US Venture Capital (VC) Trends 2025

The US Venture Capital (VC) outlook for 2025 is stronger, driven by rising exits, IPO activity, and stabilized dealmaking. However, challenges like lower valuations and liquidity constraints persist, shaping a cautious recovery. VC is expected to rebound in 2025, driven by AI advancements, recovery in IPOs, a resulting surge in liquidity with LPs, and valuations aligning with historical trends. We expect increased exit activity. Historically, the longest gap between US IPO peaks has been three years, with 2024 marking the end of this cycle. IPO activity is also 39% higher in post-election years, suggesting 2025 will see a resurgence in market activity, as per Wellington Management. A Year of Normalization for IPOs The IPO market for VC-backed firms in 2025 is set to gain momentum, fueled by a record inventory of 57,674 private companies in 3Q24, according to PitchBook. Among these, late-stage and venture-growth startups, ideal candidates for public listings, make up 32.4% or over 18,000 firms. A significant subset of these companies, over 1,000, has not raised another funding round since 2021, indicating readiness to transition to public markets. Additionally, the aging of US unicorns is a critical factor driving this trend.