Venture Capital
VC capital doesn’t disappear in 2025 – it’s reallocated. Large allocations into AI infrastructure and model builders made headlines, but VC firms generally became more selective: follow-on capital was being funneled into proven executions, and secondaries/dry powder dynamics replaced exits and late-stage rounds. Recent VC reports show that there continues to be strong interest in AI, but also record a growing market for dry powders and secondaries concentrated in certain vintages.
What Founders and Limited Partners Need to Know
Fund discipline: Expect long diligence and a high bar for unit economics. VCs are scrutinizing teams and traction more than ever.
Secondaries are a tool, not a panacea: Funds and founders use secondary markets to provide liquidity and manage concentration, while increasing near-term flexibility for portfolios.
Terms matter: As capital pools become commonplace, the nuances of the term sheet (proportionality, liquidation preferences, governance) can have a huge impact – hiring a lawyer early on.
Actionable Tips for Fundraising
Develop three stories: product, traction (numbers), and a credible path to defensible. Practice a “12-slide narrative” that prioritizes business metrics.
Build investor relationships before you need money. In a more selective market, warm introductions and repeated demos build trust faster than a one-time pitch.