Venture Capital as an asset class is in a tough spot. Based on the Q1 2025 Pitchbook-NVCA Venture Monitor, Venture fundraising in Q1 2025 dropped sharply, with only 87 funds raising $10B, as capital concentrates in top geographies and LPs increasingly back fewer, more established managers. With exits stalled and liquidity constrained, the venture landscape appears to be recalibrating around a new baseline of selectivity and caution. I covered some of these struggles in Jan 2025 in my post “The concentration of venture capital in 2025“.
As a result, or perhaps, as a natural evolution of the asset class, the venture capital landscape is currently undergoing significant change, moving beyond the traditional model to embrace new strategies and structures. Major firms are leading this evolution starting in the valley, but I suspect we’ll start seeing the change in Europe too.
One key shift is VC firms becoming Registered Investment Advisors (RIAs). This regulatory status allows firms like Lightspeed Venture Partners, Sequoia Capital, Andreessen Horowitz, and General Catalyst to invest a greater proportion of their capital (more than 20%) into a broader range of assets beyond just direct startup equity, such as public and secondary shares, and even cryptocurrencies. Andreessen Horowitz became an RIA in 2019, and Lightspeed recently completed the process, following suit. Lightspeed, for example, is now dedicating more capital and has hired staff specifically for secondary market strategies.
Firms are increasingly adopting private equity-style strategies, including serial acquisitions or “roll-ups”. The focus is shifting from solely investing to actively creating and acquiring companies, often with a strong emphasis on using AI to transform these businesses. General Catalyst, now preferring the title “global investment and transformation company”, explicitly supports “A.I.-enabled roll-ups”, acquires larger stakes in startups, and even creates AI-native companies in-house.
Thrive Capital is another firm adopting some private equity strategies and is also an RIA. Earlier this week, Thrive launched a new vehicle called Thrive Holdings. This entity is specifically designed to start and acquire companies that can benefit from AI, with the intention of holding onto these assets for a long time, potentially “forever”. Thrive plans to focus heavily on operating these businesses, leveraging its team of software engineers and ties to AI companies like OpenAI. Thrive is raising about $1 billion for this initial effort, with a focus on transforming “everyday industries”.
Beyond investment strategies, firms are also diversifying into new business areas like wealth management (General Catalyst, Andreessen Horowitz) and, in a highly unusual move, General Catalyst is in the process of acquiring a healthcare system in Ohio. General Catalyst has also purchased smaller venture firms.
Looking ahead, there is speculation that some of these heavyweight firms may consider an Initial Public Offering (IPO), following the path of private equity giants like Blackstone and KKR. General Catalyst is reportedly weighing a potential IPO, according to multiple sources. While other large VC firms haven’t yet taken official steps, an IPO is seen as a potential next phase for the industry.
These changes are driven by the overall growth and increasing competition within the VC landscape, as well as the perceived transformative potential of artificial intelligence. The venture capital industry is clearly in a period of significant evolution.
He is a former General Partner at Google Ventures (GV) in Europe, former head of Google for Entrepreneurs in Europe, and founding head of Campus London, Google's first startup hub. Eze writes on Israeli tech, venture capital, artificial intelligence, and founder strategy.
He is also the founder of Techbikers, a nonprofit that brings together the startup ecosystem on cycling challenges in support of Room to Read.
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