I’m in Israel all week for Axis Innovation Startup World Cup meeting with corporations, investors, founders, universities and family offices. I also stopped by the Nova Festival to see it first hand and pay respects - it’s was a very unreal and emotional feeling being there.
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Recently Gil Dibner posted a 12-minute excerpt from his fund’s AGM, offering a sharp and honest take on how the venture world is reshuffling. It’s well worth watching—especially because it confirms a lot of what many of us are feeling on the ground, but also because it invites debate. Here’s my read, with some added data and context.
1. Market Bifurcation Is Real—and Limiting ⚖️ Gil pointed out that AI-native companies, hyper-growth firms, and second-time founders are still attracting capital and commanding high valuations. He’s absolutely right. These are the "safe bets"—and in today’s uncertain environment, LPs and mega-funds are doubling down on safety. But the side effect is a narrowing of imagination.
According to PitchBook, over 70% of all venture funding in Q1 2024 went to repeat founders and/or companies in the AI space.
Companies like xAI ($6B, pre-product), Mistral (€385M Series A, <1 year old), Anthropic ($7B+ before monetization), Inflection AI ($1.3B pre-revenue), and OpenAI raised massive sums based on team pedigree and vision—often without a shipping product.
Meanwhile, net new founder-led pre-seed deals saw a 35% year-over-year decline.
Great companies can still be built outside the AI arms race—but fewer investors are willing to take that bet right now. We risk overfunding what’s trendy and underfunding what’s transformative.
2. Funding Is More Concentrated Than Ever 💰 Another key point was the shrinking venture pool and the rise of $100M+ rounds. On the surface, this might look like a sign of strength. In reality, it’s a form of capital hoarding. Big funds are writing bigger checks into fewer companies—not because those startups always warrant it, but because it’s the only way to move the needle on a $1B+ fund.
In 2023, the median early-stage VC deal size rose to $12.5M, up from $7.5M in 2020 (CB Insights).
The top 10% of deals now account for over 50% of total deployed venture capital.
In 2025, Andreessen Horowitz has now invested over $1.5B in early AI plays across fewer than 15 companies, doubling down on high-conviction, large-check bets in foundational model builders, infrastructure startups, and vertical AI challengers—often pre-revenue and pre-product.
This trend leaves early-stage and emerging managers squeezed out, unable to compete on check size, and forces founders into capital structures that may be unsustainable or premature.
3. The VC Landscape Is Splintering Into Five Lanes 🧭 Gil suggests VC is being redefined into five distinct categories. There’s truth to that—it’s no longer one-size-fits-all. But while frameworks are helpful, I think we need to be careful not to overfit the model.
According to Sapphire Ventures, over 40% of new funds launched in 2022–2023 fall outside the traditional 10-year closed-end structure.
The rise of rolling funds (AngelList), solo GPs, multi-GP collectives, and micro-funds ($10–50M) reflects a massive diversification in how VC is structured.
Many managers are now combining capital with content, networks, or go-to-market support, moving VC from pure capital to hybrid services.
What matters most today is not the swimlane, but clarity of thesis, speed of execution, and founder alignment.
4. Fundraising Timelines Are Painfully Long ⏳ No argument here. The Seed-to-Series A window now often exceeds two years. That’s a long time for early-stage companies burning through limited cash—especially in a market where down rounds can be existential.
Carta data shows median time between Seed and Series A has grown from 16 months (2020) to 27 months (2024).
In 2023, over 55% of Seed-funded startups did not raise a Series A within two years.
Bridge rounds and structured SAFE extensions are up over 30% YoY as founders fight to extend runway.
This puts pressure on early-stage VCs not just to fund, but to actively support and help founders make progress with fewer dollars over longer periods.
Zooming Out: What’s Actually Going On 🔍
Let’s call it what it is: the ZIRP era (2020–2021) was a golden age for emerging managers. LPs were yield-hungry. Everyone wanted exposure to venture. New funds popped up weekly. But that chapter is over. Rates are up. Liquidity is down. And LPs have gone back to the old playbook: write bigger checks into bigger names.
That doesn’t mean emerging managers are dead—it just means the bar is much higher. You can’t fake it with vibes anymore. You need:
A defined and differentiated investment thesis
Deep founder networks
Real proof of value-add (support, capital efficiency, exits)
A pathway to DPI, not just TVPI
The ones that survive this cycle will emerge stronger, smarter, and more trusted.
Family Offices Are Still Key—But Cautious 🏛️ In this new cycle, family offices are arguably the most important capital source for sub-$100M funds. But many got burned chasing 2021 hype and are licking their wounds.
A 2023 Camden Wealth survey found that 58% of family offices had paused or reduced VC exposure due to 2021 losses.
72% said they are now prioritizing fund manager track record and capital discipline over headline returns or logos.
The result? More scrutiny. Fewer bets. Less FOMO. If you’re an emerging manager today, your pitch can’t just be about market size—it needs to be about stewardship, alignment, and long-termism.
So What Needs to Shift? 📉➡️📈
Liquidity has to come back. IPOs, M&A, and secondaries are the lifeblood of venture.
As of 2025, the number of U.S. IPOs rebounded slightly to 102 in 2024, up from just 70 in 2023 but still far below the 397 peak in 2021 (Renaissance Capital).
Meanwhile, M&A volume rose another 9% year-over-year in Q1 2025, continuing its recovery trend but still trailing pre-pandemic averages by over 25%, indicating that while liquidity is returning, it remains uneven and cautious.
A couple of rate cuts would go a long way.
A 25–50bps cut could reduce private credit rates and free up billions in LP allocations stuck in yield-maximizing alternatives.
We still have lots of work to do as we clean up from 2021, deal with current markets and political issues. But we need to remember we’re investing for the future we want, which is affected by the world today, though will grow and scale in a different environment over time.
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