Meanwhile, filed on June 1 at a $965 billion valuation, and followed on June 8, . After four years of a venture liquidity drought, the read across the industry is simple: the IPO window is finally open again.

I would be careful with that read.

Look at where the money is coming from. SpaceX’s raise alone is slated to be more than the .

that with brokerage cash balances low, retail investors may have to sell existing holdings to fund their SpaceX orders, with and Bitcoin the most likely sources, and SpaceX is reserving as much as 30% of the deal, roughly $22.5 billion, for that same risk-on crowd. Crypto’s own this year as capital rotated toward AI. These three companies could very well be the entire 2026 IPO class.

Put together, this points to a concentration event rather than a broad reopening. A small number of funds and pre-IPO sellers get liquidity, three tickers absorb the available capital and attention, and the rest of the queue waits. If you run an early-stage company, the window reopening for SpaceX does very little for you directly.

The acquisition outlook

What these listings do change is more durable, and it runs through M&A.

A public SpaceX, OpenAI and Anthropic become some of the best-capitalized acquirers on the planet, with liquid stock to spend. OpenAI has already closed roughly half a dozen acquisitions this year, nearly matching its full 2025 total, and AI dealmaking across the market in the first quarter. The vast majority of venture exits have always been acquisitions; these offerings deepen the pool of buyers far more than they shorten the IPO queue.

For founders, that reframes the goal. Don’t build for an IPO window that was only ever open to a handful of companies. Build to be the company a newly public AI giant needs to own: real ownership of a workflow, proprietary data that compounds, the testing and evaluation infrastructure these labs increasingly run on, or a wedge into a market one of these platforms wants to enter. At the seed stage, the exit math has always pointed toward a single meaningful acquisition, and this wave widens the set of acquirers who can write that check.

For investors, the discipline is to not mistake a concentration event for a market that has reopened. The liquidity —��and the distributions LPs have spent four years waiting on —��will land with a narrow set of names. Most portfolios still get liquid the way they always have, through M&A, and the health of that market matters more to the median fund than whether SpaceX trades up on day one.

The test comes this fall. If the retail bid holds and the next tier of the queue prices well, Friday really will be the start of a broad reopening. Watch those follow-on listings, and watch what three newly public companies do with their stock over the next year. That second part is what reaches the rest of the market.

As the co-founder and managing partner of , is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in 91��Ʒ News and other leading publications.

Related 91��Ʒ query:

Related reading:

• The SpaceX IPO Filing Looks Nothing Like Those Of The Elite Group Of Tech Giants It’s Hoping To Join
• SpaceX IPO At $1.5T Valuation Would Be 10x Larger Than Biggest VC-Backed Listing Of All Time

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AI’s share of venture funding climbed to 80% this quarter, up from 55% a year ago. The deployment is real. The liquidity question behind it is the one founders should be paying attention to.

In 2025, 91��Ʒ roughly 2,300 venture-backed acquisitions against just 65 IPOs. In aggregate, the LPs sitting behind every venture fund have been in since 2022. Record deployment in Q1 doesn’t change the math at the LP level, and that pressure is reshaping every term sheet, follow-on decision and board conversation in venture right now.

Know what’s actually driving the firm across the table

When a partner walks you through their thesis, they’re telling you a story about your market; rarely are they telling you a story about their fund. That second story determines whether they can write your bridge in 18 months, whether they’ll fight for pro rata in your Series B, and whether their behavior in the next downturn looks like patience or anxiety.

LPs are demanding cash back. Paper markups aren’t enough. Some firms are responding well, consolidating into their best companies and being deliberate about new commitments while others are pretending it’s still 2021. Founders should know which type they’re sitting across from before signing anything.

Ask the questions founders rarely ask

Three reference calls with portfolio CEOs used to be enough due diligence on a VC. Not anymore.

Ask what vintage the partner’s current fund is and how much dry powder is left. Ask how many of their 2018 through 2020 companies have produced realized returns rather than paper markups.

Ask whether their LPs have been pushing for GP-led secondaries. If the answer is yes, the firm is operating under a cash-flow constraint that will show up in your boardroom. These aren’t rude questions. They’re the same ones serious LPs are asking that partner this quarter, and high-quality firms welcome the conversation.

Build your buyer relationships now

If you’re raising in 2026, you’re statistically far more likely to get acquired than to ring the bell at the . Q1 2026 alone produced, the third-busiest quarter since 2022. Of the 21 venture-backed exits over $1 billion globally last quarter, only four happened in the U.S. The exit window for American founders is narrower than the headline funding numbers suggest.

Smart founders design for that reality from Series A. They know which platform companies have an active corporate development team. They build product surface area that maps cleanly into someone else’s stack. They cultivate executive relationships at the most likely acquirers years before any sale conversation, so when one starts naturally the introduction is already there.

Capital is plentiful. Discipline is what separates outcomes.

Every dollar concentrated into the four AI mega-rounds is a dollar that hasn’t returned anything to LPs yet. Founders who understand the LP-to-GP-to-startup chain end up with better partners, smarter terms and companies built for more than one path to a great outcome.

As the co-founder and managing partner of , is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in 91��Ʒ News and other leading publications.

Related reading:

• What The Record Venture Funding Quarter Actually Means For Your Startup’s Fundraise
• Q1 2026 Shatters Venture Funding Records As AI Boom Pushes Startup Investment To $300B

Look closer, and the story changes completely. Early-stage funding was up 41% year over year. AI/ML deal count , up from roughly 5,600 the year before. More companies are getting funded at the early stage, not fewer.�� The concentration at the top? That’s an infrastructure play. The application layer looks entirely different.

Build vertical, not horizontal

The real signal is in the shift from horizontal to vertical. shows horizontal SaaS down 35% over the past 12 months while vertical SaaS is essentially flat (up 3%). That divergence matters for founders deciding what to build.

Horizontal software (project management, general productivity, collaboration) is commoditizing fast as AI agents handle coordination natively. But vertical software? That’s where proprietary data shines and industry-specific compliance workflows matter. AI makes the first category less valuable and the second category more valuable.

If you’re starting a company right now, the data says: Pick an industry, not a feature. Claims processing in insurance, scheduling in healthcare, compliance in financial services, job costing in construction. These are workflows where software penetration has been shallow for decades because the problems were too specific for horizontal tools. AI changes that math.

Build for the $6T, not the $500B

The addressable market for software is expanding, not contracting. In Redpoint’s CIO survey, 58% cite AI as the top driver of increased software spend. As agents move from copilot features into autonomous workflow execution, the addressable market grows from roughly $0.5 trillion in current U.S. enterprise software spend toward $6 trillion or more, because AI starts capturing portions of the knowledge-worker payroll that software never could.

This is classic : When a resource gets dramatically cheaper to produce, consumption goes up. AI makes software dramatically cheaper to build, deploy and maintain. Suddenly, job costing for midsize contractors pencils out. Inventory optimization for independent pharmacies becomes economically viable. The cottage industries that enterprise software ignored for decades? They’re all in play now.

Build for acquirability, not just IPO optionality

But let’s talk about exits, because that’s where the rubber meets the road. The IPO market remains largely closed. In 2025, roughly 2,300 VC-backed startups were acquired compared to just 65 IPOs, per 91��Ʒ data.

LPs have seen nearly $200 billion in cumulative negative net cash flows since 2022. The pressure to return capital through M&A is real and growing.

Smart founders are building for this reality from day one. They’re building products that integrate into existing enterprise stacks, accumulating proprietary data that makes them expensive to replicate and cheap to integrate. Strategic acquirers in insurance, healthcare, logistics and financial services are actively buying vertical software companies. Why? Because these buyers can’t build this stuff internally — they lack the talent, the focus, and frankly, the DNA.

Start with the workflow, not the technology

So while everyone’s mesmerized by the infrastructure megarounds, the real opportunity is staring us in the face. Pick a specific industry workflow that’s still manual or stitched together with Excel. Build the AI-native solution that actually works for that vertical. Get to revenue before the market catches up.

The record quarter and the shrinking fund base are telling the same story from different angles. Infrastructure capital is concentrating at the top while the application layer is wide open for those willing to roll up their sleeves and solve real problems for real industries. That’s where I’m putting capital, and that’s where smart founders should focus their energy.

As the co-founder and managing partner of , is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in 91��Ʒ News and other leading publications.

Related reading:

• These 3 Charts Show How Venture Capital Has Concentrated At The Top In 2026
• Q1 2026 Shatters Venture Funding Records As AI Boom Pushes Startup Investment To $300B

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If I could go back in time, here are a few pieces of advice I would give to myself many, many years ago when I started my career in venture capital. ‍

Relationships are everything

It’s easy to get caught up in chasing fast-moving deals in the hottest trend or startup. Many investors do, and there’s no shame in it — except the performance metrics those deals tend to yield.

Venture capital is a long game, with cycles that span many years, even decades. Over even a long career, you may only see two or three of those cycles and the investments you make have maturation dates that usually span a decade.

The people matter more than the deals. This industry runs on trust, not transactions. My LPs trust me to deliver and that trust is transferred to the founders I invest in. The trust I establish with my LPs is the foundation for future investments and the way founders maintain my trust often provides them with funding for multiple ventures.

The best investors invest in founders —��not startups — and that dynamic transfers to LPs. People remember how you treat them when there’s nothing to gain and winners often come from unexpected places.

Earn your filter and maintain the hustler mindset

Take as many meetings as possible. Meet as many people as possible. Listen to ideas you think are crazy, pitched by people you think are nuts. Go deep — call customers, talk to parents, professors and anyone else that can provide even the smallest signal on the founder.

It’s OK to ask dumb questions. The best investors don’t win with spray and pray. Selectivity scales and drives long-term success. The faster you can develop a filter, the faster you’ll earn the ability to select winners.

That skill only comes from reps, so don’t waste time curating meetings based on perception, ego or prestige. If you do this well, your job will get glamorized and it will become increasingly difficult to maintain a beginners mindset, which is essential.

Early-stage investors win by caring more about their founders and the details of their business. Never hesitate to roll up your sleeves and dive deep into customers, unit economics, churn curves, competitors, fundraising decks and any other granular component necessary to make your founders succeed.

Build a brand before you need one

By the time you actually need to build a brand around yourself and your fund, you’re going to be leaving opportunities on the table.

Founders and LPs alike need to know who you are and what you stand for, and the earlier you can establish those channels and develop a narrative history the better — even if no one sees it for years.

You don’t have to be right, and you can change course at any time.�� Getting something out there is more important than being perfect. Teach the market, share what you’re learning and seeing, and transfer value without expectation of return. You’re playing the long game, remember?

One of those posts from four years ago might just be the reason the deal of a lifetime finds you. A brand is not a logo, it’s a reputation. Establish it early with no expectations and it’ll pay dividends when it’s needed most.

Final thoughts

Venture investing is not easy. There are volatile cycles, big decisions and an enormous amount of dedication required to successfully establish a 20- to 30-year career. The North Star to rely on is relationships built on trust. Relentless effort is a prerequisite, but ultimately the best investors have developed and nurtured relationships. Do that and the returns will come.

As the co-founder and managing partner of , is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in 91��Ʒ News and other leading publications.

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Equities, despite the volatility and uncertainty, have held up. Bitcoin recently posted a new all-time high and the development of the crypto space is booming. The battle-tested startup market is generating more revenue earlier than ever before while the AI boom continues to attract capital.

It is looking more and more likely that we are at the beginning of a bull cycle that investors and founders have been praying for. Markets are cyclical, and while challenging times test resilience, booming markets present a unique set of opportunities and risks for both venture capitalists and founders. Success in an upswing requires preparation, strategy and focus.

Here’s how to get ready for the next big wave.

For VCs: stay disciplined

In previous cycles, the beginning of the end has traditionally been marked by such extreme froth in the market that VCs chase deals outside of their focus, cut due diligence corners, and disregard fundamentals.

Don’t repeat those mistakes. Double down on sectors and models you deeply understand and believe in and ignore the pressure to chase trends. The FOMO will be real and the desire to get in on deals quickly to outcompete other investors will be strong.

Resist. Don’t compromise due diligence standards and don’t lower the bar for fundamentals. Capital efficiency, durable competitive advantages, clear paths to revenue and scalability still matter in a booming market and you’ll regret compromising your standards when this cycle ends. At peak-hype cycle, it’s easy to chase the hottest deals — oftentimes to the neglect of your existing portfolio and founders.

Stay focused on relationships, both with your existing founders and LPs. It’s easier to raise that next fund during a booming market, so instead of chasing overvalued deals the best VCs use these cycles to play the long game by doubling down on their winners and securing fresh investor commitments.

For founders: build the foundation for growth

For startup founders, boom cycles are often characterized by an endless, perpetual state of raising money. As capital becomes more accessible, the competition also increases so founders find themselves dedicating an enormous amount of their time to fundraising.

Knowing this is coming, founders should prepare by clarifying their vision, sharpening their pitch, fortifying their balance sheet, investing in talent and warming up existing strategic partnerships.

The more you can do to create efficiencies for yourself in the coming funding cycle by polishing pitch assets and preparing for due diligence cycles, the less time you’ll have to spend during crunch time and the faster you’ll be able to move in the highly competitive race for capital.

Internally, you can create some efficiencies for yourself by beginning long lead recruitment cycles, knowing that the capital to chase that growth is just a few months away. Those partnerships you’ve established? They are going to be tough to leverage during the chaos of the cycle, so make sure you establish plans and channels to capital on those relationships when it matters most.

Prepare, don’t chase

Both VCs and founders must remember that booming markets are as much about timing and preparation as they are about opportunity. For VCs, the goal is to deploy capital thoughtfully and avoid the pitfalls of hype-driven investing. For founders, the focus should be on scaling sustainably while seizing the advantages of favorable market conditions.

Booming markets don’t last forever, but companies and funds built on strong foundations can thrive long after the cycle turns. The best time to prepare is now — before the wave begins.

As the co-founder and managing partner of , is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in 91��Ʒ News and other leading publications.

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While it’s somewhat standard practice to get an idea off the ground with friends and family, then angel investors, things get more complex as startups approach their early stages and begin raising successive rounds. Having investors that provide tangible support beyond money — at just the right points along a startup’s trajectory — can be vital to scaling up past even its expectations. Here’s why.

The stages of building a startup

Building a startup is a multistage challenge. On Day One, it’s about hacking value and moving from zero to one. Founders must identify product/market fit and prove that the idea can be built.

This step is entirely on the founders’ shoulders, and they can typically fund this themselves via friends and family or angel investors. Once that’s done, they have to build what might be called an MVP — a minimum viable product — which takes more capital and operational complexity.

During this phase of hacking growth, there are other nuances: Product and sales operations need to be established, key employees need to be hired — and all needs to happen in tandem and at a high degree of quality if you want to become a business with scale. Once all of that has happened and is working correctly, founders are officially in the business of company-building, and are moving out of early-stage and into growth-stage venture capital funding.

The real value of early-stage VC perks

Early-stage VCs often pride themselves on being hands-on with their portfolio companies: Marketing, legal, accounting, hiring, operations, sales, mentorship and other services are offered by them in-house or through various networks.

During these first few stages, where budgets are tightest and growth needs to be most rapid, these offerings can make an enormous impact. Founders who know how best to leverage these resources will give themselves an advantage over their competitors — those who secure early-stage checks from investors that disappear after signing miss out on what engaged ones provide.

One of my favorite examples of the impact of early-stage support centers on creating scalable foundations early — sales, operations or staffing. The goal of an early-stage company is to achieve as much hyperbolic growth as possible with the proper infrastructure to support it at scale.

Many startups are fortunate enough to experience rapid growth, but get caught in a perpetual game of catch-up as they develop the systems to handle that growth on the fly. I’ve seen companies with fantastic products not grow because their infrastructure couldn’t meet demand. Having an early-stage venture partner with the right offerings could have prevented that struggle and made the most of that early momentum.

Blending early- and growth-stage investors

As startups progress from seed to Series A, it can make sense to bring on growth-stage investors alongside hands-on early-stage backers — especially if those early-stage investors have done what they need to do during the pre-seed/seed stages. At this point, bringing more of the “spray and pray” funds can be helpful, but founders should be wary of bringing them on too soon. Having a solid group of hands-on investors early on sets the stage for success when growth-stage conversations start happening.

Conclusion: Vet your investors

Founders should meticulously vet their investors at every stage. Getting VCs who can deliver value across the business from Day One is a must — it’s about much more than just money. Getting the right people in the right positions at the right times is how you ace each phase and reach your goals.

To sum up, the benefits presented by initial-stage venture capitalists and how those offerings fit into the startup’s strategy is massively important for early-stage founders. In addition to being necessary in maneuvering through startup growth challenges, support and resources given by hands-on, deeply involved investors is a massive shortcut to rapid, sustainable growth.

is the managing partner and co-founder of , and is focused on working with world-class tech entrepreneurs and establishing the MGV legacy. Before co-founding MGV, Schröder served as the head of global sales at the and was an investor at . Originally from the Netherlands, he grew up in South Africa and graduated with a law degree from Bertolt-Brecht University.

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Those days ended with a series of significant blows to the ecosystem including the Silicon Valley Bank collapse, global wars and rising interest rates.

Now the industry has settled into a new, healthy normal where valuations have returned to reasonable levels, only the highest-quality startups are able to attract significant capital, due diligence has come back into vogue as investors slowed down, and capital efficiency is again the name of the game for startups.

Glimmers of hope have emerged: Global markets have held, IPOs are thawing, crypto has rebounded and AI is booming — all signals of renewed investor interest.

As the doom and gloom continues to subside we are all wondering: What is the Goldilocks scenario that investors and founders are hoping for?

Investor sentiment

I spent the past few weeks learning what other venture investors think this outcome would require. I discussed this with and , managing partners at and , respectively, to understand if other fund managers share my optimism.

“The ecosystem needs liquidity. IPOs need to begin happening again, interest rates must come down, or public markets need to grow. Any one, or ideally, all of these things, need to start happening for the venture ecosystem to rebound,” McCrea told me. “Venture capital is all about the long game, so some patience will be required.”

The general consensus is that first and foremost, IPOs need to start happening again, and recent signals from and indicate they might.

The liquidity events brought by IPOs are the lifeblood of venture, and once venture investors across all stages start getting capital returned, they can return capital to LPs, create new funds and make new investments across the startup ecosystem.

As that foundational cycle continues to show more strength, the momentum of the ecosystem increases and another cycle begins.

“Fund managers are seeing some long awaited signs of life from the market, despite the myriad of headwinds. Startups are getting more efficient and profitable while a great deal of froth has been removed from the market. There’s a palpable sense of optimism emerging that the Goldilocks scenario might just occur,” Cohen told me. “Whether it materializes has yet to be seen, but ��’v�� seen more optimism emerge in the last month than I did in the last year.”

Reaching Goldilocks

Inevitably, the most crucial piece of this puzzle is the interest rate and macroeconomic climate. If global markets are able to avoid a recession and interest rates are able to be managed in a way that fosters continued growth under tighter monetary controls, then institutional capital will once again flow toward growth.

In a world where IPOs are consistently rolling and fund managers are showing strong performance, the venture and startup ecosystems will be in the Goldilocks scenario.

It’s a uniquely interesting time to invest; the scales seem evenly matched and maybe even slightly optimistic.

This is a prime time to invest, because we may be witnessing the beginning of a renewed bull market. The risks, however, remain persistent with global turmoil continuing to spread.

The conflict in Ukraine remains protracted and new conflict has arisen in Israel. Interest rates are flattening, but remain elevated relative to the previous cycle.

But global markets have remained resilient and a definitive turnaround there —��combined with a few more successful IPOs —��could provide directional confidence for investors over the coming months.

is the managing partner and co-founder of , and is focused on working with world-class tech entrepreneurs and establishing the MGV legacy. Before co-founding MGV, Schröder served as the head of global sales at the and was an investor at . Originally from the Netherlands, he grew up in South Africa and graduated with a law degree from Bertolt-Brecht University.

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Despite small glimmers of hope, the market turnaround has not yet materialized, putting startup founders in a challenging position as they decide how to optimize resources.

The vast majority of the founders I talk to are focusing on slashing costs to extend their runways — they’re in survival mode. While this is certainly the default option, there are drawbacks to it, and I’m not seeing enough founders pushing to consider the viable alternatives.

Survival mode

In times of uncertainty, it’s a natural response to want to play things conservatively. Slowing expenditures and even cutting staff to add six, 12 or 18 months of runway may seem like the way to accomplish that aim.

Trouble is, at that point you’re trying to time the market so it turns out that what you’re actually doing is something of a gamble. Maybe you’ll be able to wait things out and still have enough left in the bank to come roaring back to life when markets turn around, making a fresh fundraise more feasible.

But maybe you’ll just wind up fizzling out.

Here’s the thing: Not only does your bet on the timing of the market rebound need to pan out, you’ll also need to have enough resources left to ramp back up into growth mode, develop some traction, and then hopefully be able to impress enough VCs to raise that next round. So long as you’re taking risks like this, you should also consider a bolder play: growth.

Growth mode

Sometimes it pays to be contrarian. While nine out of 10 startups go into hibernation, there can be big opportunities to conquer your market vertical. Look at your competitors. Are they actively marketing? Are they winning new customers? If not, this could be your chance.

Rev up your sales and marketing engines, ship new products, bring in some new customers and boost your ARR. Yes, there are costs involved, but pull this off, and your company will be far more attractive to VCs.

Right now there are far too few startups still growing, and if there’s anything that VCs like it’s growth — even better if it’s 2x to 3x ARR growth, and you’re taking strides to corner the market you’re in.

Bootstrapping mode

The final route that’s an option for some startups is to dial back on the costs of hyper-growth and focus on developing an efficient, profitable business.

I’m always looking for startups with business models that actually work. At the early stage so many companies are trying out ideas that may never have a path to profitability.

Granted, if you’re still small and profitability doesn’t mean eye-popping growth, you should temper your expectations of raising a fresh round of funding.

On the other hand, if you’re trying to play things conservatively, bootstrapping can be an even less risky path than going all the way into survival mode. When you’re profitable, you don’t need to live off of your runway.

The question really is: Will you be able to remain competitive when the rebound spins out freshly funded, hyper-growth-chasing competitors?

Each of these paths has its share of risks and upsides. Which one is right for your startup is contingent on a number of factors: How much cash you have in reserves, what your competitors are doing, what your path to profitability looks like, and much more.

The bottom line is that founders do have options beyond cutting costs and extending their runways, and they’d be wise to consider them.

is the managing partner and co-founder of , and is focused on working with world-class tech entrepreneurs and establishing the MGV legacy. Before co-founding MGV, Schröder served as the head of global sales at the and was an investor at . Originally from the Netherlands, he grew up in South Africa and graduated with a law degree from Bertolt-Brecht University.

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��’v�� said it before and I’ll say it again: Over the course of their careers, LPs have maybe two to three windows to buy at the bottom. Our current market is one of them.

We’ve all seen stories about how LPs are shying away from venture in the wake of macroeconomic trends, war, interest rates — the list goes on. The saying, “Those who fail to learn from history are doomed to repeat it” rings especially true in our current climate, and the window for LPs to nail one of those two or three career bottoms is beginning to close.

This opportunity does not come without risk, which is why those who capitalize on these moments are celebrated in history and why most miss it. It takes enormous courage and conviction to deploy capital in the face of headwinds like we’ve seen over the past year. But for those who invest on 10- and even 20-year time horizons, the question really boils down to: “Do you think technology will continue to be the most profitable and disruptive sector over our lifetimes?” If your answer to this is yes, now is a uniquely rare time to invest in the fund managers you think are capable of identifying the companies driving this trend.

As history has shown, it’s easy to invest when the market is booming and IPOs are flowing out like champagne in a nightclub. Ironically, many investors get crushed investing at the top when things seem most easy and obvious. Investing is all about timing, and those who have seen this cycle repeat tend to also be the most keen to lean into the risk presented by our current economic climate. Don’t get me wrong, it still remains to be seen when the official turnaround will come — but by the time that clarity is recognized, the opportunity will have passed.

LPs and investors of every variety are in a game of chicken with that slowly closing window. If history is any indicator, that turnaround will eventually arrive and the primary function driving capital deployment decisions is all about how close you want to cut it. History has also shown us that the window closes quickly and leaves many trapped — forced to decide between waiting for the next cycle or being forced to buy late and at prices they well know to be elevated. This is no easy task, especially when you’re beholden to boards and decision-makers that expect perfection.

My message to LPs is this: How close are you willing to cut it? If you’re really investing on decade time horizons, then it seems like you’d rather get through the window now and potentially weather a year or two (or less) of patience. The alternative is being late to the party and chalking up below-average returns as an investment in the wisdom to not make the same mistake a decade from now when history inevitably repeats.

Related reading:

• VCs Who Wait Too Long For A Market Rebound Risk Losing Out On The Best Deals

is the managing partner and co-founder of , and is focused on working with world-class tech entrepreneurs and establishing the MGV legacy. Before co-founding MGV, Schröder served as the head of global sales at the Maschmeyer Group and was an investor at . Originally from the Netherlands, he grew up in South Africa and graduated with a law degree from Bertolt-Brecht University.

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The ongoing downward trend in venture funding has many founders desperately trying to secure their next round.

Runways are running out, and many great startups with strong businesses and future prospects are willing to take a hit on valuations, and even take a downround, in order to continue operating.

Venture funds, however, are waiting for the directional resolution needed to not only feel confident in the market rebound but also to provide their limited partners with a sense that deploying fresh capital into venture is the right move.

Currently, everyone seems to be in a holding pattern waiting for this resolution.

Don’t wait too long

If history has taught us anything, it’s that oftentimes this resolution emerges after many of the best opportunities have been taken.

I believe that over the next six to 24 months, many of the venture deals that will go down in history as legendary will be made. As investors, it pays to be early — and that means deploying capital right before the market has directional consensus.

The difficulty for investors will be managing the risk of making investment decisions just as —��or ideally just before — positive directional consensus is reached. Once that moment happens, investors will begin piling back into the market, driving prices, valuations and competition for deal flow back up.

The sweet spot to make once (maybe twice) in a lifetime investments is coming up on the horizon, but with runways for many startups reaching their ends, the decision-making process for investors will become increasingly scary.

Many factors could contribute to this rebound —��or derail its possibility completely. The Ukraine war ending peacefully or the monetary policy soft-landing being confirmed could turn the tide of the markets overnight.

However, the opposite could very well happen and we could be in for a deeper, more protracted downturn than anyone anticipated.

Investors are obviously tracking these dynamics closely and monitoring the herd for directional agreement, but for the time being, many investors are stuck on the fence.

Until venture funds and their LPs start deploying capital again, the clock will continue to count down and many otherwise good startups will reach the end of their runways and close up shop.

A great many startups will reach that point over the next six months, so investors are running out of time to reach that directional consensus. If the macroeconomic landscape doesn’t provide some sense of clarity within that timespan, then VCs and their LPs will be between a rock and a hard place — either deploy capital to keep some portion of their portfolio alive, or accept a significant (potentially fund-crippling) number of failures.

is the managing partner and co-founder of , and is focused on working with world-class tech entrepreneurs and establishing the MGV legacy. Before co-founding MGV, Schröder served as the head of global sales at the and was an investor at . Originally from the Netherlands, he grew up in South Africa and graduated with a law degree from Bertolt-Brecht University.

Related Reading:

• Bootstrap, Sell Or Recapitalize? A Tech Entrepreneurs’ Guide To Surviving A Capital Crunch In A Downturn
• ​​What Does ‘Dry Powder’ Actually Mean For Startups?
• How Founders Should Manage Burn Rates During A Recession

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