Venture capital in 2025 showed clear signs of recovery—but more importantly, it showed signs of maturity.

Global venture funding increased to roughly $470–$510B, reflecting renewed confidence from investors and improved market conditions . At the same time, the number of deals declined, indicating a shift toward more selective and deliberate capital deployment.

For limited partners, this combination is encouraging. Capital is moving again, but with greater discipline.

A Market Built on Selectivity

Rather than broad-based growth, 2025 was defined by intentional investing. Larger rounds increased, particularly in AI and infrastructure-related companies, while early-stage investing continued to represent the majority of global deal activity.

This signals a healthier venture environment:

• Fewer speculative deals
• More focus on fundamentals
• Stronger alignment between founders and investors

Why a Moneyball Strategy Fits This Market

A Moneyball-style approach—investing in overlooked, early-stage companies with clear traction and reasonable valuations—aligns well with current market conditions.

The data shows consistent gaps in capital allocation across:

• Early-stage startups
• Smaller and emerging ecosystems, including Canada
• B2B, applied technology, and revenue-generating companies

These areas often receive less attention than large, later-stage rounds, yet they continue to produce solid outcomes over time. For LPs, this creates an opportunity to back managers who focus on efficient deployment and portfolio construction, rather than scale alone.

A Constructive Outlook for Limited Partners

Looking ahead to 2026, the venture market appears better positioned than it has been in several years.

Funds investing now benefit from:

• More reasonable entry prices
• Stronger governance expectations
• Founders focused on execution and sustainability

This cycle favours focused funds with clear sourcing advantages, especially those operating close to founders and early traction.

Closing Thought

The venture market did not return to past extremes in 2025—and that is a positive outcome.

Instead, it moved toward a more balanced model where long-term value creation matters more than speed or volume. For limited partners, this creates a clear opportunity: support disciplined managers deploying capital thoughtfully in a market that rewards patience and consistency.

More of these insights in our newsletter and upcoming events.