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Venture capitalists are taking their biggest swings at the startups they’ve previously backed.

The total value of U.S. venture funding rounds led by investors that previously invested in the startups topped $69 billion as of mid-June, according to PitchBook. That’s already higher than the $67 billion volume of insider-led rounds for all of last year. If the pace continues, insider-led rounds will beat the record set in 2021 at the height of the zero-interest-rate investment boom.

Recent OpenAI and Anduril megarounds made up more than 60% of the total volume in deal value this year as existing backers took bigger stakes at higher prices.

Founders are using investment interest from their existing backers to get better terms, such as selling a smaller stake in the company than a new lead investor would require. Startups that choose returning investors can also skip some of the time-consuming aspects of fundraising, such as submitting to intensive reviews of financial operations and customers.

Startups “can just do a more bespoke round with insiders than you could if you were bringing in a new firm,” said Miles Clements, a partner at venture firm Accel.

In April, Clements approached enterprise software maker Linear before the startup had formally kicked off any fundraising efforts. He pitched the company’s founders by noting Accel, which was already on the board after investing in 2023, didn’t need another seat on the board and could limit dilution because it wasn’t a new investor. In June, Accel led the $82 million investment in Linear at a $1.25 billion valuation.

While the deal value of inside rounds has increased, the bets have become concentrated. Some 477 rounds were led by insiders so far this year, a figure that’s flat compared to this point last year. At that pace, the number of inside-led rounds will fall just short of last year’s figure of 1,004.

Firms such as Thrive, SoftBank and others are doubling down on companies they see as leading in AI, finance and defense tech. Peter Thiel’s Founders Fund, for instance, led Anduril’s first two rounds starting in 2017, after one of its partners co-founded the startup. It has also led investments last year and this year, bringing its total investment to $2 billion.

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SoftBank Group, meanwhile, is leading a $40 billion investment at a $300 billion valuation in OpenAI. The telecom conglomerate led by Masayoshi Son last fall invested $500 million in a round led by Thrive Capital that valued the ChatGPT maker at $157 billion; SoftBank also bought $1.7 billion in shares from employees and former OpenAI staff.

Thrive, which has backed OpenAI multiple times, is also concentrating investments into Anysphere, the startup behind coding assistant Cursor. In May, the New York-based venture firm led a $900 million financing into Anysphere after leading a round into the company in December.

Demand to back the fastest-growing companies has erased some of the stigma of inside rounds. In years past, such investments suggested the startups had difficulty raising money from new investors. The limited partners in VC funds have also worried that fund managers may pay too high a price for the investments, which can fatten a fund’s returns on paper.

The strategy pays off when a company does well. But when it falters, or collapses, the high prices the fund paid in later rounds exacerbates the fallout.

Sutter Hill Ventures, for instance, provided the seed investments for cybersecurity firm Lacework in 2015 and led at least three more rounds into the company. But the company eventually sold for around $200 million last summer, a fraction of its peak valuation of $8.3 billion.

IVP, meanwhile, led or co-led three investments in Hopin, a once high-flying virtual events company, whose valuation swelled to nearly $8 billion valuation in 2021. But after the end of the pandemic sapped demand for its software, Hopin sold off parts of its business for a fraction of its former price and liquidated its U.K. business.

Nonetheless, more firms are copying the likes of Founders Fund, which has built a strategy around concentrating its investments in the same set of companies. In addition to repeat investments in Anduril, the firm has also led five of the nine rounds in Ramp, most recently at a $16 billion valuation.

“There are just a finite number of businesses of a certain quality,” said Logan Bartlett, an early investor in Ramp and managing partner at Redpoint Ventures.

“If you are in one of them, it would be a totally logical thing to not let other people reap the benefits of the work you’ve already done.”