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Tech Deciphered · Apr 10, 2025

63 – Fundraising… everything you need to know

The current landscape of fundraising for start-ups, companies and VC funds, as well as best practices and hacks… and how to get those investors to giving you the money.Navigation:Intro (01:34)What is the current evolution and landscape for fundraising for start-ups?What is the current evolution and landscape for fundraising for VC firms?What are the best practices - strategies, processes, tactics and hacks - for fundraising overall … for start-ups?What are the best practices - strategies, processes, tactics and hacks - for fundraising overall … for VC firms?How to get investors (VCs and LPs) to commit to giving you money?ConclusionOur co-hosts:Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmittNuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedroOur show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news Subscribe To Our Podcast BertrandHello and welcome to Tech Deciphered episode 63. In this episode, we are going to talk about the evolution and the current landscape of startups and VCs fundraising. We will talk about this evolution and landscape for fundraising, both from a startup and VC sides. We are going to talk about the best practices, strategies, process, tactics, and hacks for fundraising on both sides when you are a startup or when you are a VC firm. And ultimately, we will finish on how to get investors to commit to give you money. Hi, Nuno. How are you? NunoHey, Bertrand. We'll start with the evolution and current landscape of startup fundraising. It's been a couple of exciting years. We got to the height of it all, the bull of all bull markets, actually in 2021, post-COVID. Then we had 2022 and 2023. Very sharp correction, dramatic reduction in venture investments. '24 was a good year. It's a year that scaled back again, seems stabilizing. I think we'll see what '25 has on hold. My prediction is that it's going to be a great year. BertrandYeah, 2021 was pretty shockingly good post the start of COVID. After a sharp wait and see by end of 2020, things were going back not just to normal, but to overdrive. It's really by the end of 2021 that the music stopped. We had to worry about inflation with interest rates going up. 2022 was definitely bad for startups and VCs alike. But as you said, 2024, we are back to a better place. I would have the same bet for 2025, as you have, Nuno. NunoOne interesting piece is there's something that I think changed everything in 2024, which is AI. If we didn't have AI in 2024, I don't think we would have had this landscape. Important to note, and we'll talk about it later on when we talk about the landscape for actual VC fundraising, that the way that VCs work in their cycles and how they raise money, there's always a little bit of a lag around the table. It means there's still a lot of what we call dry powder with VC firms. This means that VC firms have raised quite a lot of money from limited partners for 10-year funds with, for example, four-year investment periods. Therefore, they still need to deploy capital in whatever market they're in. The fact that there were a lot of AI opportunities means that they've been deploying a lot towards, for example, AI place. That's going to change as well. We'll talk later about, again, the VC fundraising landscape, but there's going to be a little bit of an adaptation on those two time lags around the table. But for me, the big effect of 2024 was without a doubt, AI. BertrandYeah, and it's very interesting because when you think about it, the new AI revolution started with LLMs, with OpenAI launching ChatGPT. And this is an event that actually started end of 2022. So that AI revolution, financing, fundraising, actually started in 2023. But at that time, it was still so bad from an overall macro perspective that it was not enough to change the big trends. But at the same time, for sure in 2024, I think it had time to turn around. We'll talk more precisely about the numbers, but it's pretty clear that, as you say, AI has taken over. NunoThe height of it from the numbers we have in mind shows that on a global basis, 2021 was the all-time high in terms of startup investing at 750 billion. We've now had a significant reduction, basically around 349 billion, if the number is around correct, but certainly as deep as that in 2023, returning basically to levels that we saw back in 2018-2020. 2024, we went back up to around 370 billion. I think this year is going to be higher as we discussed before. One clarification I would say, a lot of people would say, Is that true across the board? Is everything being equally dispersed? Not really. We've seen that early stage has suffered more. Mid to late stage, in particular in 2024, had another peak. Not peak year, but had a significant amount of capital was really deployed in mid to late stage investing. Last year, backing projects that either were already on their way or projects that are around what we would consider structurally AI, and therefore that are much more capital-intensive even if they're earlier stage. BertrandIt's also more going to the bigger firms, if I'm not wrong here. It's more to the bigger firms. In terms of investment, I guess it was also more to the bigger startups, if you pick an operator AI, for instance. I guess it has been actually pretty tough. If you are not one of the top 20 VC firm, if you are not one of the top 20-50 AI startups, what we're going to talk about might not feel the same. You can argue that the bar got much higher for VC firms as well as for startups. It's definitely a different world versus 2021, where things were good for mostly anyone. NunoBasically, if we look a little bit at funding sources to startups, obviously, traditional VCs have reduced dramatically, which is not surprising as we were talking about before. Angel investors and seed funds also had a reduction. Obviously, as you could imagine, if people, very high net worth individuals are normally angel investors and microfunds normally are smaller, they obviously had the tension of reducing their pace of investment, maybe in their own new fundraising cycles themselves for new funds. Large corporations had reached very aggressive activity back in the day in 2021, but now there's a little bit more moderation happening to it. Then obviously, we've seen family offices coming more into the market in the last few years and being more aggressive around directs. How does that landscape look to you, Bertrand? BertrandI think it's definitely right. Maybe another piece of the puzzle is that if you look at some US investors going to Europe, for instance, expanding internationally or to China, it went back. Many firms, if you take in China, separated from their Chinese office. If you think about investment in Europe, so many reduced, actually, their investment in Europe. So quite typical that when things are good, you try to go pretty global, you try to expand, and when things are tough, you go back to your core. I guess China is a bit different story. It's more for geostrategic reason. But you could argue the landscape also has changed dramatically locally there. NunoIt's also true, obviously, of what we've seen in terms of the sectors. We've just talked about AI and deep tech in general, where it's been booming, and it's basically stood up. Some of the numbers would be that AI deals are 35.7% of all global VC deal value. By value, it's incredible, which is record. But it's not true of everything else. If we look at other sectors, for example, crypto, there was a bust and there's no recalibration, and it's not true across the board in terms of sectors. BertrandCrypto, for sure, went through a huge burst. This one, you could argue, was mostly caused, at least in the US, by the action of the regulators from the SEC and others casting a cloud on the industry. I wonder how much it will go back to a boom, actually. Right now, now that we have someone who might be the first pro-crypto president in the US. What do you think? NunoWell, I won't comment on the present being pro-crypto or not. I think we might see a re-acceleration of crypto this year, in particular because there's a lot of uncertainty geopolitically around the world, et cetera. Normally, I'd say that's a clear tailwind for it. The regulatory environment, at least in the US, seems like it's going to get further clarified. If it does, I think we'll see a great year for crypto in the US. BertrandWe have climate tech and clean energies. I guess this one, we have seen the number since the funding fell, actually, pretty significantly in 2023, 30-40% before the year before. My guess is that this is going to change very significantly for very different reasons in US and Europe. If you take the US, all this ESG stuff is going to decrease significantly for investment related to it, because definitely this is not something that's supported by the new administration. We can remember the drill, baby drill mantra. It's not totally pro-climate tech or clean energy. I would expect much less investment there and actually a reallocation to more traditional energy source. But in Europe, it might be changing for very different reasons, simply because there is no money and there is a lot more actually investment that might go to defence spending. There have been a lot of talks in that direction the past few weeks. The last I was hearing actually is a willingness to dramatically change the meaning of ESG or potentially drop it all together in Europe. Most people might know this movement started and has been extremely strong in Europe. I started hearing that, yes,...

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The current landscape of fundraising for start-ups, companies and VC funds, as well as best practices and hacks… and how to get those investors to giving you the money.Navigation:Intro (01:34)What is the current evolution and landscape for fundraising for start-ups?What is the current evolution and landscape for fundraising for VC firms?What are the best practices - strategies, processes, tactics and hacks - for fundraising overall … for start-ups?What are the best practices - strategies, processes, tactics and hacks - for fundraising overall … for VC firms?How to get investors (VCs and LPs) to commit to giving you money?ConclusionOur co-hosts:Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmittNuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedroOur show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news
Subscribe To Our Podcast

BertrandHello and welcome to Tech Deciphered episode 63. In this episode, we are going to talk about the evolution and the current landscape of startups and VCs fundraising. We will talk about this evolution and landscape for fundraising, both from a startup and VC sides. We are going to talk about the best practices, strategies, process, tactics, and hacks for fundraising on both sides when you are a startup or when you are a VC firm. And ultimately, we will finish on how to get investors to commit to give you money. Hi, Nuno. How are you? NunoHey, Bertrand. We'll start with the evolution and current landscape of startup fundraising. It's been a couple of exciting years. We got to the height of it all, the bull of all bull markets, actually in 2021, post-COVID. Then we had 2022 and 2023. Very sharp correction, dramatic reduction in venture investments. '24 was a good year. It's a year that scaled back again, seems stabilizing. I think we'll see what '25 has on hold. My prediction is that it's going to be a great year. BertrandYeah, 2021 was pretty shockingly good post the start of COVID. After a sharp wait and see by end of 2020, things were going back not just to normal, but to overdrive. It's really by the end of 2021 that the music stopped. We had to worry about inflation with interest rates going up. 2022 was definitely bad for startups and VCs alike. But as you said, 2024, we are back to a better place. I would have the same bet for 2025, as you have, Nuno. NunoOne interesting piece is there's something that I think changed everything in 2024, which is AI. If we didn't have AI in 2024, I don't think we would have had this landscape. Important to note, and we'll talk about it later on when we talk about the landscape for actual VC fundraising, that the way that VCs work in their cycles and how they raise money, there's always a little bit of a lag around the table. It means there's still a lot of what we call dry powder with VC firms. This means that VC firms have raised quite a lot of money from limited partners for 10-year funds with, for example, four-year investment periods. Therefore, they still need to deploy capital in whatever market they're in. The fact that there were a lot of AI opportunities means that they've been deploying a lot towards, for example, AI place. That's going to change as well. We'll talk later about, again, the VC fundraising landscape, but there's going to be a little bit of an adaptation on those two time lags around the table. But for me, the big effect of 2024 was without a doubt, AI. BertrandYeah, and it's very interesting because when you think about it, the new AI revolution started with LLMs, with OpenAI launching ChatGPT. And this is an event that actually started end of 2022. So that AI revolution, financing, fundraising, actually started in 2023. But at that time, it was still so bad from an overall macro perspective that it was not enough to change the big trends. But at the same time, for sure in 2024, I think it had time to turn around. We'll talk more precisely about the numbers, but it's pretty clear that, as you say, AI has taken over. NunoThe height of it from the numbers we have in mind shows that on a global basis, 2021 was the all-time high in terms of startup investing at 750 billion. We've now had a significant reduction, basically around 349 billion, if the number is around correct, but certainly as deep as that in 2023, returning basically to levels that we saw back in 2018-2020. 2024, we went back up to around 370 billion. I think this year is going to be higher as we discussed before. One clarification I would say, a lot of people would say, Is that true across the board? Is everything being equally dispersed? Not really. We've seen that early stage has suffered more. Mid to late stage, in particular in 2024, had another peak. Not peak year, but had a significant amount of capital was really deployed in mid to late stage investing. Last year, backing projects that either were already on their way or projects that are around what we would consider structurally AI, and therefore that are much more capital-intensive even if they're earlier stage. BertrandIt's also more going to the bigger firms, if I'm not wrong here. It's more to the bigger firms. In terms of investment, I guess it was also more to the bigger startups, if you pick an operator AI, for instance. I guess it has been actually pretty tough. If you are not one of the top 20 VC firm, if you are not one of the top 20-50 AI startups, what we're going to talk about might not feel the same. You can argue that the bar got much higher for VC firms as well as for startups. It's definitely a different world versus 2021, where things were good for mostly anyone. NunoBasically, if we look a little bit at funding sources to startups, obviously, traditional VCs have reduced dramatically, which is not surprising as we were talking about before. Angel investors and seed funds also had a reduction. Obviously, as you could imagine, if people, very high net worth individuals are normally angel investors and microfunds normally are smaller, they obviously had the tension of reducing their pace of investment, maybe in their own new fundraising cycles themselves for new funds. Large corporations had reached very aggressive activity back in the day in 2021, but now there's a little bit more moderation happening to it. Then obviously, we've seen family offices coming more into the market in the last few years and being more aggressive around directs. How does that landscape look to you, Bertrand? BertrandI think it's definitely right. Maybe another piece of the puzzle is that if you look at some US investors going to Europe, for instance, expanding internationally or to China, it went back. Many firms, if you take in China, separated from their Chinese office. If you think about investment in Europe, so many reduced, actually, their investment in Europe. So quite typical that when things are good, you try to go pretty global, you try to expand, and when things are tough, you go back to your core. I guess China is a bit different story. It's more for geostrategic reason. But you could argue the landscape also has changed dramatically locally there. NunoIt's also true, obviously, of what we've seen in terms of the sectors. We've just talked about AI and deep tech in general, where it's been booming, and it's basically stood up. Some of the numbers would be that AI deals are 35.7% of all global VC deal value. By value, it's incredible, which is record. But it's not true of everything else. If we look at other sectors, for example, crypto, there was a bust and there's no recalibration, and it's not true across the board in terms of sectors. BertrandCrypto, for sure, went through a huge burst. This one, you could argue, was mostly caused, at least in the US, by the action of the regulators from the SEC and others casting a cloud on the industry. I wonder how much it will go back to a boom, actually. Right now, now that we have someone who might be the first pro-crypto president in the US. What do you think? NunoWell, I won't comment on the present being pro-crypto or not. I think we might see a re-acceleration of crypto this year, in particular because there's a lot of uncertainty geopolitically around the world, et cetera. Normally, I'd say that's a clear tailwind for it. The regulatory environment, at least in the US, seems like it's going to get further clarified. If it does, I think we'll see a great year for crypto in the US. BertrandWe have climate tech and clean energies. I guess this one, we have seen the number since the funding fell, actually, pretty significantly in 2023, 30-40% before the year before. My guess is that this is going to change very significantly for very different reasons in US and Europe. If you take the US, all this ESG stuff is going to decrease significantly for investment related to it, because definitely this is not something that's supported by the new administration. We can remember the drill, baby drill mantra. It's not totally pro-climate tech or clean energy. I would expect much less investment there and actually a reallocation to more traditional energy source. But in Europe, it might be changing for very different reasons, simply because there is no money and there is a lot more actually investment that might go to defence spending. There have been a lot of talks in that direction the past few weeks. The last I was hearing actually is a willingness to dramatically change the meaning of ESG or potentially drop it all together in Europe. Most people might know this movement started and has been extremely strong in Europe. I started hearing that, yes,...

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