Venture capital firm CRV (formerly Charles River Ventures) has closed a $750 million fund for its latest investment cycle, marking a notable downsizing from its previous fund and following a 2024 decision to return a portion of unallocated capital to its limited partners (LPs). The new fund, CRV XXIII, will focus on early-stage startups in enterprise software, AI infrastructure, and cybersecurity—core sectors for the 57-year-old firm—but at a smaller scale than its 2021 vintage, which raised $950 million. The move reflects CRV’s strategic pivot to prioritize focus over size, after a period of reevaluating its investment pace and performance amid a volatile tech market.
A Deliberate Downsizing: From $950M to $750M
CRV’s new fund is 21% smaller than its 2021 fund, a shift the firm attributes to two key factors: a decision to return unused capital to LPs last year and a desire to concentrate on fewer, higher-conviction investments. In late 2024, CRV returned approximately $120 million of unallocated funds from its 2021 pool to LPs— a rare move in the VC industry, where firms typically hold onto capital to deploy over several years. At the time, CRV’s leadership cited “a more selective investment environment” and a need to align its capital with the slower pace of early-stage dealmaking post-2022 tech downturn.
“We realized we didn’t need $950 million to deliver strong returns in today’s market,” said CRV General Partner Saar Gur, who leads the firm’s enterprise software investments. “The 2021 fund was raised during a period of exuberance, when deal flow was rapid and valuations were high. Now, we’re in an era where patience and focus matter more. By downsizing, we can spend more time with each portfolio company, avoid overinvesting in crowded sectors, and ensure every dollar we deploy has a clear path to driving value for LPs.”
The downsizing also comes after CRV adjusted its investment cadence. In 2023–2024, the firm slowed its deal pace, making 18 early-stage investments compared to 25 in 2021–2022. This shift was driven by a desire to support existing portfolio companies through market turbulence—including helping startups extend runway, cut costs, or pivot business models—rather than chasing new deals. The decision to return capital, Gur noted, was a way to “respect LPs’ trust” by avoiding holding onto funds that wouldn’t be deployed efficiently.
Why CRV Returned Capital to LPs
CRV’s 2024 capital return was a strategic choice to reset its relationship with LPs, many of whom have grown more cautious about VC fund performance in recent years. After the 2022 tech slowdown, numerous LPs pushed firms to reduce “dry powder” (unallocated capital) and improve transparency around investment timelines—especially as some funds struggled to generate returns from late-stage bets made during the 2021 boom.
For CRV, the move was also a response to its own performance review. While the firm has a strong track record (past exits include Twitter, Dropbox, and Squarespace), its 2021 fund faced headwinds from the downturn: several portfolio companies in consumer tech and crypto saw valuations drop, and a few failed to raise follow-on funding. Returning unused capital, according to CRV Managing Partner George Zachary, was a way to “demonstrate accountability.”
“LPs don’t pay us to hold cash—they pay us to invest wisely,” Zachary said. “When we saw that we weren’t going to deploy the full $950 million in a timeframe that made sense, returning the excess was the right thing to do. It sent a message that we’re focused on performance, not just managing more capital. That trust has been critical in closing this new fund.”
LPs have responded positively to the shift. According to CRV, over 80% of the investors in the new $750 million fund are returning LPs, including pension funds, endowments, and family offices. A representative from a large U.S. pension fund that backed CRV XXIII noted, “We appreciate CRV’s willingness to adapt to market conditions. Downsizing and returning capital show they’re putting LPs’ interests first—something we look for in long-term partners.”
Focus Areas for CRV XXIII: Enterprise, AI Infrastructure, and Cybersecurity
Despite the smaller fund size, CRV is doubling down on its core strengths: early-stage investments in B2B technology. The new fund will allocate 70% of its capital to enterprise software (e.g., tools for remote work collaboration, supply chain management), 20% to AI infrastructure (e.g., startups building chips, data pipelines, or training frameworks for AI models), and 10% to cybersecurity (e.g., zero-trust architecture, threat detection for small-to-midsize businesses).
Notably, CRV will avoid consumer tech and crypto—sectors it dabbled in during the 2021 boom but has since deprioritized. “Consumer tech is harder to scale profitably today, and crypto remains too volatile for our early-stage focus,” Gur explained. “We’re sticking to what we know best: helping enterprise founders build products that solve real pain points for businesses. Those sectors have proven more resilient in downturns and offer clearer paths to exits.”
Early investments from CRV XXIII have already begun, including a $12 million Series A in a startup building AI-powered supply chain forecasting tools and a $8 million seed round for a cybersecurity firm focused on protecting remote workers. The firm plans to make 15–20 investments from the new fund over the next 3–4 years—fewer than the 25+ deals from its 2021 fund—allowing partners to take more board seats and provide hands-on support.
The Broader Trend: VC Firms Reining in Fund Sizes
CRV’s downsizing reflects a wider trend in the VC industry, as firms adjust to a post-boom market. After years of raising ever-larger funds (2021 saw 15 VC firms close funds of $2 billion or more), many firms are now scaling back: according to PitchBook data, the average size of early-stage VC funds in 2025 is down 18% from 2021. Firms like Benchmark and Union Square Ventures have also announced smaller funds in recent years, citing a need to focus on quality over quantity.
For CRV, the shift is about more than just following trends—it’s about ensuring the firm’s longevity. Founded in 1968, CRV is one of the oldest VC firms in Silicon Valley, but it has faced competition from newer firms (e.g., a16z, Sequoia) that raised massive funds in the 2020s. By downsizing, CRV is positioning itself as a nimble, focused player rather than a large-scale competitor.
“Our goal isn’t to be the biggest VC firm—it’s to be the best partner for early-stage enterprise founders,” Zachary said. “A smaller fund lets us be more agile: we can move quickly on great ideas, spend more time with founders, and avoid the pressure to deploy capital just to hit targets. That’s how we built our reputation over 50+ years, and that’s how we’ll keep it.”
What’s Next for CRV
With CRV XXIII closed, the firm is now focused on deploying capital strategically—prioritizing founders with deep domain expertise and products that address unmet needs in enterprise tech. It’s also doubling down on support for existing portfolio companies, including a new “AI Accelerator” program that connects enterprise startups with AI infrastructure partners (e.g., cloud providers, chipmakers) to help them integrate AI into their products.
For LPs, the new fund represents a chance to invest in a legacy firm that’s adapted to market realities. For founders, it’s an opportunity to partner with a VC that’s focused on long-term success rather than short-term deal flow.
“CRV’s downsizing isn’t a sign of weakness—it’s a sign of maturity,” said a tech industry analyst who covers VC trends. “In a market where many firms are still struggling to adjust to post-2021 realities, CRV has taken proactive steps to align its capital with its strategy. That’s the kind of adaptability that will help it thrive in the years ahead.”
As Gur put it: “We’re not trying to chase the next big fund size. We’re trying to chase the next big company—one that will transform enterprise tech, create jobs, and deliver returns for everyone involved. This $750 million fund gives us exactly the resources we need to do that.”