In last month’s newsletter, we discussed how investor expectations for initial public offerings (IPOs), mergers and acquisitions (M&A), and fundraising were shifting amid heightened volatility, geopolitical tension, and a surprise tax overhaul, signaling a new paradigm for venture capital (VC) in 2025.

This month, we explore early signs of recovery in the innovation economy, as recent policy shifts and strategic market activity begin to restore momentum across the venture landscape.

The passage of the July 4 tax package has introduced meaningful incentives for long-term investment, particularly through enhancements to the Qualified Small Business Stock (QSBS) exemption. As outlined in Charting the Path Back to the Good Life: Unblocking the Innovation Markets in 2025, the legislation is expected to encourage renewed risk-taking among founders, employees, and early-stage investors.