#257: Liquidity on Lock, AI Leading — What Q2 2025 Really Tells Us

Insights from the PitchBook-NVCA Venture Monitor

The Q2 2025 PitchBook-NVCA Venture Monitor, released July 14, offers a sharp look at a venture market in stasis—unless you’re building with GPUs and LLMs.

From dented IPOs to bifurcated funding rounds, the report (published with J.P. Morgan, Dentons, Deloitte, and NetSuite) cuts through the noise. Here’s what matters for GPs, LPs, and founders navigating this moment.

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🚪 Liquidity: Still Closed, But Not Quiet

“Down round IPOs are the new normal.”

While Q2 notched $67.6B in exit value—the highest since late 2021—that figure is misleading. Most of it came from M&A, not IPOs.

Every major Q2 public listing priced 17–64% below its last private valuation. That’s left a mark. Limited partners are staying cautious, and venture fundraise cycles have stretched to 15.3 months—up 22% YoY.

“Fundraising is waiting on a return of large exits.”

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🧠 Dealmaking: AI Takes the Wheel

VC isn’t dead—it’s just narrower.

64% of all U.S. venture deal value this year has gone to AI companies, even though they represent just 36% of deals. The market is bifurcated, and the bar is high.

The median round sizes across stages tell the story:

• Pre-seed: $0.9M (↑42.3% YoY)

• Seed: $3.6M (↑16.1%)

• Series C: $61.2M (↑40.5%)

• Series D+: $100M flat

Dealmaking velocity has slowed, but when checks do land, they’re larger and more concentrated. CoreWeave and Scale AI alone soaked up billions this quarter. As one LP put it: “There’s plenty of dry powder. Just not for everyone.”

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🪙 Fundraising: A Game of Endurance

The median time to close a venture fund hit 15.3 months—a reflection of LPs scrutinizing DPI, not just TVPI.

With distributions still muted and public markets volatile, LPs are triaging. Secondaries offer some relief, but not enough to drive a broad unlock.

“Investors are being highly selective in their allocations.”

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🔍 The Playbook Right Now

• If you’re an AI company (or can plausibly reframe yourself as one): now’s the time to extend runway and raise big.

• If you’re not top-tier in metrics or brand: prep for longer raise cycles, smaller checks, and higher bar diligence.

• For GPs: keep close tabs on your 2021-22 vintage companies. Downrounds and muted exits are going to start testing IRR curves—fast.

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🧭 Final Take

This is a market of concentration and conviction.

AI is the growth story VCs want to believe in. But liquidity is still on ice. Until IPOs reprice upward or secondaries scale meaningfully, expect a barbell dynamic: the best raise faster and bigger; everyone else waits.

“Dealmaking continues its focus on AI... Fundraising waits on the return of large exits.”

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Key Takeaways

• AI dominates VC: 61% of CVC deals in Q1 2025 involved AI—marking a structural shift, not just a hype cycle.

• Liquidity remains constrained: Exit volume peaked, but only thanks to one IPO. Broader liquidity is still locked.

• Down round IPOs set the tone: Expect public listings at compressed valuations as the new baseline.

• Fundraising is quiet: LPs are watching for realized returns before re-committing.

• CVC recalibration underway: Fewer deals, more cost-conscious strategies, and a preference for VC exposure over M&A.

• Secondaries matter more: Especially for corporate investors and GPs looking to unlock partial liquidity in a tough exit environment.

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🛠 Tools to Navigate Small Fund Strategy

If you’re an LP evaluating smaller GPs—or a fund manager sharpening your pitch—our premium toolkit is built to help you raise smarter, underwrite with clarity, and model real outcomes.

These are the same internal resources we use when advising funds and assessing performance: