The VC Comeback: What Founders and Investors Must Know About Venture in 2025

The VC Comeback: What Founders and Investors Must Know About Venture in 2025

Venture isn’t “back to 2021.” It’s back to discipline. Capital is moving again across North America and Europe—but through tighter gates. LPs are buying DPI over deck craft. GPs win on pacing, reserves, and governance. Founders who separate evidence from adjectives are clearing rounds; those who don’t, aren’t.

This is Altss’s operator-grade view of the market—built on OSINT signals (filings, regulator releases, fund launches, hiring, portfolio moves, domicile shifts) and what we see allocators actually doing week to week. We center North America and Europe (where most of your raises will live), then zoom out to MENA and APAC where capital, buyers, and domiciles increasingly shape outcomes. Where hard facts matter (rates, regulation, public programs), we cite them; the rest is our analysis so you don’t have to borrow anyone’s narrative.

Where the macro really bites (and helps)

Europe. The ECB left its key rates unchanged on September 11, 2025—deposit 2.00%, MRO 2.15%, marginal lending 2.40%. Financing is easier than 2023, but committees are still underwriting to a higher discount-rate world than 2021.

United States. On September 17, 2025 the FOMC set the federal funds target range at 4.00–4.25%, with administered rates aligned accordingly. Rate path debates aside, the message for venture is simple: underwriting standards aren’t going back to ZIRP.

Why this matters: With price of capital anchored above the 2021 era, marginal theses price out. The bar has shifted from “big category” to “underwritable milestone in 4–6 months.” Plan your round, your timing, and your ask around that constraint.

North America: what’s actually working

1) The IPO door is reopening—selectively, at new prices

U.S. ECM bankers, exchanges, and sponsors all say the quiet part out loud: the window is moving, not wide. By mid-September, U.S. IPO proceeds already surpassed 2024’s total (Dealogic via Reuters). Expect more 2025 prints and a heavier 2026 slate—but at cut-price levels versus peak cycles.

Operator take: Treat IPO optionality as leverage, not doctrine. Build dual-track readiness (trade sale and listing) and keep cash conversion tight so you choose the door rather than get pushed through one.

2) Late-stage is “safe,” but only on proof

Nine-figure checks are back in AI infrastructure, cybersecurity, fintech rails, and climate adjacencies. The underwriting package:

• Auditable ARR (often $10M+) and cohort health,
• A signed path to margin lift (not a promise),
• Enterprise-grade GTM (channels, services attach, compliance posture).

This is a re-rating to evidence, not a retreat. The smartest teams write their two-outcome story on day one: credible strategic M&A or sustainable stand-alone.

Altss angle: We track who’s actually writing Series C–D checks this quarter and where they sit on fund age/unrealized—so you spend time on capacity that’s real.

3) Early-stage: SF pre-seed at $20–25M caps exists—but it’s an outlier

San Francisco AI pre-seed $20–25M caps are real in a thin top-decile band (repeat founders, frontier pedigrees, paid design partners, clean data rights). The market’s center of gravity hasn’t moved there.

• Medians remain far lower: Carta’s reads show pre-seed SAFE caps clustering around $7.5–10M and seed medians around $16M in 2025. Treat $20–25M as exception-pricing, not a baseline.

If you’re targeting a high cap: keep the raise modest and the process tight—or you’ll invite priced-round scrutiny at seed-level metrics.

Altss angle: We separate the few funds actually paying $20–25M caps in Bay Area AI this quarter from the broader pool underwriting $7.5–12M pre-seed and $16M seed—so you pitch at the right altitude.

4) Founder financing mix is getting sharper

• Angels & operator syndicates are organized (rails, diligence templates, async decisions). Treat them like micro-ICs: one metric, one learning, one next step—sent on time.
• Venture debt / non-dilutive credit is a runway tool, not belief money. Only borrow against dated milestones (launch, cert, channel) you control; stage with delayed-draw.
• RBF smooths working capital; cap it as a % of MRR/GMV and model effective APR in stress, not base case.

Canada watch: Non-dilutive is real. The SR&ED program offers 15% ITCs (with 35% refundable for eligible CCPCs) and is under active policy attention in 2025, with consultations to broaden access. For capital plans that mix grants with equity, this matters.

Europe: the selective spring

1) From AI exuberance to vertical AI + compliance

European buyers are writing checks where AI is embedded in regulated workflows: industrial automation, supply-chain orchestration, diagnostics with audit trails, financial crime/KYC, legal ops. The EU AI Act sets the frame:

• Entered into force Aug 1, 2024;
• Prohibitions & AI literacy obligations in force Feb 2, 2025;
• GPAI model obligations from Aug 2, 2025;
• Full applicability Aug 2, 2026 (with extended transition for embedded high-risk systems).

Translation: If your deployment story can’t survive an audit, you’re not clearing IC in 2025–2026.

Altss angle: Our OSINT tagging distinguishes vertical AI from generic GenAI by mapping reference customers, data-rights disclosures, and regulated endpoints—so allocators filter to defensibility and founders target funds that actually buy vertical theses.

2) Climate is core portfolio infrastructure, not an ESG sleeve

Capital is concentrating where climate looks like infra: grid software, long-duration storage, industrial heat, process electrification. Public money is underwriting adoption risk:

• EIC Work Programme 2025: EIC Accelerator budgets (including Open and Topics) and the STEP scale-up scheme (2025 budget €300M, targeting €10–€30M equity per company to crowd in €50–€150M total).
• EU Innovation Fund (Jul 22, 2025): ~€319M additional grants signed for six industrial decarb projects—concrete, near-term support on top of a larger multi-year pipeline.

Operator take: Grants + offtakes + project debt under equity compress perceived risk and speed yes/no decisions. If your climate pitch doesn’t show the blended-finance logic, it’s incomplete.

3) Domicile choice is now a mandate signal

LP counsel are reading structure as a proxy for operating maturity and time-to-close:

• Luxembourg RAIF (Law of 23 July 2016): not product-supervised by CSSF but must be managed by an authorised AIFM; AIFMD passports via the AIFM. CSSF Circular 25/894 (Jun 2025) clarifies information Luxembourg IFMs must submit when managing non-authorised funds—including RAIFs. Net: speed + institutional comfort.
• Jersey Private Fund (JPF): July 2025 enhancements removed the 50-investor cap (replacing it with a “restricted group” test) and introduced 24-hour authorisation for complete applications—practical changes LPs notice.
• Guernsey PIF: proportionate, fast-track regime well suited to clubbier bases and quick first closes.

Altss angle: We monitor registrations, manager launches, and domicile drift so you select the wrapper your LPs already trust—before you burn calendars.

4) Public markets are stirring—build optionality

Listings are trickling back across London, Frankfurt, Amsterdam. Don’t build a single-door plan. If your liquidity story only works in one venue, it’s not bankable. Keep trade-sale and listing tracks warm in parallel.

Altss angle: Identify managers rotating distributions; target LPs reopening commitment windows to 2018–2019 vintages; time outreach to re-up cycles, not end-of-year noise.

Cross-region trendlines that actually change behavior

A) Family offices are decisive—in both regions

Across North America and Europe, family offices are writing conviction checks into AI infra, climate/industrial decarb, dual-use/cyber, and specialty health. They rotate sleeves intra-year, expect co-invest delivery as a product, and pass fast when outreach ignores their deployment window.

Altss coverage: 9,000+ verified family offices globally, refreshed on a ≤30-day cadence. OSINT flags new sleeves and side pockets, maps warm paths (advisors/boards/syndicates), and ties activity to mandate timing—so you stop pitching into closed windows.

Pricing: $15,500/year. No exports. No open API. Data stays accurate and compliant.

B) Co-invest and continuation mechanics are normalized

From Boston to Berlin, LPs expect co-invest rights they can actually exercise and liquidity tooling (NAV, GP-leds) discussed as design, not emergency. If these aren’t explained in your deck, diligence expands and momentum dies.

C) Narrative clarity is a performance factor

Every deck says “AI-powered.” The funded ones show before/after workflow economics in ten seconds, data-rights chain in one read, and a deployment plan that anticipates the EU AI Act timeline (prohibitions Feb 2025; GPAI rules Aug 2025; full applicability Aug 2026 with exceptions).

MENA and APAC: what to factor in—even if you’re raising from NA/EU

MENA. Gulf family offices and sovereign-adjacent platforms continue to lean into compute, climate infrastructure, logistics, defense-adjacent technologies, and specialty healthcare. Domicile familiarity (Jersey/Guernsey/Lux/ADGM/DIFC structures) and co-invest logistics accelerate yes/no decisions. Outreach works when you map industrial adjacency (e.g., energy grid, desalination, critical cargo) rather than generic AI claims.

APAC. Singapore remains a friendly base for funds and corporates courting Southeast Asia growth—with buyer appetite in fintech infrastructure, logistics automation, climate adaptation, and industrial software. Japan’s corporate balance sheets are again active in strategic M&A; when your product de-risks quality, safety, or energy efficiency, conversations move. In both geographies, the same rule applies: match instrument to mandate (direct, co-invest, fund commitment) and respect compliance (KYC/UBO before the warm intro).

Altss angle (both regions): We tag newly formed family offices and corporate buy programs by theme, map their warm paths to your network, and flag sanctions/AML indicators to keep reputational risk out of your process from day one.

The 90-day plan (works in the U.S., Canada, UK/EU—adaptable elsewhere)

Days 0–10 — Write the underwritable plan.
Pick one milestone you can hit in 4–6 months that an IC will buy: enterprise channel with defined payback; certification tied to a buyer; margin step-up proven in cohorts. Draft a two-page capital-efficiency memo (use-of-proceeds, pacing, reserves, hires).

Days 11–30 — Build the heat map.
In Altss, filter to allocators in-window for your sector, instrument (fund vs. direct vs. co-invest), and ticket. Add late-stage buyers with capacity for your round size, family offices with live sleeves in your theme, and CVCs with an operational champion.

Days 31–60 — Ship evidence, not adjectives.
Replace narrative decks with audited ARR/cohorts, pipeline/LOIs, data-rights contracts, security posture, and a co-invest delivery one-pager (selection → governance → timelines → examples). If you’re climate or deeptech, include the blended-finance map (grants, offtakes, debt under equity).

Days 61–90 — Run a disciplined process.
Time-box partner meetings; keep an angel/syndicate lane warm; use Altss intent signals to sequence follow-ups the week targets flip to active. Announce only after docs + wires.

Founder and GP FAQs (2025–2026 edition)

Are SF pre-seed caps really $20–25M now?
Sometimes—for the top decile in Bay Area AI (repeat founders, paid design partners, clean data rights). Across the market, pre-seed caps cluster near $7.5–10M and seed medians around $16M in 2025. Price to what an IC can underwrite.

How should I use venture debt without getting burned?
Borrow against dated, controllable milestones (launch, cert, channel), not hope. Stage with delayed-draw and model covenants against your actual volatility, not your best quarter.

Is climate still investable at scale, or is it grant-dependent?
It’s investable where it looks like infrastructure (grid, storage, industrial heat) and where public programs de-risk adoption. EIC/STEP and the EU Innovation Fund are underwriting real assets—don’t pitch climate without a blended-finance plan.

Does domicile really change outcomes?
Yes: it changes time-to-close, distribution rights, and LP comfort. RAIF with an EU AIFM for AIFMD travel, JPF or PIF for clubbier bases and speed. Domicile reads as a proxy for operational maturity—choose it like a product, not a checkbox.

What single macro datapoint should I track weekly in Europe and the U.S.?
Policy rates (ECB at 2.00% deposit; Fed 4.00–4.25% target range as of mid-September). They won’t write your round, but they set the discount-rate backdrop your committee uses.

The Altss difference—how teams convert signal into closes

• Mandate timing: Know who is actually deploying this quarter—by sector, check size, and instrument.
• Warm paths: Turn cold lists into conversations with advisor/board/syndicate overlaps.
• OSINT signals: Filings, corporate registers, regulator feeds, hiring and portfolio moves flag intent before the banker email arrives.
• Continuously refreshed coverage: 9,000+ verified family offices plus targeted institutional/corporate profiles, refreshed on a ≤30-day cadence.
• Built for control: No exports. No open API.
• Pricing: $15,500/year.

Altss in one line: capital formation that respects the market’s clock.