The Dealflow by Founders Capital - Edition 7

Key News and Trends

It’s impossible not to mention the word that’s been on everyone’s mind this week: tariffs. After President Trump’s latest announcement, the U.S. has now imposed 145% tariffs on Chinese imports, while granting a 90-day pause on additional tariffs for goods from other countries. In response, China has raised tariffs on U.S. goods to 125%. The rapid escalation has rattled global markets, sending bond yields higher, equities lower, and FX markets into sharp volatility. We’ll dive into our thoughts in this week’s Founder’s Take.

All eyes on PISCES as the FCA charts its next move. The FCA shared an update on its proposed PISCES platform this week, confirming strong industry interest and plans to fine-tune the model. Final sandbox rules are expected in June, with early feedback now open for prospective platform operators. Read more here.

Tariffs? What tariffs? a16z barrels ahead with a $20B AI fund. Andreessen Horowitz (a16z) is seeking to raise $20 billion for what would be its largest fund yet, and one of the biggest in venture history. The vehicle is expected to focus heavily on AI growth-stage companies, even as President Trump’s sweeping tariffs inject fresh uncertainty into global markets. Read more here.

Musk vs. OpenAI: the courtroom drama no one asked for continues. OpenAI has filed a countersuit against Elon Musk, accusing him of harassment and asking a federal judge to block any further "unlawful and unfair" actions as part of their ongoing legal battle over OpenAI’s shift to a for-profit model. Read more here.

Founder’s Take: Private Markets at a Turning Point

Markets have had a turbulent week, with sharp swings across major indices. The primary driver? The U.S. 10-year Treasury yield, which climbed to a fresh multi-month high before retreating slightly. Yields serve as a key barometer for broader investor sentiment - higher yields tighten financial conditions, making risk assets like equities less attractive and amplifying volatility.

The private markets are already feeling the ripple effects of rising uncertainty.

Klarna, StubHub, Chime, and others have hit pause on IPO plans. M&A activity is slowing as buyers and sellers struggle to align on valuations. Private credit spreads are widening, and valuation resets are gathering pace as investors sharpen their focus amid the volatility.

But volatility breeds opportunity. Here’s what we anticipate in the months ahead:

Historically, moments like this catalyse the best private market vintages. Investors with dry powder can back resilient businesses at attractive valuations, while secondary markets offer early-mover advantages as LPs seek liquidity. We expect secondary deal flow to pick up sharply over the next 6-12 months, and believe this will be one of the best entry points for long-term private market investors in years.

Top Venture Deals

Base Power – $200M Series B (a16z, Addition, Lightspeed, and Valor Equity Partners)

• Base Power raised $200 million in a Series B led by a16z, Addition, Lightspeed, and Valor Equity Partners. The Texas-based company provides residential backup batteries, aiming to build a scalable platform for distributed home power. It’s a rare VC bet in a market dominated by small local installers. Read more here.

Tailscale – $160M Series C (Accel)

• The Toronto-based startup building VPN software with mesh networking technology has raised $160 million at a $1.5 billion valuation. The round was led by Accel, with participation from CRV, Insight Partners, Heavybit, and Uncork Capital. Read more here.

SandboxAQ –  $150M Series E Extension (New Investors: Google, Nvidia, BNP Paribas)

• The Palo Alto-based AI and quantum computing startup spun out of Alphabet, raised an additional $150 million in an extension of its Series E round. The new capital brings the total round size to $450 million and increases SandboxAQ’s valuation to $5.75 billion. Read more here.

(Lack of) Upcoming Public Offerings

Unsurprisingly, the headlines this week aren’t about exciting upcoming IPOs, but the growing list of blockbuster companies postponing them. Among those hitting pause: Klarna, StubHub, eToro, Chime, Medline, 1Komma5, Shawbrook Bank, and Stada.

See you in the next edition,
Sam Scott and the Founders Capital Team