The first half of 2025 delivered a reset in pace but not in ambition. Capital concentrated in fewer, larger rounds, led by AI and hard-tech; valuations recovered modestly; and the exit window began to crack open. As teams plan Q4 outreach, the market is rewarding sharper narratives, disciplined milestones, and tight round construction.
Where the year stands
Global venture funding stepped down from an outsized first quarter to a more “normalized” second quarter. KPMG estimates global VC investment fell from $128.4B in Q1 to $101.05B in Q2, with the U.S. capturing nearly 70% of Q2’s capital and hosting all six $1B+ rounds (AI, defense tech, and space tech dominated the top deals). KPMG
Other datasets show the same shape. Crunchbase pegs Q2 global funding at $91B, up year over year and heavily skewed to the largest checks. Its most recent monthly cut shows August dropping to $17B (lowest since 2017), a reminder that momentum in 2025 has been punctuated by valleys between marquee raises. Crunchbase News+1
Inside rounds, quality is winning. Carta’s Q2 report shows round count down 13% year over year and total cash raised down 5%, but with levels holding within a relatively tight band for ~10 quarters—supporting the view that activity has stabilized around a smaller set of higher-conviction bets. Carta
Price discipline is still visible in term sheets. Cooley’s financing review reports roughly 20.5% down rounds in Q2 (flat ~7%, up ~72%), off lows but consistent with a selective market. Cooley
Sector signals
The outliers continue to define the narrative. AI infrastructure and dual-use/defense tech absorbed the largest checks, with fintech showing renewed traction in later-stage names. KPMG highlights billion-dollar raises across AI and defense tech and notes fintech IPO prints in Q2 as a constructive signal for late-stage sponsors weighing exit paths. KPMG
Exits and the path to liquidity
The exit window is not “open,” but it is opening. Renaissance Capital’s fall preview points to a re-accelerating U.S. IPO calendar post-Labor Day, with the Renaissance IPO Index up ~16% year-to-date and dozens of issuers restarting roadshows—an important barometer for late-stage venture reflexes heading into Q4. Renaissance Capital
What to expect in Q4
1) More barbell dynamics. Expect continued concentration: large, AI-adjacent raises and disciplined seed checks on one end; a thinner middle on the other. For founders, this favors unambiguous positioning and crisp proof points tied to efficiency and durable unit economics.
2) Selective valuation recovery. With round counts subdued and cash levels relatively steady on platforms like Carta, we anticipate additional valuation healing at seed and A, with tighter dispersion at B/C. Teams that demonstrate capital efficiency plus line-of-sight to scale will capture the most upside. Carta
3) A cautious but busier exit tape. If early September IPO pricing holds, expect a modest pickup in late-stage term sheets aimed at 2026 exits. Q4 could show more public prints and M&A in AI, security, and infra as strategics lean in and crossover investors re-engage. Renaissance CapitalCrowdfund Insider
4) Process quality matters more than volume. The August lull underscores how 2025 rewards preparation over pace. Clean data rooms, clear use of proceeds, staged milestone plans, and well-telegraphed governance remain the fastest way to compress diligence cycles. Crunchbase News
How founders should approach the quarter
Anchor Q4 outreach around crisp, defensible milestones—revenue quality, margin progression, or product adoption curves that tie directly to the next 12–18 months of value creation. Keep rounds sized to proof, not aspiration, and align syndicates around a shared view of the next checkpoint. Where relevant, sequence strategic partners who can accelerate distribution or cost leverage.
About Fidelman & Company
Fidelman & Company is an investment bank focused on venture-backed and growth companies. We combine sector research, investor targeting, and disciplined process management to help founders raise capital efficiently.
Planning a Q4 raise? Contact us to review timing, investor fit, and the materials that resonate in today’s market.
