The Cerebral Valley Podcast VC Haves and Have Nots (with Kate Clark)
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May 30, 2025 This week, Bloomberg reporter Kate Clark shares her insights on the tough fundraising climate for emerging venture capital firms. She discusses how only those departing from established brands can attract investment, while the situation would be worse without the AI funding surge. Predictions for the venture market's future vary widely, and the impact of sovereign wealth funds is highlighted. They also touch on Elon Musk's controversial departure from government and the media's role in shaping narratives around tech successes and failures.
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Fundraising Crisis for Emerging VCs
- Emerging venture capital managers face the toughest fundraising environment in years, raising less than $5 billion mid-year 2023.
- First-time fundraisers only raised about $1 billion, marking a grim trend for new VC entrants.
Flight To Quality In Venture
- Limited partners prefer mega funds like a16z and General Catalyst in uncertain times because of their long track records.
- Reputation and pedigree from big firms are critical for fundraising success among emerging VCs today.
Pandemic Fundraising Peak Story
- The 2020-2021 pandemic era was the peak period when anyone from startups could quickly raise millions.
- That era was short-lived and led to many overvalued investments with poor returns.