Stay savvy, startup founder: The venture capital landscape exists in a constant state of ebb and flow. Fidelity Private Shares can help you make sense of what’s trending and what’s getting washed away with the tide.
For founders, the latest trends don’t revolve around viral videos—unless venture capitalists say they do. Then those videos are the most important thing in the world.
That’s because savvy founders understand they need to know what VCs care about if they want to secure funding. Trends come and go, but if you’re not up to date, you’re falling behind. Thankfully, you don’t need to spend hours poring over social media content, news stories, or LinkedIn feeds to keep up. Fidelity Private Shares, in collaboration with Pitchbook, did the heavy lifting for you with their Top Venture Capital Trends Startups Should Watch in 2025 report.
In the same way you can’t explain what a viral TikTok sound is without first explaining the platform, these trends don’t make a ton of sense unless you understand where VC is at this moment. So, let’s survey the landscape.
Where do we grow from here?
After COVID-19 (something that only kinda-sorta impacted the global economy), we saw what’s now referred to as the boom era. From 2021–22, the MO was growth at all costs. Investors looked at YOY growth as the key metric, and founders raised large rounds of funding at sky-high valuations. Then, something happened.
Expectations shifted away from growth and toward operational durability. According to Fidelity Private Shares, by 2024, funding timelines stretched. The median time to close a VC round hit roughly two years, up from about 1.3–1.4 years in 2019. Investors became more selective, looking for startups with strong cash flow, solid unit economics, and the ability to do more with less.
So, what does the smart founder do with this information? Well, it’s not very simple, unfortunately. There’s a focus on ensuring businesses are worth their valuations. This means more scrutiny, and the burden of proof is on founders to provide metrics that show they’re in it for the long haul. There’s also a focus on doing more with less, a phrase that gets thrown around a lot. And it has to do with one of the big trends: AI.
AI-driven growth
The robots are taking over! Or it can at least feel that way when you look around. From marketers to manufacturers to content creators to doctors, everybody’s talking about AI. But what does it mean for startups?
“AI deals accounted for 46.4% of US VC deal value and 28.9% of US VC deal count in 2024, creating the illusion of an organic rebound,” Fidelity Private Shares said in their report. “When excluding AI, 2024 US VC activity falls to 10,850 deals closed and $112 billion raised, marking three consecutive years of decline.”
This can lead to a grass-is-always-greener mindset for founders. “If only I was in the Bay Area, if only I did AI, if only I were Waymo!” The truth is, this AI-driven growth makes investors more selective. Startups need to demonstrate defensible technology, real customer traction, and a path to revenue, not just potential. Remember, AI is still a new, evolving technology. If you can deliver fully formed tech that has advantages at this current moment, you can stay ahead of the bots.
Regional delicacies
Much like with food, different regions can now claim they’re the masters of certain industries. Just like how you wouldn’t expect deep-dish pizza in Brooklyn, VCs aren’t expecting AI tools built in the Midwest. We’re seeing three major hubs for different industries, and thus investors are focusing on those areas.
- The Bay Area is the hub for all things AI.
- Boston is the hub for all things healthcare and life sciences (MIT and Harvard are right there).
- New York is the hub for fintech and SaaS.
This doesn’t necessarily mean founders need to pick up shop and move, but it does mean investors are using this info to assess risk and opportunity. In the same way being in a densely populated urban area exposes you to more people and experiences, being in a densely populated urban area with people in your field means you’re at the center of it all. Founders who align with their region’s strengths and understand how local dynamics affect valuation, timelines, and exit paths can be better positioned to navigate today’s VC market.
Where do you get off?
Mergers and acquisitions are now the default path to liquidity, since the IPO window is still rather narrow. According to Fidelity, M&A accounted for over 75% of exits across the major hubs in 2024.
Recent exit trends include:
- M&A growth: Strategic acquisitions remain the most common exit, with the median M&A deal size jumping from $45.5m in 2023 to $192.5m YTD. Valuations are rising for startups that offer a strong strategic fit.
- IPO rarity: IPOs are still on the table for a select few highly scaled companies, but they remain rare and heavily timing-dependent.
So, if you’re a midstage founder and have your eye on acquisitions, early positioning is important. Understanding deal terms and knowing what buyers look for gives you a real edge. According to Fidelity, founders who have secured acquisitions typically emphasize operational strength, customer traction, and alignment with buyer priorities.
There is a ton of data that informs these trends, and to dive deeper, Fidelity Private Shares invites you to go through their reports. They’ve got all the details you need to stay savvy. Additionally, their platform can help you turn these trends into a plan of action. The VC sea isn’t always smooth sailing, but with a trusty guide, you can navigate even the choppiest fundraising waters.