New research by Esinli Capital combines venture fund portfolio data with academic studies to compare diversified fund-of-funds strategies against traditional single-fund VC investing. Success probability increases from 74% to 91% with systematic diversification, while risk-adjusted returns (Sortino ratio) improve from 0.7 to 3.0. Access to top-performing VC funds remains a barrier for individual investors, but fund-of-funds platforms are closing the gap through lower minimums and broader reach.
NEW YORK and TEL AVIV, Israel, July 9, 2025 /PRNewswire-PRWeb/ -- According to new research released by , success rates in venture capital can increase from 74% to 91% through systematic fund diversification.
The comprehensive analysis, which synthesizes academic studies from leading institutions including the National Bureau of Economic Research (NBER) and Vanguard, examines portfolio construction methodologies across more than 25 . It found that diversified fund-of-funds approaches significantly outperform traditional single-fund investments.
The research demonstrates that investing across multiple funds reduces failure probability from 26% to 9% while improving risk-adjusted performance as measured by the Sortino ratio from 0.7 to 3.0.
It also finds that fund-of-funds in venture capital are able to identify and access superior-performing managers, often outperforming direct investing constrained by limited fund access or manager selection constraints. Specifically, investing in 25+ funds, "the probability of a <1.5x performance multiple decreases from 26% to 9%, and risk-adjusted performance increases from 0.7 to 3.0."
"The data shows systematic diversification delivers superior performance while reducing risk," said Neevai Esinli, Founder and CEO of Esinli Capital. "Our approach captures entire innovation ecosystems rather than betting on individual fund managers or startups."
Traditional venture capital investing, typically requiring $1 million minimum commitments, has created an access gap that systematic approaches can address. Modern venture capital fund platforms can deliver institutional-grade diversification with significantly lower minimum investments while maintaining professional due diligence standards.
Venture capital has historically delivered 19.07% annual returns over 30 years compared to 10.70% for the S&P 500—representing 78% outperformance. However, access to these returns has been limited to institutions and ultra-high-net-worth individuals due to high minimum commitments and relationship barriers.
Fund-of-funds assets have grown 58% from 2020 to 2023, outpacing traditional fund growth of 42%, indicating institutional validation of the diversified approach.
The research suggests that fund-of-funds approaches are particularly effective in venture capital because they provide access to emerging managers and high-growth funds that individual investors might not discover through traditional channels. This systematic approach captures innovation value that relationship-driven strategies often miss.
The full report is available upon request .
About Esinli Capital
Esinli Capital democratizes venture capital through professionally managed fund-of-funds. Their proprietary EcoCaptureâ„¢ methodology gives accredited investors access to 500+ startups across 25+ VC funds starting at $10,000. Led by professionals with $10B+ AUM experience, Esinli Capital targets 20-30% IRR through systematic global diversification. For more information, visit
Media Contact
Neevai Esinli, Esinli Capital, 972 0525622639, [email protected],
Neevai Esinli, Esinli Capital, [email protected],
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SOURCE Esinli Capital
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