What you need to know about 2025 VC—in one view.
The Core Truth
The VC market has bifurcated into AI + Defense
The Numbers That Matter
- $366.8B — Global VC 2025 (+15% YoY)
- 65% — AI Share of Capital (Structural dominance)
- $48B+ — Defense Tech (2nd mega-category)
- 53% — Repeat Founders (Trust arbitrage)
- 70% — Time Compression (10-18 mo to $1B)
- 2-3 — Winners/Segment (Consolidation)
Three Things to Remember
1. AI dominance is structural
Not cyclical—LP pressure + GP incentives favor fast AI cycles.
Concentration is the feature, not the bug.
2. Pedigree replaces PMF
Track record is now tradeable asset—AI lab alumni lead.
Trust arbitrage drives allocation.
3. 2026-27 decides winners
Consolidation window opens—position for M&A or scale now.
The window is closing.
The Action Framework
- Pick vertical
- Build fast
- Prove value
- Time exit
- Scale or sell
- WIN 2026
Key Takeaways
- AI dominance is structural — 65% of US deal value, won’t reverse
- Defense tech is VC’s second mega-category — $48B+ deployed, institutionalized
- Speed matters more than ever — 46 companies founding to unicorn in <3 years
- Liquidity returning unevenly — 68 IPOs forecast, M&A exceeding 2021
- 2026 filter is fundamentals-first — Revenue, efficiency, real AI advantage
- Consolidation coming — 2-3 winners per AI segment
- Vertical wins — Horizontal commoditizes; domain expertise captures value
2025 wasn’t a return to normal—it was the emergence of a new normal.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
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