Tomorrow’s Fortune

Welcome to the action-packed newsletter designed to help you navigate the world of business and investing. If you missed last week’s post, check it out here. 😎 

Today’s Digest: 

• The Rise and Fall of Venture Capital: Silicon Valley is quiet… no major IPOs… and funds shutting down. What’s really happening to early stage investing?

• What’s Happening in the Markets? Treasury benefitting from tariffs, Texas Floods highlight insurance problem, IMAX on the rise and Nvidia hitting $4T

• Wanna Buy a Business? We found a cash flowing disaster restoration franchise in Plano, TX ($269K of Cash Flow). Click HERE for the listing

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TOP STORY

The Rise and Fall of Venture Capital…

What happened?
Half a decade ago, venture capital was the sexiest seat in the asset management house. Today, it's fighting to prove its relevance in a world that may no longer need it.

The Boom: When Venture Was King

From 2015 to 2021, venture capital was riding high. Record-breaking fundraising, billion-dollar IPOs, and eye-watering startup valuations defined an era that rewarded optimism, speed, and risk. Every GSuite-heavy deck pitched the next unicorn. Emerging managers were raising their first funds left and right, supported by LPs eager to find the next a16z before it went institutional.

In 2021 alone, VCs deployed over $340 billion in the U.S. market—a nearly 2x jump from the previous year. It was the golden age of access: capital was cheap, check sizes were growing, and being early became more valuable than being right.

But more than capital, the real boom was belief. LPs believed in the asset class. Founders believed in valuations. And VCs believed in themselves.

The Bust: Valuations Crash, and So Does the Model

Then came the comedown.

By 2022, the tech market correction hit venture like a freight train. Late-stage deals got slashed, IPO windows slammed shut, and valuations spiraled downward. Some high-flying startups were down 70–90% on paper.

The fallout wasn’t just a markdown problem—it was existential. With no IPOs and limited M&A activity, venture funds stopped distributing. LPs stopped allocating. And a business that relies heavily on paper markups and momentum suddenly found itself staring at a wall.

According to recent data, 44% of VC dollars raised in 2024 went to just two firms, and up to 50% of existing VC firms may shut down in the next decade, according to Josh Wolfe. Emerging managers—the supposed heart of venture innovation—are either folding, merging, or trying to look like mini-versions of the megafunds that control the downstream capital.

The once-fragmented, experimental world of venture capital is consolidating into a homogeneous machine, optimized for AUM, not alpha.

The Consequences: No Cash, No Conviction

This collapse isn’t theoretical. It’s systemic.

• Distributions have dried up — limiting LPs’ ability or appetite to re-up.

• Fundraising is brutal — especially for small firms without deep ties to legacy institutions.

• The middle is hollowing out — emerging funds can't lean in, but can’t compete either.

• And founders? They’re caught in the middle, with fewer partners willing to lead rounds or stick around for the hard years.

What we’re witnessing is the slow-motion erosion of venture as a craft business. Original conviction is being replaced by consensus follow-on investing. Real differentiation is being smoothed over by templated strategies and recycled slide decks. Venture, once an asset class defined by idiosyncratic bets, is becoming indistinguishable from large-cap private equity—just earlier stage and higher risk.

What Now? The Future of VC in an AI-Native World