This article discusses the predictions and insights from several venture capital experts on what to expect in 2025 for startups and the venture capital industry. Here are some of the key points:
Trends that will continue:
- The trend towards greater diligence and meaningful value-add from investors, rather than a "spray-and-pray" approach.
- The continued dominance of AI companies in attracting investor attention at premium valuations.
- The perceived short list of winners in the AI space commanding significant investor attention.
Trends that will decline:
- The spray-and-pray investment approach.
- Consumer applications receiving less funding, as enterprise SaaS companies continue to dominate.
Unexpected events that could happen:
- Mergers or closures of big-name unicorns due to cash flow issues.
- A significant climate-related disaster, geopolitical conflict, or economic shock fundamentally reshaping the startup and VC landscape.
- OpenAI converting to a for-profit entity for Microsoft to acquire it in the largest acquisition ever.
Hard tech becoming more attractive:
- With software becoming commoditized due to generative AI, venture dollars may shift towards hard technology, including bio, hardware, and other deep tech areas.
Overall, the experts predict that 2025 will be a year of greater focus on sustainable business models, profitability, and meaningful value-add from investors. However, there are also potential risks and surprises that could shake up the industry.