Study of 395 PE funds: VC returns fall with fund size, and fundraising success doesn't predict performance
MartinGTobias · x · 2026-09-30
Citing the 2024 paper "Limited Partners versus Unlimited Machines," Martin Tobias highlights two findings from an analysis of 395 private equity funds: venture returns decline with the scale of capital deployed, consistent with empirical evidence on diseconomies of scale; and — a new result — fundraising success is unrelated to future performance. LPs over-weight signals like interim MOIC/IRR, fund size and vintage, speed of close, and oversubscription. The findings likely apply even more to the more opaque, unstable VC market. His takeaway: invest early.
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