May 2026
The World Economic Forum, in collaboration with Stanford Graduate School of Business, just published its most comprehensive look yet at the state of venture capital. Here are the key learnings.
Venture Capital Is More Important Than Most People Realise
VC funds less than 0.1% of new businesses — yet those companies account for 42% of total US public market capitalisation and an extraordinary 94% of all R&D spending among public companies founded in the last 50 years. Seven of the ten largest companies in the world by market cap received venture funding early on, including Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA and Tesla.
The model works not by avoiding failure but by tolerating it. Around three in four VC-backed companies fail to return their initial investment. The model is designed around the minority that break out - and when they do, the returns can be thousands of times the initial capital.
The Machine Is Slowing Down
VC has historically depended on a cycle: invest, exit via IPO or acquisition, recycle capital into the next generation. That cycle is stalling.
There are now approximately 1,900 venture-backed unicorns still privately held globally, representing over $7.3 trillion in valuation and an estimated $3 trillion in unrealised value sitting on VC balance sheets. Companies are staying private far longer, exits have slowed significantly, and limited partners - the pension funds, endowments and sovereign wealth funds that back VC firms — are waiting longer for distributions.
This is the single biggest structural pressure facing the industry today.
Secondary Markets Are Filling the Gap
With IPOs scarce, secondary markets — where investors buy and sell existing private company stakes — are becoming critical infrastructure. In 2025, secondary transaction volume reached $106 billion, representing nearly a third of all VC-backed exits.
But there's a concentration problem: the 20 most actively traded companies account for 86% of that volume. The long tail of VC-backed companies — thousands of them — still have no effective liquidity mechanism. Expanding secondary market infrastructure beyond the top tier is one of the report's central recommendations.
This is directly relevant to what Robinhood is doing with RVI. Retail-accessible, exchange-traded vehicles are one form of secondary market innovation.
Geography Still Matters - And The Gap Is Wide
Startup creation has globalised. The ability to scale has not.
The US and China together account for roughly three-quarters of all unicorns globally. In North America and Asia, roughly 1 in 60 VC-backed companies becomes a unicorn. In Europe it's 1 in 135. In sub-Saharan Africa it's 1 in 330.
The gap is not just about capital. It reflects differences in regulatory environments, talent mobility, stock option frameworks, and the recycling of experienced operators back into new ventures — what the report calls "founder factories."
AI Is Reshaping the Economics of the Whole Asset Class
In 2025, AI accounted for more than half of global venture deal value, with a growing share concentrated in rounds of $100 million or more. AI-native companies are reaching significant revenue with smaller teams than ever before - but the infrastructure they depend on (compute, data centres, energy) requires industrial-scale capital that goes well beyond traditional venture financing.
This is blurring the lines between asset classes and drawing in sovereign wealth funds, private equity, and now retail investors through vehicles like RVI.
The Five Priorities the WEF Is Calling For
The report sets out five structural reforms the industry needs:
Better secondary market infrastructure — extend efficient liquidity beyond the top 20 companies to the thousands of firms currently locked out.
Mobilise institutional capital — regulatory frameworks in many regions still prevent pension funds from allocating meaningfully to VC. Reforms like the US executive order on 401(k) access to private assets are steps in the right direction.
Reduce regulatory friction — cross-border scaling is unnecessarily expensive. Divergent rules on incorporation, equity compensation and data compliance act as a hidden tax on growth.
Strengthen talent ecosystems — the regions that produce the most valuable companies are those that recycle talent from successful ventures back into new ones. University-industry ties, startup visas and founder-friendly equity frameworks matter enormously.
Enable smarter government participation — public capital can catalyse private investment when it is time-limited, performance-anchored and designed to build market infrastructure rather than pick winners.
Why This Matters Now
The WEF report and the rise of retail venture products like RVI are two sides of the same story: the traditional VC model was built for a world of fast exits and accessible public markets. That world has changed. Companies stay private longer, exit windows are narrower, and capital is increasingly concentrated.
The response - from secondary markets to retail-accessible funds — is a structural adaptation. Understanding that adaptation is increasingly important for anyone thinking seriously about where wealth creation is happening and how to access it.
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