Friends, In last month’s newsletter, we discussed how escalating tariffs were impacting liquidity options for growth-stage startups and examined the sustained dominance of artificial intelligence within global venture investing. This month, we look at how nontraditional investors are shifting their focus toward late-stage companies, and how climate-tech startups are adjusting to a tougher fundraising environment by exploring new paths, including defense-related markets. According to PitchBook’s Q1 2025 US VC Valuations and Returns Report, corporate VCs and crossover funds are pulling back from early-stage deals and putting more capital into late-stage startups, especially those valued at US$1 billion or more. While these investors are doing fewer deals overall, they are making larger investments and contributing a growing share of total venture dollars this year. This reflects a more cautious approach, as many look for more mature companies that are staying private for longer. At the same time, climate tech is facing a steep drop in funding, with activity in the space hitting its lowest levels since 2019. As dedicated climate funds disappear and investor interest shifts elsewhere, some startups are adjusting their messaging, or even their business models, to better align with the defense sector, where spending has increased significantly. While the move could help unlock new sources of capital, it also comes with challenges, including navigating a different customer base and reworking how these companies present themselves to investors. As always, do not hesitate to contact us if we can help you think through the impact of the trade wars on your business, brainstorm a legal or business challenge you are facing, or connect you to a potential investor, professional, or entrepreneur. My best, Louis Lehot