Study Finds 5% of Venture Capitalists Generate 90% of Industry Profits
Stanford Business School professors Ilya Strebulaev and Blake Jackson released the 2026 ranking of venture capital firms, stating that about 5% of venture capitalists generate approximately 90% of the industry's investment profits.
The ranking covers over 230,000 investments, nearly 13,000 venture capitalists, and more than 5,000 firms over nearly 30 years; each score corresponds to a specific investment record of a company on a specific date, and the researchers claim that self-reported performance or subjective editorial selection was not used.
The method applies a discount to the valuations of private companies to avoid overestimating returns from unicorns; the researchers state that unicorn valuations are on average about 50% inflated, thus the latest financing valuations cannot be directly considered realizable exit values.
The ranking tracks stock dilution in rounds and deducts investment costs from returns to calculate net profits rather than project counts or nominal book value increases. It also incorporates value-added actions such as leading investments and board seats, distinguishing between "invested companies" and "actual captured returns."
The study applies a human capital time decay, reducing the historical performance of investors by about a 3.5-year half-life; attribution assigns 25% of a single transaction to the institution at the time of investment and 75% to the investor's current institution to reflect capability attribution after personal migration.
The correlation of this ranking with the Forbes Midas List is only 0.27. SV Angel has invested in about 139 unicorns, ranking 31st; Thrive has invested in about 47 unicorns but ranks 8th, indicating that the number of unicorns, media visibility, and adjusted profits after costs, dilution, and time are not the same metrics.
The top firm in the 2026 ranking is Sequoia Capital, with a score of 10,158; Andreessen Horowitz is second with 8,292 points, followed by Accel, DST Global, and Tiger Global in the top five. The score of the top firm is about 41 times that of the 100th-ranked firm.
In market mechanisms, limited partners will use such rankings adjusted for net returns and dilution to screen managers, potentially concentrating funds further in a few firms with verifiable exit records, leading capabilities, and excellent investor networks; funds heavily reliant on brand, project counts, or paper unicorn valuations face pressure. For entrepreneurs, what is truly scarce is not the firms that have "invested in many star companies" but partners who can continuously generate net returns and provide follow-up financing support under specific rounds, terms, and ownership ratios.
Source: Public Information
ABAB AI Insight
This ranking challenges the most common narrative metrics in venture capital: the number of unicorns, total valuations, and "having invested in a certain company." Sequoia's historical advantage is built on the massive contributions of a few high-return projects like Apple, Google, YouTube, and Stripe to the overall fund returns; venture capital inherently has a power-law structure, where about 6% of deals drive about 60% of returns. The Strebulaev-Jackson method further applies this logic at the institutional and investor levels: project hit rates are important, but profits are determined by entry valuations, stock retention, subsequent dilution, and exit values.
The key to capital pathways is "who captures the returns." A company may go through multiple rounds of financing from seed to IPO or acquisition, and early investors who do not follow on will be diluted, while late investors may buy into unicorns at inflated valuations, leading to limited profits. The ranking thus deducts costs, reduces private valuations, tracks round-by-round dilution, and allocates part of the value based on lead investments and board contributions; Thrive ranks 8th with about 47 unicorns, while SV Angel ranks 31st with about 139, illustrating that the number of transactions cannot replace the net return efficiency of each capital.
Historical comparisons show the differences between Tiger Global and traditional early Silicon Valley funds: the former has participated in a large number of growth rounds with a fast, scaled approach and less governance involvement, while the latter relies more on early concentrated holdings, long-term board participation, and support in subsequent rounds. The current top five rankings include Sequoia, a16z, Accel, DST Global, and Tiger Global, indicating that there is no single investment style; the common condition is the ability to achieve sufficiently large, early, or efficient economic interests in a few true big winners.
This represents a concentration of capital. Power-law returns enable top firms not only to gain exit profits but also to acquire stronger brands, transaction priority, LP follow-on investments, and talent attraction, creating a feedback loop of "historical returns - larger funds - better deal access." The new ranking includes 21 firms established after 2015 in the top 100, indicating that concentration is not absolutely closed; however, new firms must break down barriers not just by increasing the number of deals but by obtaining and maintaining sufficient holdings in a few high-value companies at appropriate prices.