Tips on how to put money into enterprise capital with the rise of megafunds

A model of this text appeared in CNBC’s Inside Alts e-newsletter, a information to the fast-growing world of different investments, from non-public fairness and personal credit score to hedge funds and enterprise capital. Join to obtain future editions, straight to your inbox.

As capital turns into extra concentrated in non-public markets, megafunds in enterprise capital now dominate fundraising and investments, in accordance with new knowledge.

VC megafunds  – or these with greater than $1 billion in belongings – accounted for 72% of all deal worth within the first six months of 2026, in accordance with PitchBook. That was up from simply 25% within the first half of 2025. First-time managers accounted for less than 10%.

Megafunds are additionally crowding out a lot of the fundraising. Mega VCs raised $50 billion in capital within the first half, in comparison with $8 billion throughout the identical interval final 12 months. Totally 73% of all newly dedicated capital in enterprise capital this 12 months has gone to simply 5 megafunds, in accordance with PitchBook.

The rising energy and dominance of mega VCs is a component of a bigger winner-take-most shift in non-public markets and options. With AI requiring unprecedented quantities of capital, the VCs with the largest steadiness sheets have the most effective entry to startups and progress corporations. They’re additionally the largest winners within the current spherical of huge IPOs like SpaceX, which provides to their fundraising energy and creates a digital cycle that rewards scale.

For traders, the brand new power-law dynamics in enterprise capital has created new alternatives and challenges. With the bulge-bracket corporations the clear winners, selecting a VC has change into easier. On the similar time, gaining access to the massive funds, and paying their steep charges, has change into harder even for some massive household workplaces and ultra-wealthy traders.

“5 years in the past, many people had been evaluating how we take into consideration a billion-dollar enterprise fund measurement,” stated Theresa Hajer, head of U.S. enterprise capital analysis at Cambridge Associates. “Right now, that that may be the quantity a single agency is investing in a single spherical of a single firm.”

General, 2026 has been a banner 12 months for enterprise capital, which had fallen out of favor within the alts investing world. The IPO drought after 2022 left many enterprise capital funds with poor efficiency and an absence of exits. Buyers had been reluctant to speculate extra in VC funds, since they weren’t getting distributions.

The return of IPOs in 2026 and AI fundraises has sparked a VC revival. But it is dominated by a handful of super-sized firms elevating funds and a handful of VCs offering the cash.

OpenAI within the first quarter raised $122 billion at a valuation of $852 billion. Anthropic not too long ago raised $65 billion at a $965 billion valuation. 

SpaceX went public in June, debuting at a $2 trillion valuation and creating the most important liquidity occasion ever in public or non-public markets. Each Anthropic and OpenAI have filed preliminary registration paperwork with the Securities and Trade Fee to go public at valuations that would additionally attain $1 trillion. There are actually over 800 so-called unicorns, or non-public firms with valuations of greater than $1 billion, in accordance with PitchBook.

Whereas the AI craze and IPOs have unleashed a flood of capital each into and out of VC funds, each the inflows and outflows are much more concentrated than earlier cycles. Lots of the LPs, or traders, who rushed into enterprise capital over the past growth of 2021 and 2022 “have since left,” in accordance with PitchBook’s mid-year outlook.

They’re being changed by sovereign wealth funds and different large-scale traders who can commit massive quantities of capital. The result’s extra money from fewer traders, placing extra money into fewer funds, that are themselves investing extra money into fewer firms.

Together with the flexibility to put in writing larger checks, the megafunds even have extra flexibility in investing in each early and later rounds. Smaller funds, in contrast, are sometimes restricted to 1 technique.

Between 2024 and 2025, Andreessen Horowitz invested in additional than 300 seed and Collection A offers, in accordance with PitchBook. Within the first half of 2026, the tech-focused VC agency had made 74 seed, Collection A and Collection B offers, PitchBook discovered. Basic Catalyst, Lightspeed Enterprise Companions and Sequoia Capital accounted for a mixed complete of 104 offers within the first half.

In relation to fundraising, Thrive Capital closed its $10 billion Thrive X fund, Sequoia Capital closed a $7 billion late-stage AI fund, Andreessen Horowitz closed a $6.75 billion progress fund and Peter Thiel’s Founders Fund closed its $6 billion Development IV fund, its largest ever.

Extra VC funds are additionally holding onto their stakes longer within the firm’s lifetime.

Hajer stated a giant driver of the focus is profitable corporations investing early in firms like SpaceX or OpenAI, and driving these successes to large valuation will increase.

“A lot of the dimensions of those platform corporations have been inside progress funds, which have continued to fund that variety of firms, which has pushed a number of the focus,” she stated.

Buyers want to contemplate quite a lot of points in relation to investing in at this time’s VC panorama. She stated traders who need outperformance want some publicity to enterprise capital, and a few of the megafunds are “properly positioned to present you that publicity.”

Alternatively, traders want to contemplate the chance profiles, succession plans and exit choices for every of the corporations. Buyers additionally need to search for VC funds that had been early traders within the firms you need publicity to, moderately than leaping on the bandwagon in later collection rounds.

“Individuals neglect that SpaceX was 20 years within the making,” Hajer stated. “So these corporations began as early stage corporations, inserting a few of these bets which have now continued to compound and change into winners.”

Whereas it might be tempting for traders to simply put their VC capital within the megafunds, she stated long-term, true diversification is vital. Together with betting on the hyperscalers and big AI startups, she stated traders must also search VC publicity to different progress sectors like biotech and healthcare.

“There are nonetheless nice alternatives in different sectors,” she stated. “You need to be desirous about the following 5 or 10 years.”