VC RETURNS REVEALED: Recent Thrive & Notable Funds in a League of Their Own at UTIMCO

Key Takeaways

• Thrive Fund VIII IRR 126% driven by OpenAI bets
• Notable Capital 2023 fund IRR jumped to 96% from -48%
• Sequoia 2020‑21 funds show modest IRR gains, 14.78% evergreen
• HongShan and Peak XV vintages remain negative amid China slowdown
• VC paper gains now 70% of decade‑long profits per Altimeter

Summary

UTIMCO’s latest disclosures reveal that several recent venture funds have generated extraordinary internal rates of return, driven largely by AI‑focused investments. Thrive Capital’s 2022 fund posted an IRR above 126% thanks to stakes in OpenAI, Cursor, Ramp and Base Power, while Notable Capital’s 2023 fund surged from –48% to 96% after backing Anthropic. Sequoia’s newer evergreen fund posted a modest 14.78% IRR, contrasting with under‑performing Chinese‑focused HongShan and Peak XV vintages. Altimeter estimates that AI‑related deals now account for roughly 70% of VC profits over the past decade.

Pulse Analysis

The power‑law nature of venture capital is starkly illustrated by UTIMCO’s recent return data, where a handful of AI‑centric bets have propelled fund performance to historic levels. Thrive Capital’s 2022 vintage, buoyed by early stakes in OpenAI and other high‑growth startups, posted an IRR exceeding 126%, while Notable Capital’s 2023 fund rebounded from a deep negative to a 96% IRR after its exposure to Anthropic. These figures underscore how generative‑AI breakthroughs are compressing value creation timelines, turning what was once a slow‑burn investment into rapid, paper‑gain heavy returns.

However, the headline numbers mask a nuanced reality. Most of the reported IRRs stem from valuation mark‑ups rather than realized exits, meaning they remain vulnerable to market corrections or a slowdown in AI funding cycles. Sequoia’s evergreen fund, with a 14.78% IRR, demonstrates a more tempered growth trajectory, reflecting diversified exposure beyond the AI hype. Conversely, funds tied to Chinese and Indian markets, such as HongShan and Peak XV, continue to struggle, highlighting regional macro‑economic pressures and the uneven global impact of AI adoption.

For limited partners, the data signals both opportunity and caution. The concentration of returns in a few AI‑driven bets suggests that future LP allocations may increasingly favor managers with proven access to frontier technologies. Yet the reliance on unrealized valuations raises concerns about downside risk if the AI bubble deflates. As venture capital firms recalibrate their strategies, monitoring realized cash‑flows versus paper gains will become essential for assessing true portfolio health and guiding capital deployment in an era where AI can dominate profit narratives.