Best of LinkedIn: Venture Capital CW 31/ 32

Significant focus on AI for mental health, with models aiming to replace clinicians while emphasizing proprietary data, brand trust, and agility as competitive moats

Investors advise founders to prioritize capital efficiency, anticipate longer fundraising cycles, and maintain focus on fundamentals over hype

Corporate subsidies are influencing buy-versus-build decisions for AI solutions, shaping strategic roadmaps in multiple sectors

Founders increasingly avoid corporate VCs due to perceived misalignment, causing missed opportunities in high-quality deals

Deals are reframed as the starting point for strategic influence, with emphasis on building long-term relationships beyond the transaction

AI and deep tech are emerging as key target areas, marking a shift from opportunistic to strategic capital deployment

Preference is growing for cap tables without complex preferred share structures to ensure fairness and long-term commitment

Alignment on operational goals and strategic direction is becoming a prerequisite for deal closure

Founders are urged to balance valuation ambition with sustainable growth planning

Calls to base investment flows on genuine market behavior rather than hype cycles are gaining traction

Discussions highlight the need for bold yet calculated risk-taking to achieve portfolio outperformance

Regional ecosystems such as the UK and Midlands show strong growth, contrasting with challenges in other geographies

Reports highlight risks from governance traps and tax schemes within equity funding structures

Investors are placing greater emphasis on transparent, compliant deal frameworks to protect long-term value creation

New criteria for emerging managers focus on measurable outcomes and inclusivity, moving beyond traditional credentials

Industry dialogue increasingly links diversity with innovation capacity and portfolio resilience

VC–founder partnerships are positioned as trust-based, multi-year engagements rather than short-term capital injections

Cross-sector collaboration is accelerating innovation cycles and reshaping competitive positions in traditional industries

The collapse of overleveraged consumer brands raises the risk of contagion to retirement savings vehicles

Investor sentiment reflects caution toward excessive debt structures, even in high-return environments

Citymapper’s investor losses despite product adoption challenge assumptions around product–market fit translating to returns

Criticism mounts against the “one big win” investment philosophy, citing portfolio risk concentration