions, capital continues to flow into venture, albeit with tighter scrutiny and longer commitment expectations. Venture firms raised at the peak may still be in year three or four of a 16-year arc. Judging them prematurely, particularly on DPI metrics, risks misunderstanding the trajectory of value creation.

The broader point is structural. Venture capital is becoming a longer-duration asset class. It resembles private equity more than ever before: capital is concentrated, liquidity is deferred, and the pace of realisation is defined more by market architecture than manager intent. For general partners, this demands operational flexibility and long-term engagement. For limited partners, it requires a shift in mindset, from expecting returns within a decade to underwriting outcomes that may take much longer to arrive.

It also requires a shift in how performance is communicated. GPs can no longer point to high interim NAVs as proof of success. Instead, there’s growing pressure to demonstrate actual cash outcomes, realistic exit paths, and operational value creation in the absence of liquidity.

Moreover, this timeline elongation is changing how firms think about reserves and follow-on capital. With longer holding periods, GPs need to manage capital more conservatively, maintaining reserve ratios that can stretch well beyond the traditional 3-5 year investment period.

For new managers, this presents a dilemma. They must simultaneously build a track record, maintain investor confidence, and operate within a cycle that may not deliver headline exits within the first fund life. First-time GPs could be waiting a decade before seeing liquidity, putting even more emphasis on early fund construction and LP education.

Note: The data presented here is based on U.S. venture capital markets. The fund lifecycle analysis, fundraising cadence, and distribution timelines reflect patterns observed among top-quartile U.S. VC funds, as reported by Silicon Valley Bank in their State of the Markets H1 2025. While some of these dynamics may be directionally relevant to other geographies, particularly emerging markets, the underlying benchmarks and timeframes are specific to the U.S. context.

For a deeper perspective on India’s evolving investment environment, Macro Memo – April offers a sharp take on the macroeconomic signals shaping capital flows, while The Private Market Compounding Effect unpacks why patient capital and long-duration strategies are increasingly outperforming in private markets.

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