If you’re new here, we produce open, empirical research on venture capital performance, portfolio construction, and the structural dynamics that shape capital allocation. This Substack is where we share findings, context, and synthesis from that work.
Today, we’re publicly releasing our first white paper:
Why Emerging Venture Capital Managers Matter: Rethinking Institutional Portfolio Construction
Alongside the paper, we’re also releasing a self-evaluation tools for institutional allocators and emerging managers to assess whether their programs are structurally positioned to capture venture alpha.
Below, we’ll share the key findings, why they matter, and what’s next.
The Question We Started With
Emerging managers are often treated as a secondary allocation in institutional portfolios.
They are framed as carve-outs, pilots, or discretionary sleeves that sit outside the core portfolio. In some cases, they are positioned as values-driven initiatives rather than performance-driven ones.
But what if that framing is incomplete?
What if emerging managers are not a concession to risk, but a structural source of return that institutional portfolios are systematically underweighting?
That is the question we set out to answer.
To do so, we analyzed performance data from more than 2,000 U.S.-based venture capital funds over a 25-year period. Rather than focusing only on returns, we examined how fund size, fund sequence, portfolio construction, and institutional screening criteria interact to shape outcomes.
What We Found
1. Emerging managers outperform by 7.2% IRR.
On a $100 million allocation, this translates to roughly $72 million in foregone value when institutional capital flows away from these managers.
2. Funds with women GPs deliver a +1.6% IRR advantage.
Despite facing structural fundraising barriers such as smaller fund sizes, fewer LP relationships, and limited brand recognition, these funds outperform on average.
3. Portfolio configuration matters more than sector concentration.
Emerging managers who design portfolios around their constraints outperform those who attempt to replicate the structures of established funds.
4. Institutional screening criteria filter out performance, not risk.
Common requirements like AUM thresholds, fund sequence rules, and network-based sourcing systematically exclude managers who generate alpha.
Why This Matters
For LPs:
The data suggest that emerging managers should not be treated as a peripheral allocation. Shifting from size-based screening to capability-based evaluation changes the opportunity set. Institutions that build disciplined, well-governed emerging manager programs gain access to top-performing funds earlier in their lifecycle, before performance is fully priced in.
For EMs:
Constraints are not inherently disadvantages. Smaller fund sizes, limited brand recognition, and narrower LP networks shape how portfolios are built. When managers design fund strategy and portfolio construction intentionally around those realities, constraints can become performance advantages.
Configuration discipline matters.
For the venture ecosystem:
Underfunding of emerging managers is not primarily a talent problem. It is a market inefficiency driven by institutional process design.
Improving how capital is allocated requires better data, clearer definitions, and evaluation frameworks that reflect how venture capital actually works.
That is the role Colibrí Institute aims to play.
What’s Next
This white paper is the first in a quarterly research agenda. We’re committed to producing open-access research that improves how venture capital functions—and how it intersects with technology, policy, and economic opportunity.
Coming soon:
Deeper dives into specific findings from this paper
Research at the intersection of capital systems, technology policy, and institutional decision-making
Convenings that bring together allocators, managers, policymakers, and researchers
If there are questions you’d like us to explore, reply to this email or leave a comment. We’re building this in public, and your input shapes what we work on.
Support Our Work
Colibrí Institute is a nonprofit. Our research is open-access by design because we believe better data should be available to the entire ecosystem, not just those who can pay for it.
We partner with mission-aligned institutions to fund independent research on venture capital, technology, and policy.
If your organization is interested in supporting this work, reach out to us at hello@colibri.institute
Follow along:
→ Mariela on LinkedIn
→ Itzel on LinkedIn
→ Colibrí Institute on LinkedIn
— Mariela & Itzel