Long Tail Death
I read this today in Moonfire Venturesβ latest newsletter:
βSince 2022, the number of active institutional seed funds in Europe has fallen by 48%, while the number of founders entering the market has risen by 60%. Upstream LP liquidity has tightened, with 2025 marking the lowest year of VC fundraising in over a decade. Of the 1,100 European funds that raised in 2021-2022 and would typically be returning to market this year, only 80 raised in 2025.β
Thatβs pretty daunting. It suggests just 8% of funds could fundraise when they wanted to. Nobody is going to weep for a VC class that many view as overpaid gamblers and ivory tower commentators heckling from the cheap seats. But the death (or at least debilitation) of 92% of the market surely has to lead to less diversity of opinion, less contrarianism, less hope for the non-obvious entrepreneur.
The shakeout is going to be epic and I am sure we will lose good funds and investors alongside bad. Fingers crossed Iβm in the 8%β¦