Friends,

In last month’s newsletter, we discussed the potential impact of newly announced U.S. tariffs on the venture capital (VC) landscape and explored how rising costs and new tariffs could pressure startups, particularly those in the technology sector, and slow demand later in 2025.

This month, we continue to focus on the growing impact of market uncertainty caused by new tariffs on the venture capital ecosystem and the continued rise of venture capital investment into artificial intelligence (AI) startups.

The global trade tensions, fueled by new tariffs, are increasingly affecting liquidity options for growth-stage startups. As equity financing becomes more expensive and IPO timelines extend, more companies are turning to venture debt as an alternative. According to recent reporting, the venture debt market is experiencing unprecedented activity, with lenders noting a sharp uptick in demand as startups seek ways to preserve their valuations and navigate the uncertain capital markets.