The Spotlight by Founders Capital - Edition 7

Welcome back to Founders Capital Spotlight - your curated biweekly roundup of the sharpest ideas, analysis, and must-listen podcasts shaping venture and private markets.

Author

Sam Scott
May 28, 2025

What We’re Reading

This article addresses the elephant in the room: emerging fund managers are struggling to raise capital, with first-time VCs pulling in just $1.1bn so far this year - the worst pace in over a decade. Why? LPs are cautious, market volatility is high, and capital is flooding toward established players.

Luther Lowe, YC’s first full-time lobbyist and former Yelp exec, is on a mission to defend "Little Tech" (startups and smaller tech firms) against Big Tech's growing grip. His insider perspective makes a compelling case for policy reforms that keep markets open and talent accessible.

General Catalyst is tearing up the venture rulebook. Under CEO Hemant Taneja, the firm is buying hospital systems, entering wealth management, and stepping into lobbying. Their acquisition of Summa Health signals a bold pivot toward long-term societal impact over quick tech wins.

Must-Listen Podcasts

Louise Hill joined us for an unmissable episode, sharing stories and lessons that are as practical as they are inspiring. If you haven’t checked it out already, it’s arguably the best episode yet!

Jack Zhang shares how he scaled Airwallex to over $130B in annual payment volume and $720M in ARR, without ever missing 100%+ year-on-year growth. He breaks down the early chaos, turning down a $1.2B acquisition offer from Stripe, and the moment one of the world’s top VCs pulled a term sheet - and missed out on a billion-dollar upside.

Founders Capital Perspective

If you’re enjoying this newsletter and want to stay on the pulse, make sure to read our weekly private market trends newsletter - The Dealflow by Founders Capital. Last week we discussed OpenAI’s latest acquisition, and, as always, shared our insights and perspective.

Research & Resources

PitchBook’s Q1 2025 Global Private Market Fundraising Report paints a stark picture of the current VC landscape: just $18.7 billion was raised across 231 funds, setting 2025 on pace to be the worst year for VC fundraising in over a decade.

The slowdown stems from two key pressures:

  • Prolonged liquidity drought: LPs are now in their third year without meaningful distributions, limiting their ability (and appetite) to recycle capital into new funds.

  • Aging dry powder: Nearly 48% of VC dry powder is now between 2–5 years old, signalling growing pressure on managers to deploy, or explain, idle capital.

A lack of megafunds also dragged down totals. Only seven funds surpassed $500M this quarter, compared to 160 in 2021. Most of the capital was captured by established managers (49% of funds closed), showing LPs are sticking with safe bets in choppy waters.

Download the full report here.

What’s the real bottleneck in VC right now?

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Last week we asked you: Is venture capital becoming too reliant on AI?

The (overwhelmingly) most popular response was: “(A)Yes – it's creating a bubble and hiding broader weakness”

Beyond the Boardroom

Branson argues that great leadership starts with one thing: vulnerability. This piece explores how showing your flaws builds trust, drives innovation (with a nod to Brené Brown), and makes leaders genuinely magnetic. A sharp read on leading with openness, not ego.

Executive presence isn’t about charisma or bravado, it’s about alignment, self-awareness, and values. This fresh take breaks down how to cultivate real influence without performing a persona. If you’re looking to lead with quiet confidence and clarity, this one’s worth your time.

Like what you see? Think we missed anything? Let us know and we will check it out ahead of the next edition.

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