$425B in VC. You got none of it

VCs deployed $425 billion in 2025. Up 30% from the year before. The headlines wrote themselves. "Venture is back!" "The funding winter is over!"

And your startup didn't see a dollar of it.

I've spent the last decade watching capital cycles from both sides of the table. Built The Family, watched our companies raise over $1.5B in follow-on. I've seen bull markets, bear markets, and whatever we're supposed to call this one. And this one is different. Not because the money disappeared. Because the money concentrated.

AI took $211 billion. That's 50% of all venture funding in a single category. And within that category, five companies raised $84 billion alone. OpenAI, Anthropic, Scale AI, Project Prometheus, xAI. Five companies. 40% of all AI funding.

Let that sit for a second.

The deal count stayed flat. Round sizes exploded. Fewer companies raised. The ones that did raised bigger. If you were in the top 10%, you got record rounds. If you weren't, you got silence. The middle disappeared completely.

Here's the math that should keep founders up at night. In 2021, roughly 100 companies raised $5 million each. In 2025, 50 companies raised $15 million each. Same total capital deployed. Half the winners.

The thresholds moved too. Series A now means $2M ARR minimum, not a strong deck and a promising pilot. Series B means 100% net retention, not a growth story with good vibes. And if you're raising a growth round, investors want profitability. Not a "path to profitability." Actual profitability.

Investors stopped betting on potential. They only fund proof.

I don't say this to depress anyone. I say it because too many founders are sitting in a room pitching like it's 2021, wondering why the meetings go well but the term sheets never come. The meetings go well because investors are polite. The term sheets don't come because your metrics aren't top 10%.

Capital flows to category winners. That's always been true. But the gap between winners and everyone else used to be a crack. Now it's a canyon.

If you're building something real, the money is there. More than ever, actually. But "something real" now means undeniable traction, not a compelling narrative. The bar moved while most founders weren't looking.

So before you plan your next raise, ask yourself one question. Not "is VC back?" — that answer is yes. Ask "am I in the top 10% of companies at my stage?" If the answer isn't a clear yes, your fundraising strategy needs to change before your pitch deck does.