Sasha Bondar

What’s really happening in the venture capital industry: observations from 100+ conversations Over the past 3 months, I’ve had nearly 100 conversations with VCs — around 30% in person, 60% in one-on-one calls, and the rest during group trips, lunches, dinners, or informal meetups. I want to share 5 key takeaways that consistently surfaced — not my own forecasts (those are for later), but the consensus among experienced people in the field. TL;DR: This is not just another crisis. It's a transformation. 1. The end of low-rate-driven venture growth When central bank rates (especially the Fed's) are high, risk appetite drops. Investors seek safer assets, not VC funds that aim for 4x in 10 years (a rough 15% CAGR). As current fund vintages run out, we may see a multi-year gap before new ones emerge — especially if rates stay elevated. This could severely thin the funding pipeline in 2025–2026. 2. Tier-0 funds shifting to private equity Top firms like Sequoia and a16z are moving toward larger, later-stage deals and even into PE territory. IPOs are rarer, larger, and happen later. LPs still want “big stories,” and Tier-0 funds are now open to a broader investor base — plus firms like BlackRock are stepping in. That’s pulling capital away from early-stage VCs, making fundraising brutally hard for new or smaller funds. 3. The AI paradox: everything is at risk Founders fear (rightfully) that anything they build today can be commoditized by foundation models tomorrow. Even if you build on top of an LLM, that’s no longer a moat. Funds hesitate to invest in areas that might soon be swallowed by general-purpose AI. This uncertainty is a huge factor behind the sharp drop in deal volume. 4. LLM investments are massive — and extremely risky Check sizes in AI are out of reach for most funds. At the same time, the market can’t absorb the sheer number of AI startups chasing the same endgame. In 3–5 years, we’ll see high-profile failures. And that’s before the next generation of models arrives and makes today’s leaders obsolete. 5. De-globalization is here A new Trump term, trade wars, global military tensions — all of this pushes VC toward fragmentation. We're seeing the early breakdown of a once-global ecosystem into distinct US, EU, and Asia silos. The free movement of capital and talent is no longer a given. Nobody I spoke with believes globalization will bounce back anytime soon. Bottom line: the current market is a headless chicken. It’s still moving — but with no direction. Everyone expects some clarity by the fall, but nobody's betting on a quick rebound or return to the old normal. We're likely entering a very different era for venture — structurally, financially, and geographically. More thoughts soon. Curious what others are seeing — do these signals resonate with you? | 17 comments on LinkedIn