ALL INPredictions
Last updated Nov 29, 2025
Prediction
Chamath
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Chamath @ 00:35:03Inconclusive
ventureeconomy
Venture capital funds whose main investing vintages are 2023–2025 will, in aggregate, produce unusually strong, power-law-type returns relative to surrounding years, because short-term interest rates will remain around 5.5% for an extended period starting in 2023.
Those vintage years 2023 is the is the first vintage year where we're actually starting to see high enough rates that have historically generated that kind of return. And so I do agree with you, David. I just think it's shifted out by a couple of years. 23 2425 those can be some real power law years, I, I think because we're going to have just based on what the fed is saying. 5.5% interest rates for the foreseeable future, which is it's a huge it's a huge number.View on YouTube
Explanation

As of November 30, 2025, it’s too early to definitively judge a prediction about how the 2023–2025 venture capital vintages will perform over their full life. VC funds typically take 8–12+ years to realize and distribute returns, and industry benchmarks like Cambridge Associates’ US Venture Capital Index still treat 2014–2022 as the main “meaningfully sized” vintages as of 2024; 2023+ funds are only beginning their investment and markup phase, not their exit phase. (cambridgeassociates.com)

Partial evaluation of the interest-rate premise is possible. The Fed did raise the target range to 5.25–5.50% by July 2023, and the effective federal funds rate stayed around 5.3% through late 2023 and the first half of 2024. (global-rates.com) However, the Fed began cutting rates in late 2024, with the target range down to 4.25–4.50% by December 2024 and then to 4.0% and 3.75–4.0% after further cuts in September and October 2025. (theglobalstatistics.com) So rates did not stay around 5.5% for many years; they were at that level for roughly 12–15 months before a clear easing cycle.

For the VC performance outcome, only early, noisy indicators exist. Carta’s Q2 2025 data show 2023-vintage funds are about 58% deployed, with significant dry powder remaining, and that the very best 2023 funds (90th percentile) have strong IRRs (30%+), largely due to AI-driven markups—but median performance for recent vintages is weak, and power-law outcomes are concentrated in a minority of funds. (carta.com) AngelList/LP commentary based on large datasets of 2017–2024 funds reports median IRR for the 2023 vintage around –1% and median TVPI for 2021–2023 vintages hovering just under 1.0x, with DPI essentially zero—consistent with very early-stage, largely unrealized performance rather than clear outperformance. (nehaldesai.com) Broader benchmarks show the US VC index delivered –3.4% in 2023 and only a modest rebound in 2024, with private-market funds (including VC) underperforming US public equities over multiple horizons. (cambridgeassociates.com)

In summary:

  • The mechanical rationale (rates at ~5.5% "for the foreseeable future") has only partially held: rates peaked there but have already been cut materially.
  • The core claim—that 2023–2025 VC vintages will, in aggregate, be unusually strong “power-law years” versus surrounding vintages—concerns outcomes that will not be observable until well into the 2030s. Current data show mixed, highly preliminary results, not definitive outperformance.

Because the main outcome variable (full-cycle vintage-year returns for 2023–2025 funds) cannot yet be known, the prediction must be rated "inconclusive" rather than right or wrong at this time.