The lack of growth capital in Europe is such a persisting issue that some early-stage firms have taken the matter into their own hands. London-headquartered firm Notion Capital is one of them.

In 2017, Notion Capital was one of the first in Europe to close an opportunities fund to provide its portfolio companies with follow-on capital. Now, it has closed a $130 million growth fund, nearly twice the size of its previous one, that will also invest outside of its portfolio, TechCrunch learned exclusively.

U.S. VCs that used to fill the growth capital gap currently tend to focus more on their own market, said managing partner Stephen Chandler, noting that “opens up an opportunity for European firms like ourselves to make up some of that difference and be real European champions.” 

Some of the European companies Notion intends to “champion” from its new Growth Opps III fund are tied to the growing demand for more sovereignty, including those specializing in defense and supply chain logistics. But like many, the VC firm is also drawn to AI, which Chandler sees as a super cycle causing “a profound shift in the way that software is delivered and consumed.”

Notion Capital won’t invest in the infrastructure layer such as large language models. Instead, the firm sees opportunities in the application layer that will “massively increase” the size of its market, Chandler said. While Notion’s flagship fund has historically been known for its strong penchant for SaaS, cloud, and fintech, these will now be AI-infused, and joined by new verticals.

The firm expects to make a dozen investments and has already started deploying its capital from the funds. Deals, to date, include Upvest, a stock trading API out of its early-stage portfolio, as well as external companies Octopus Energy spinoff Kraken, and Nelly, a startup that builds software and financial products for the medical sector, according to Notion Capital.

To give itself some “robust objectivity,” in Chandler’s words, follow-on deals will be conducted by dedicated growth fund partners who will also “go out and source growth stage opportunities outside of the portfolio.”

One of them is existing Notion Capital partner Stephanie Opdam (on the left of the picture). She will now drive this growth strategy alongside Jessica “Jess” Bartos, formerly a principal at Salesforce Ventures. A U.S. national, Bartos is also Notion Capital’s first external partner hire (previous partners were promoted internally.)

“Because this was a new strategy, we felt we could benefit from external expertise at that growth stage,” Chandler said.

Subsequent growth funds may also be easier to raise. While Europe has suffered from a lack of pension funds investing in venture capital firms, incentives have started to change in several countries, including France with the Tibi initiative and the U.K. with the Mansion House Accord.

Despite its British roots, Notion Capital isn’t solely dependent on the U.K.’s regulatory framework; this latest Growth Opps III fund is denominated in euros and Luxembourg-based. 

To raise this new vehicle, which brings its assets under management to over $1 billion, the firm relied on its existing relationships with limited partners from across continental Europe, the U.K., MENA and the U.S.

“Something like 85% of our money comes from institutions; and within that, we’re very well geographically dispersed,” Chandler said.

But while recent initiatives to mobilize long-term institutional capital  “[weren’t] really a feature in this fund,” he added, “the signs are extremely positive, and that’s great [for] addressing that fundamental problem we started with, in terms of some of the gaps in growth capital we have in Europe.”

“If this finally works out and more LPs participate in growth stage investing, this could translate into more competition for Notion Capital. At least at the growth stage, where it is less established than at the early stage. However, Chandler sees both as a continuum.

“Our real competitive advantage in this growth strategy is leveraging the reach that we have in our early stage strategy,” Chandler said. “Most growth funds don’t have that. They’re out there trying to do all of their sourcing at the growth stage once they put their head above the parapet in terms of scale and momentum.”

In contrast, he said, Notion Capital has many touch points with founders over the years, including through its very active platform team, and is flexible in terms of its check size.

Despite its expanded scope, Growth Opps III’s main asset arguably remains Notion Capital’s portfolio. The firm has invested in more than 150 startups since its inception, including Currencycloud, GoCardless, Mews, Paddle, and Quantum Systems. While some are pre-AI or have been exited, the remaining companies likely include future champions — a track record that should make external companies more willing to take their growth checks, even if growth capital becomes less scarce in Europe.

The MBA-to-VC pipeline remains a very real thing. But that path is a little shakier than it once was, according to PitchBook reporting and new academic research.

Harvard placed 50 of its 1,004 MBA graduates into VC roles in 2024, with a median starting salary of $177,500. Stanford placed around 30 from its smaller class. More than 10,000 Harvard, Stanford, and Wharton MBA alumni currently hold senior positions at U.S. VC firms, PitchBook data shows.

The MBA’s grip on venture capital is loosening, however, according to Stanford professor Ilya Strebulaev, who found that 44% of mid-career venture professionals held MBAs in the early 2000s, compared to 32% today.

What’s driving the change? VC has evolved beyond traditional sectors into AI and hardware, where technical experience beats business school credentials, so firms are increasingly scanning talent from companies like OpenAI and SpaceX rather than elite MBA programs. “There is less appetite for MBAs currently,” executive recruiter Will Champagne tells PitchBook.

Students haven’t gotten the memo yet; Stanford’s VC club still boasts 600 members out of the roughly 850 MBA students on campus. They’re paying a steep price, too. Nabbing an MBA at a top program can cost more than $200,000.

If you’re thinking about investing in venture capital or any private fund, you need to understand these five key terms: MOIC, TVPI, DPI, Loss Ratio, and IRR. Without them, it’s like walking into a poker game without knowing the rules. And in this game, the stakes—and potential payouts—are massive.

I’ve been investing in venture capital since 2003, typically allocating about 10% of my investable capital to the space in search of multi-bagger winners. Since I don’t have much of an edge or the time as an angel investor, I’m happy to outsource the work to general partners (GPs) who supposedly do have the edge, for a fee.

My hope is that I’ll pick the right GPs who will spend their careers hunting for winners on behalf of me and other limited partners. If they succeed, everybody wins.

So far, I’ve had decent success. Several funds have returned over 20% annually for 10 years, while others have only produced high single-digit returns. Thankfully, I haven’t invested in a single fund that’s lost me money yet. The same couldn’t be said if I were investing directly in individual deals, so be careful.

Deciding Whether To Invest In A New Venture Capital Vintage

Right now, I’m debating whether to commit $200,000 to a new closed-end VC fund that focuses on seed and Series A companies. I already committed $200,000 to its prior vintage several years ago, but so far the results have been limited. There’s almost always a loss for the first few years until the potential profits come. This is called the “J-curve.“

At this early stage, investing is a lot like betting on a promising high school player eventually making it to the NBA. Roughly 80% of these companies will go bust. About 10% will become “zombie companies” or only mildly profitable—like players who end up playing overseas. That leaves the final 10% to deliver outsized returns—ideally 30×—to drive the vintage toward a 25% IRR over five years.

Let’s break down the five key metrics using my hypothetical $200,000 investment so you can see exactly how they work.

MOIC — Multiple on Invested Capital

MOIC is everything your investment is worth (both the cash you’ve gotten back and the companies you’re still holding) divided by what you put in.

Example: I invest $200,000. Over time, I get $50,000 in cash distributions and my remaining holdings are valued at $250,000. That’s $300,000 total ÷ $200,000 invested = 1.5× MOIC. Not bad, but not life-changing money.

MOIC says nothing about how long it took to achieve it. That’s why LPs also look at IRR (internal rate of return). A 3X in 10 years is a 11.6% IRR, but a 3X in 5 years is a 25% IRR. A huge difference.

IRR — Internal Rate of Return

IRR is the annualized return you’ve earned on your investment, taking into account both the timing and the size of cash flows in and out. It’s not just about how much you made, but when you made it.

• A 2× MOIC achieved in three years could mean a 26% IRR.
• That same 2× MOIC over ten years is only about a 7% IRR.

For funds, IRR is often the number they brag about because it captures both magnitude and speed of returns — but be careful. IRR can be gamed early on by quick partial returns that make the number look flashy, even if the fund’s later exits are mediocre.

TVPI — Total Value to Paid-In

For most purposes, this is basically the same as MOIC. It’s just the VC way of sounding fancier. Formula: (Residual Value + Distributions) ÷ Paid-In Capital. So same math, same result — 1.5× in our example.

DPI — Distributions to Paid-In

DPI is the “cash-on-cash” number. How much have you actually gotten back in real, spendable money? In our case: $50,000 ÷ $200,000 = 0.25× DPI. Paper gains don’t pay the bills, and DPI is your reality check.

Loss Ratio

This one’s a gut punch: the percentage of your invested capital that’s gone to zero. If $40,000 of my $200,000 is in failed startups, that’s a 20% loss ratio.

Pulling All The Venture Capital Investment Definitions Together

Seven years in, our $200,000 might look like this:

• Distributions: $50,000
• Unrealized value: $250,000
• Losses: $40,000
• MOIC/TVPI = 1.5× ($300,000 / $200,000)
• DPI = 0.25× ($50,000 / $200,000)
• Loss Ratio = 20% ($40,000 / $200,000)

Best-Case Scenario (5× MOIC)

Top tier venture capital firms return a 5X MOIC over a 10-year period. Let’s take a look at what that could look like.

• $500,000 in distributions + $500,000 in unrealized value for a total of $1,000,000
• DPI = 2.5× ($500,000 / $200,000)
• Loss Ratio = 10% ($10,000 / $200,000)
• IRR = 26.23% over 10 years

A 26.23% internal rate of return (IRR)—the annualized rate at which an investment grows over time—over 10 years is phenomenal, about 16% higher than the S&P 500’s average annual return. Just as good is that the venture capital limited partner stayed invested for the full decade, partly because they had to. With public equities, it’s far easier to panic sell or lock in profits early, which can derail long-term compounding.

Realistic Worst-Case Scenario (0.7× MOIC)

Bottom tier venture capital firms return a 1X MOIC or less. Here’s what a 0.7X MOIC could look like on a $200,000 investment.

• $50,000 in distributions + $90,000 in unrealized value ($140,000 / $200,000)
• DPI = 0.25× ($50,000 / $200,000)
• Loss Ratio = 40% ($80,000 / $200,000)
• IRR = –4.24% over 10 years

So even though the bad fund “only” loses ~30% of its value on paper, the time factor drags the annualized return deep into negative territory. If the S&P 500 returned 10% a year over the same 10-year period, you’d have $519,000 versus just $140,000. That’s a massive gap, which is why choosing the right venture capital funds is critical.

Betting on a brand-new VC is risky due to the lack of a track record. To offset this, the general partner needs to either lower their fees and carry, or seed the portfolio with some early winners to reduce the J-curve period of losses and improve the odds of achieving a strong MOIC and IRR.

Venture Capital Is A Hit-Driven Business

The reality is most investments fail, a few go sideways, and one or two home runs make the fund. A high MOIC with a low DPI means you’re looking at “paper riches.” A high loss ratio tells you the manager is swinging for the fences, but missing often. Make sure the ratios align with what you want.

Before writing a check, always:

1. Check the track record — across multiple funds and vintages (years), not just the shiny last one.
2. Ask about the loss ratio — you’ll quickly see if they’re disciplined or gamblers.
3. Find out the time to liquidity — because a 5× MOIC in year 15 is a lot less exciting than it sounds.
4. Be honest about your own risk tolerance — could you watch 90% of your portfolio companies fail without losing sleep?

Knowing MOIC, TVPI, DPI, Loss Ratio, and IRR won’t magically make you pick the next Sequoia Capital. But it will stop you from investing blind. And in venture capital, avoiding big mistakes is important. You don’t want to lock up your capital for 10-plus years only to significantly underperform. The opportunity cost may be too great to bear.

Alternative Choice: Open-Ended Venture Capital Funds

If you want exposure to venture capital without some of the drawbacks, open-ended VC funds are worth a hard look. These vehicles don’t just offer liquidity, they also let you see the portfolio before you invest. That’s kind of like sitting down at a Texas Hold’em table already knowing your opponents’ cards and seeing the flop before it’s revealed.

With that kind of visibility, you can decide whether the companies are thriving or floundering and place your bets with a genuine edge. Sure, the turn and river can still bring surprises, but at least investing isn’t a total leap of faith like the way you are with traditional closed-end funds. Over time, that knowledge advantage may add up.

Your Age Matters When You Invest In Venture

The older I get, the more risk there is in locking up money for a decade with less visibility and liquidity. With closed-end VC funds, you usually don’t know how things are going until year three, at the earliest.

10 years is a long time to wait for returns and capital back. At 48, I can’t guarantee I’ll even be alive at 58 to enjoy the gains. If an emergency arises in the meantime, I also want the option of tapping some liquidity, which traditional funds simply don’t allow. That’s why you should only invest in traditional closed-end funds with money you’re 100% sure you won’t need for a decade.

Then there’s the 20%–35% carry fee. I get it. General partners earn their keep by finding high-return companies. But if there’s an alternative way to invest in private companies without coughing up that hefty slice of profits, why wouldn’t I take it? This is where platforms like Fundrise Venture shine. It charges a 0% carry fee and only has a $10 minimum to invest while offering liquidity.

Personally, I’m diversified across early-, mid-, and late-stage VC, but my sweet spot is Series A, B, and C. These companies usually have real traction, recurring revenue, and product-market fit. Instead of praying for a 100X moonshot from a seed-stage gamble, I’ll happily take “consistent” 10–20X winners. At this stage in my life, I don’t need to chase too many lottery tickets any more, just some for the thrill of it.

Flexibility And Visibility Are Attractive Attributes To Investing

Open-ended VC funds give you something rare in private investing: flexibility and clarity. They reduce lock-up risk, eliminate hefty carry fees in some cases, and give you visibility into what you’re actually buying. You may also be able to skip the J-curve with an open-ended VC fund.

For younger investors with decades to wait, traditional closed-end funds makes more sense. The capital calls over a three-to-five-year period are great for consistent investing. But for those of us who or older and value optionality, open-ended funds feel like the more pragmatic choice.

So there you have it. Now you know the main venture capital investment terms and options to help you better allocate your capital. Remember to stay disciplined as you build more wealth for financial freedom.

Readers, are you a venture capital investor? If so, what percentage of your investable capital do you allocate to the asset class? With growth companies staying private for longer, why don’t more investors put more capital into private markets to capture that upside?

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On the latest episode of the Financial Samurai podcast, I sat down with Ben Miller, cofounder and CEO of Fundrise, for a deep dive into artificial intelligence, venture capital, and what it really takes to get into the best private company deals.

Ben was in San Francisco this summer visiting various portfolio companies and trying to make new investments. We also caught up over lunch in Cole Valley.

As someone with over $350,000 invested in Fundrise Venture, I’m thrilled to speak with Ben about what he’s seeing in the AI and private company space. Since Fundrise has long been a sponsor of Financial Samurai, I’m fortunate to get regular one-on-one time with him. When you invest a significant amount of capital, it’s always wise to conduct due diligence directly with the person in charge.

I strongly believe AI is the next major long-term investment growth trend. Since I won’t be joining a fast-growing AI startup, I want as much exposure to the space as I can comfortably take on. My private AI investments span from Series Seed to late stage (Series E and beyond), and I also own individual positions in all of the Magnificent 7 companies.

As always, do your own due diligence and allocate assets appropriately due to the risk involved. Investing in private companies is often riskier than investing in older, publicly traded companies. I currently have about 15% of my overall investments in venture capital and venture debt, with a target range of 10%–20%.

Here’s a brief recap of our discussion, but the full episode has all the nuance you won’t want to miss.

The State of AI: Multiple Winners Accelerating

We started with AI’s growth trajectory. The biggest players—like Anthropic—aren’t just expanding, they’re accelerating their revenue growth.

I floated the idea that AI might eventually become commoditized. Ben disagreed, arguing that the leaders are continuing to differentiate, pulling further ahead with better products, stronger talent, and deeper moats.

It seems like with all the tremendous AI CAPEX spend, the market is big enough for multiple winners.

Venture Fund Concentration and the Power of Big Bets

We discussed how much concentration is both healthy and required in a venture fund. Regulations state that 50% of the fund must be spread across at least two companies, and the other 50% must be invested in at least 10 companies for a total of 12 companies minimum.

Currently, about half of the Fundrise Innovation Fund is invested in just three companies: OpenAI, Anthropic, and Databricks. This kind of focus is higher risk, but when you pick the right horses in a transformative sector like AI, the rewards can be enormous.

As the great hedge fund investor Stanley Drukenmiller said, “If you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Lagoon, they tend to take very, very, concentrated bets. They see something, they see it, and they bet the ranch on it. The mistake I’d say 98% of money managers and individuals make is they feel like they got to be playing in a bunch of stuff. And if you really see it, put all your eggs in one basket and then watch the basket very carefully.”

We talked about the planned evolution of the Innovation Fund’s holding composition going forward, the holding periods of these companies, and strategies for finding the next winners. The Innovation Fund also owns Canva, Vanta, dbt Labs, Ramp, Anyscale, Inspectify, and more.

Rethinking Valuation: Growth-Adjusted Metrics

Valuation came next. Ben introduced the Growth-Adjusted Revenue Multiple as a better lens for assessing fast-growing companies—similar to the price/earnings-to-growth (PEG) ratio for public stocks.

If we’re truly still in the early innings of AI, it makes more sense to value companies based on both their revenue growth and scale, rather than traditional multiples alone.

It seems like investors may be underestimating how fast AI is actually growing, based on a discussion Ben had with an investment banker at Goldman Sacs who suggested modeling a 30% growth rate instead.

We also touched on the Baumol Effect—how rising labor costs in low-productivity sectors can accelerate technology adoption. In other words, when wages rise faster than productivity, businesses have more incentive to adopt AI to close that gap.

Competing for the Best Private Growth Deals

From there, we moved to one of the toughest challenges in investing: access. In my view, trying to secure a meaningful IPO allocation in a hot deal is an exercise in futility. I’d much rather invest in promising companies before they go public.

Using the Figma IPO as an example, Ben illustrated just how difficult it is to get a substantial allocation—even for well-connected investors. Figma was a name Fundrise didn’t invest in, despite being a customer.

The Innovation Fund’s ability to invest in the top six of CNBC’s top 50 Disruptor companies is no accident. It’s the result of deliberately reverse-engineering the process to identify winners early, then finding a way in.

Fundrise’s Significant Value Proposition To Private Companies

One unique competitive advantage Fundrise has is its ability to mobilize over a million of its users to spread awareness about a portfolio company’s product. Beyond visibility, Fundrise can actively drive growth—such as promoting Ramp, a corporate card company recently valued at $22 billion. This creates a powerful loop of adoption, growth, and valuation gains that goes far beyond simply writing a check or making introductions.

Of course, having top venture capitalists on the cap table still matters. Their connections and expertise are valuable. But I especially like that Fundrise is a private company itself, often using the very products it invests in (Ramp, Inspectify, Anthropic, dbt Labs, etc). This hands-on involvement can result in deeper due diligence than traditional VCs typically perform. And when Fundrise can also help drive business to those portfolio companies, that’s an enormous value add any private company CEO would want.

For these reasons, I’m bullish on Fundrise’s ability to keep backing some of the most promising companies in the years ahead.

The Global AI Race: China vs. the U.S.

We wrapped by discussing the difference in global attitudes toward AI. China is moving forward aggressively and optimistically, while the U.S. often takes a more cautious, regulatory-heavy approach.

For me, this only reinforces the need to maintain exposure. I don’t want to look back in 20 years and wonder why I sat on the sidelines during the biggest technological shift of our lifetimes.

If you want to hear the full conversation—including deeper dives into valuation metrics, venture fund strategies, and the practical realities of competing for elite deals—you can listen to the episode below.

You can also listen by subscribing to my Apple or Spotify podcast channels. If you’re a venture capital investor, I’d love to hear from you. What are you seeing and what are some of your favorite investments?

Invest in Private Growth Companies

Companies are staying private longer, which means more gains go to early private investors rather than the public. As a result, it’s only logical to allocate a greater portion of your investment capital to private companies. If you don’t want to fight in the IPO “Hunger Games” for scraps, consider Fundrise Venture.

About 80% of the Fundrise venture portfolio is in artificial intelligence, an area I’m extremely bullish on. In 20 years, I don’t want my kids asking why I ignored AI when it was still early.

The investment minimum is just $10, compared with $100,000+ for most traditional venture funds (if you can even get in). You can also see exactly what the fund holds before you invest, and you don’t need to be an accredited investor.

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To Your Financial Freedom,

Sam

When I worked in Equities at Goldman Sachs and Credit Suisse, we would occasionally bring a hot IPO deal to market. During the company roadshow, we’d take management around to meet one on one with our largest investors and clients. Sometimes the IPO was so in demand that many clients could not even get a one on one, and instead had to settle for a group breakfast, group lunch, or group dinner.

After meeting management, clients would submit their indications of interest. As the lead book runner of the IPO, we decided how much of an allocation each client would get. And let me tell you, that process was more difficult than deciding which friends and relatives to leave off the guest list for a limited budget wedding.

Some clients got zero shares, which made them understandably angry. But they were zeroed because they either did too little business with us or were known for flipping shares for a quick profit soon after trading began. Think small hedge funds.

Other clients received far more than the average allocation. If the IPO was ten times oversubscribed, the average client might get 10 percent of their request. But our biggest clients might get 30 percent to 70 percent of what they asked for, based on the business they generated. Think Capital Group, Fidelity, and BlackRock.

When trading began, there was often an immediate pop in the share price, delivering instant gains to these institutions. In other words, the wealthiest clients who paid the most in fees often got the largest allocations and the greatest returns.

You Are Not Rich or Famous Enough to Get a Large Allocation in a Hot IPO

Trying to get a meaningful allocation in a hot IPO is a futile process for the average retail investor. Without enormous wealth, fame, or connections, you simply have no chance. Take Figma (FIG) for example. The design company raised $1.2 billion in its IPO, valuing it at $19.8 billion, the same price Adobe had tried to buy the company for a few years earlier.

Figma and its book runners allocated a tiny portion of shares to retail trading platforms like Robinhood. If you were a Robinhood client, you could indicate your desired allocation, but you would be filled entirely at their discretion. With Figma’s IPO forty times oversubscribed—$48 billion in demand for $1.2 billion in shares—the average allocation was just 2.5 percent of what was requested. In reality, many retail investors got 1 percent or less.

Imagine requesting 1,000 shares worth $33,000 and getting just one share worth $33, like one investor below who had $10 million with his broker. What a slap in the face!

Put in a 1,000 share indication for Figma $FIG IPO on $HOOD, with expectation of the usual 100 share allotment.

Got 1 damn share and I have over $10M with this broker.

There is literally not point to 1 share. Wasted real estate on my screen. pic.twitter.com/e5ur0Ig9op

— Say No To Trading (@SayNoToTrading) July 31, 2025

Or maybe you were luckier, and got 1 share out of a 600 indication of interest like this fella below. But who cares? 1 share doesn’t do anything for anybody at $33/share.

Examples like these are everywhere. Book runners know that many clients and individuals play the game of inflating their indications of interest, so they tend to cut allocations even further to offset the bluffing.

Big Gain On IPO Day

Figma’s IPO ended up popping by 333 percent on its first day of trading, closing at $122 a share. The bookrunners knew it would likely perform well because they had already seen strong demand from institutional clients willing to buy at even higher prices.

If the bookrunners played their allocation cards right, they enriched their most valuable clients by giving them more than the average allocation and making sure those clients knew it. In return, those clients should reward them with more business.

It is not written down anywhere, but that is how business is done. You take care of your clients, and your clients take care of you. Imagine getting a $10 million allocation and making $27 million in one day. It’s like free money if you’re already a big client.

The Johnny Come Lately IPO Investor

After a 333 percent pop on day one, would you aggressively buy a stock trading at ~600 times forward earnings? Probably not. Yet plenty of retail investors get swept up in the hype and jump in. Why not? YOLO for even greater riches.

The problem is that when it is in the headlines, it is already in the price. Once a company is public, the advantages and relative safety of being an early investor vanish. You are now at the mercy of market sentiment and unpredictable outside events.

Say you bought Figma after its IPO jump to $122. The next morning you might have been thrilled to see it spike to $133. But by the end of the day, it had fallen more than 20 percent from that high. That is a rough ride for a new shareholder.

Nobody knows where Figma’s share price will go from here. But if your entry was on IPO day, your average cost is somewhere between $107 and $122 a share at a 600 times forward P/E multiple. That is a steep hill to climb for positive returns. The company now has to set ambitious revenue and earnings targets and beat them consistently to justify that valuation.

Companies Are Staying Private For Longer

In the past, investing in a company during its IPO was safer. For example, Google was a private company for six years (9/1998 – 8/2004) before it IPOed, raising $1.67 billion at a $23 billion valuation. If you invested in Google during its IPO and held on until today, you would have obviously done very well.

But today, companies are staying private for longer with more of the gains accruing to private investors. As a result, it’s only logical to allocate a larger percentage of your investable capital to private growth companies. I aim for between 10 percent to 20 percent.

The Better Way to Invest in Hot IPO Companies

Do you want to fight for IPO scraps and overpay once a growth company goes public? Or would you rather own shares before the public bidding frenzy even begins? Most rational people would choose the latter.

The reality is that many investors either do not understand how the IPO process works or do not realize there is a more strategic way to gain exposure before a company lists. A big reason for that is most people are not accredited investors and are therefore locked out of private company and private fund opportunities.

If you are accredited and want to own stakes in fast-growing private companies—many in the tech sector—you can allocate a portion of your capital to venture capital funds.

The traditional model typically requires a minimum investment of $100,000 to $200,000 and relationships with the fund’s general partners to even get in the door. Once in, you generally commit capital over three years, hope the partners choose wisely, and pay two to three percent in annual fees plus 20 to 35 percent of profits.

Even in venture funds, who you are determines how much you can invest. If a fund is run by a general partner with a stellar track record, demand to invest can exceed the fund’s target raise.

Sequoia Capital, one of the best venture funds in history, is a prime example. Only employees, jailed star founders like Sam Bankman-Fried, large institutions, and close friends and family typically get in—and their allocations are still often reduced.

The Venture Capital Funds That Invested in Figma

Here are some of the VC firms that backed Figma before its IPO and the returns they saw at the offering price. Most investors would not have had the chance to participate in these funds. And even if you did, your allocation would depend heavily on who you are.

Every venture fund sets aside a portion for friends and family as a goodwill gesture and strategic move. Fundraising can be tough, and getting on the capital table of the next hot startup is fiercely competitive. If a VC is raising a $500 million fund, they might earmark $50 million for friends and family.

A personal finance blogger and two-time national bestselling author might be invited to invest $150,000 in such a fund. That investor could add value by promoting the fund’s portfolio companies or aiding future fundraising.

Meanwhile, the CEO of a public company with a strong track record of angel investing could be offered the chance to invest $1 million to $2 million in the same fund. Their involvement elevates the fund’s profile, opens doors to promising startups, and can even lead to strategic partnerships. If appropriate, the CEO’s company might even become a major client for one of the fund’s investments, e.g. Microsoft being an investor and customer of OpenAI.

Demand For Becoming A LP In These Venture Capital funds

Given the success of the Figma IPO for these funds, demand from individuals and institutions to invest in future vintages will only grow. The venture capital firms will then have to decide how large a fund to raise and how to allocate space among investors.

I am personally invested in three vintages of one of the venture firms that backed Figma. Unfortunately, my investment amounts in each are not large enough to create truly life-changing wealth if another Figma emerges. Part of that is because I have a relatively small investment amount ($140,000 – $200,000 each). The other part is that my definition of “life-changing money” has shifted upward since changing my life for the better in 2012, when I left my job.

The Better Way to Invest in Companies With Promising IPOs

Instead of scrambling for scraps during an IPO or paying inflated prices once a company lists, I prefer to invest while the business is still private. As a private investor, here are the key decisions you must make:

1. Choose the fundraising stage wisely.
   Not every private company makes it to an IPO or has an enriching liquidity event. Historically, Series B or C rounds tend to offer the best balance between risk and reward for companies that could eventually go public.
2. Identify the right company or venture capital firm.
   This is easier than most people think. Data on VC firm performance and company growth is widely available. The challenge is gaining access. Being an angel investor is extremely difficult given you often don’t get the best looks.
3. Network and provide value.
   Money is abundant. What is scarce is value-add capital—investors who bring expertise, connections, or platforms that help a company grow. To get into top-tier opportunities, you must offer something more than a check.
4. Be patient.
   Once you secure an allocation, you fund capital calls, provide support where possible, and wait—often 5 to 10 years—for liquidity events.

An alternative approach, and the one I am pursuing more now, is to invest in an open-ended venture fund that already owns private companies I want exposure to. With no gatekeeping or throttled allocations, I can decide when and how much to invest. If I ever need liquidity, I can sell shares.

Not Participating In The Hunger Games for IPOs

I doubt most retail investors had even heard of Figma before its IPO. But I am confident far more people know OpenAI, Anthropic, Databricks, and Anduril. If and when these companies go public, I expect their IPOs will be just as oversubscribed as Figma’s.

As a private investor in these names through Fundrise Venture, I will not have to beg for IPO shares. I will already own them. When they go public, I will be on the receiving end of the liquidity event, not chasing it in the open market. I vastly prefer this position. And the amazing thing is, everybody can position themselves in the same way given anybody can invest in Fundrise Venture. It’s just that not everybody pays attention or reads sites like Financial Samurai.

The difference in opportunity between private and public investing is staggering. And I do not expect that gap to close anytime soon, because most people stick to index funds and ETFs. That’s perfectly fine as it’s a proven path to steady wealth building. But I enjoy the calculated risk of chasing multi-baggers.

I caught my first one during the Dotcom bubble in 2000, when a 50x return in VCSY gave me the down payment for my first San Francisco property in 2003. That win opened my eyes to what’s possible. I have had plenty of losers too, but that is part of the game when you reach for outsized returns.

Chasing Hot IPOs Is a Tough Way to Make Money

Trying to get a meaningful allocation in a hot IPO as a retail investor is like bidding on a fully remodeled, panoramic view home on a triple-size lot in the most desirable neighborhood. Everyone wants it, and the odds are stacked against you in a crazy bidding war.

If you want better odds, you need to change your approach. That means gaining exposure before the crowd even knows the opportunity exists. Instead of waiting for the hot property to hit the market, why not send personalized, handwritten letters to off-market owners to see if they’d be willing to sell? Or hire a top agent with access to private listings for a first look.

Outperforming in investing requires access, patience, and a willingness to take calculated risks. Build your network, create value, and enhance your reputation to gain access to private investment opportunities.

Or, you can skip all that and just invest in an open-ended venture fund which owns companies you want to invest in.

After Figma, the next company I’m most excited about seeing go public is Rippling, also based in San Francisco. You’ve probably never heard of it either. It’s in the HR software space. However, for those who know the backstory, it’s a fascinating tale of redemption and growth. If it does IPO, I’ll be sure to share how it goes!

Invest in Private Growth Companies

Companies are staying private longer, which means more of the gains are going to early private investors rather than the public. If you do not want to fight in the “Hunger Games” for a tiny IPO allocation, consider the Fundrise Venture instead.

Roughly 80 percent of the Fundrise venture portfolio is in artificial intelligence, an area I am extremely bullish on. In 20 years, I do not want my kids asking why I failed to invest in AI or work in AI when the industry was still in its early stages.

The investment minimum is only $10, compared with most traditional venture capital funds that require $200,000 or more—and that’s if you can even get in. With Fundrise Venture, you can also see exactly what the fund is holding before deciding how much to invest. You don’t need to be an accredited investor either.

For new investors, Fundrise currently offers a $100 bonus if you invest between $10,000 and $24,999, and a $500 bonus if you invest $25,000 or more. I did not realize this until I opened a new personal investment account earmarked for my children, so I decided to invest $26,000. This is on top of the ~$253,000 I have invested ($100,000 added in June 2025) through my corporate account.

Fundrise is a long-time sponsor of Financial Samurai. I am thrilled to have a partner I both believe in and invest in myself. I have met with and spoken to Ben Miller, Fundrise’s cofounder and CEO, multiple times, and our investment philosophies are closely aligned.

There’s a long list of late-stage VC-backed tech companies with strong customer bases that Wall Street investment bankers would love to take public. Many of these multi-billion dollar companies, including Databricks, Klarna, Stripe, and SpaceX, have been subjects of IPO speculation for years. And then of course, there’s the crop of richly valued AI startups, from OpenAI and Anthropic, to Elon Musk’s xAI. 

Those companies will likely continue to be in the spotlight, but in conversations I had with several investors following Figma’s debut, other names came up as more likely to IPO sooner including Canva, Revolut, Midjourney, Motive, and Anduril. 

“Having positive IPOs is a good signal for everybody,” says Kirsten Green, founder and managing partner at Forerunner Ventures, whose portfolio company Chime recently went public and experienced a 37% pop in stock price on its first day of trading. (Forerunner also has investments in public company Hims & Hers and late stage private companies including Oura.) “I believe we should revisit this idea: an IPO is the Series A of being in the public market–and having that really be a motivator to people’s willingness, and maybe even eagerness to go public.”  (As if on cue, HeartFlow, a medical technology company, filed an S-1 for its IPO at a $1.3 billion valuation on August 1).

Kyle Stanford, the director of research on US venture capital at PitchBook, notes that just 18 venture-backed companies have gone public through June 30 of this year. This, he says, is a factor of policy uncertainties that translate to funding headwinds as well as the overfunding that occurred in 2021 that continues to stymie venture capital. “Figma hopefully starts to break the dam, but it’s been a pretty slow quarter,” he says.

Though Figma, which makes design software, is profitable and has a strong set of integrated AI capabilities, these qualities are not essential to companies bound for IPO success, says Stanford. He says that investors would prefer companies to generate a minimum of $200 million in revenue that grows at high rates and prioritize positive free cash flow over profitability. Having an AI story is also “very important,” unless the company is very high growth and profitable by wide margins. 

Canva may be a most-compelling case since it’s a design company with similar fundamentals to that of Figma, said multiple investors I interviewed. Design collaboration company Canva has raised about $589 million over 18 rounds at a $32 billion valuation, higher than that of Figma’s at the time of its IPO. “Canva is a big winner when it comes to what happened yesterday with Figma,” says Jason Shuman, an investor at Primary Ventures. Shuman, who is not an investor in Canva, points to Canva’s $3 billion annual revenue and 35% year-over-year growth as signs of its business’ durability.

Others agree. “Canva—after looking at Figma, holy crap—they’re going to try to IPO as soon as possible,” says Felix Wang, Managing Director and Partner at Hedgeye Risk Management, who is not a Canva investor.  Canva, which was recently valued at $37 billion during a share buy back, did not respond to Fortune’s request for comment.

Wang and others note that the surge in Figma’s price is, in many ways, not actually driven by Figma. Rather, the market is at an all-time high, causing retail trader demand for companies new to market. “They don’t even know this company, but they know it’s a new company,” says Wang of retail traders investing in Figma. “They’re going to put some money into it, and then, more interestingly: they’re going to show it off on social media.”

As Figma is to Canva; NuBank is to Revolut, reasons Primary’s Shuman. He looks at fintech NuBank, which is up around 13% from its early 2025 IPO and thinks that Revolut, which has a very similar business model, could copycat. Revolut told Fortune in a statement: “our focus is not on if or when we IPO, but on continuing to expand the business, building new products, and providing better and cheaper services to serve our growing global customer base.” 

Another potential IPO candidate in the near-future is chipmaker Cerebras, says Primary’s Shuman, who invests in vertical AI, B2B, SMB and finance and defense companies but has no stake in Cerebras or Revolut. (Cerebras filed an S-1 in September 2024 but its IPO was delayed by regulators concerned about a $335 million investment by UAE-based G42. Now, it’s been cleared by regulators for a public market listing, but the company has held off on an IPO as it fundraises $1 billion, reports The Information.)

Many companies, including the largest and hottest private company OpenAI (which just nabbed a $300 billion valuation, per the New York Times), have significant incentives to remain private. This is because they can avoid public scrutiny that arises from disclosures required of public companies and have access to significant private capital for liquidity infusions that are often essential. 

Yet, the fact that behemoths like OpenAI, Stripe ($91 billion valuation) and SpaceX ($400 billion valuation) are private may even be a hidden cost for the public market. “I’m going to get philosophical,” says Forerunner’s Green. “Part of the public market was created so the broader population could participate in the economy and in the growth of the economy; it wasn’t meant to sit in a few people’s hands.”

One behemoth may be entering the stock market limelight. Anduril, the defense tech company that nabbed a $30.5 billion valuation on its Series G, has incentives to remain private due to the nature of its business. But Pitchbook’s Stanford predicts it to be the next tech IPO. In addition to Anduril’s CEO announcing it will “definitely” become publicly traded, its value proposition is core to Trump Administration priorities in security and defense, which could make it a hot pick for investors, Stanford reasons. 

“Other than that,” he says the list of potential IPO candidates these days is long: “There’s probably about 300 other companies that it could be.”

CRV has secured $750 million toward the 55-year-old venture firm’s twentieth flagship fund, it announced on Friday.

The new fund is smaller than the $1 billion early-stage fund CRV closed in the fall of 2022. At that time, the firm also announced a $500 million second Select fund, a capital pool for backing late-stage rounds of existing portfolio companies.

It’s no surprise that CRV is not raising a late-stage fund as part of its new fundraise. Last year, the firm told The New York Times it was returning $275 million from its $500 million Select fund to investors. The firm explained that it would not be raising another late-stage vehicle because follow-on rounds for many of its companies would lower its overall returns.

CRV’s limited partners were eager to back the firm’s smaller fund, the firm said. It raised its entire $750 million fund in just four weeks, with demand for double that amount, CRV wrote.

The latest fund will be used to invest in seed and Series A startups and it will focus on backing consumer and devtools companies.

CRV is known for leading DoorDash’s seed financing and the Series A rounds for both Mercury and Vercel, a cloud platform for web developers, which was last valued at $3.25 billion.

Since its founding in 1970, CRV has backed over 750 startups, with 80 of them eventually going public.

The firm’s latest investments include CodeRabbit, a startup for AI code review, and Outtake, a company that uses AI for cybersecurity.

Two years after securing $1 billion in commitments from over 20 countries, the NATO Innovation Fund (NIF) is entering a new chapter, marked by the arrival of two new partners and the departure of its penultimate founding team partner.

In a context of increased military spending across NATO members, investment in dual-use technology has skyrocketed since the initiative was first announced in 2021. Once a no-go-zone for institutional investors, defense and resilience tech last reached an all-time high of 10% of all VC funding in Europe, where nearly all NIF’s backers are located.

This booming interest should have given NIF a first-mover advantage, but the fund was hampered by management challenges and a series of high-profile departures. After the 2025 NATO Summit in The Hague reaffirmed its importance last June, NIF is now emerging with an almost entirely new investment team. It is composed of three partners.

While NIF originally had four partners and one managing partner, a person familiar with NIF said that this flat, three-partner model will be the structure in place for the foreseeable future, suggesting that no new hires are to be expected. These two appointments had previously been rumored, but the identities of the new partners had not been confirmed.

Two of the partners are new hires: Ulrich Quay and Sander Verbrugge, who will be based in Amsterdam. Quay, a German national, was most recently in charge of corporate investments as a vice president at BMW, where he previously founded and led corporate venture fund BMW i Ventures. Verbrugge, a Dutch PhD in molecular biophysics, was previously a partner at deep tech VC fund Innovation Industries, which he joined after working at semiconductor design and manufacturing company NXP. The third partner is London-based VC Patrick Schneider-Sikorsky, now the last remaining member of the original investment team. Alongside the new hires, the fund announced the departure of founding team partner Kelly Chen, who confirmed to TechCrunch that it was her decision and that she will be stepping away to build a new venture. Chris O’Connor, another founding team partner, departed earlier this year with similar plans.

Chen currently sits on the board of several startups backed by NIF, but will transition her board responsibilities once her employment at the NIF has wrapped up, TechCrunch learned from its chief communications and marketing officer, Amalia Kontesi. 

While some observers wish the fund had deployed capital faster, she said NIF “is on track to meet [its] investing goals for the year.” Since its inception, NIF has made 19 investments: seven into funds such as OTB Ventures, and 12 into startups including Space Forge and Tekever, which makes dual-use drones.

Still, adding new partners with industrial and scientific backgrounds, no matter how impressive, may not satisfy those who wish that the fund could invest in Ukraine or pure defense, as opposed to dual use, in response to Russia’s war economy. But it is also in line with NIF’s broader thesis to “empower deep tech founders to address challenges in defence, security, and resilience.”

However, NIF has also ramped up its efforts on the defense side. Its team was heavily involved in the development of NATO’s Rapid Adoption Action Plan, aimed at accelerating the adoption and integration of new technological products for defense. NIF has also been building up its Mission Platform Group with strategic hires including John Ridge, who was hired as chief adoption officer in 2024 to help portfolio startups navigate military procurement.

As for its new partners, they were once again hired through a process previously described by VC Michael Jackson as akin to “building a boy band” — identified by NIF’s board of directors and approved by LPs, rather than having teamed up based on shared history or chemistry. 

This may be inevitable for an organization that now counts 24 countries as limited partners, but was often pointed as one reason the previous team didn’t gel. This time, all three partners got to meet throughout the recruitment process and spend time together since then to “ensure a smooth transition and to position the team for long term success,” Kontesi said.

In a statement shared exclusively with TechCrunch, NIF’s vice chair, professor Fiona Murray, compared the organization to a startup. “We are proud of what we accomplished but like any effective team we are learning, experimenting, improving:  speeding up our processes, expanding our platform support for startups, doubling down on ecosystem building and more broadly recognizing the need to build the sector and the capital stack.” 

Murray expressed pride in having brought together a qualified team that can collaborate effectively, creatively and quickly. “They will enable us to move even more rapidly and decisively to drive the Alliance’s technological agenda and support the best founders across European ecosystems,” she previously wrote in a joint statement with NIF’s chair, Klaus Hommels. 

Hommels’ other activities as an investor have prompted questions about possible conflicts of interest, but no change appears to have been made to his role during NIF’s recent LP meeting in Venice. Rather than dwelling further on its reorganization, NIF seems set on helping NATO become more resilient. “In this next phase,” NIF’s vice chair said, “you’ll see us refocus on DSR opportunities and emphasize building companies that can drive industrial scale and really support ecosystems across Europe.”

Crypto volumes have plunged from a post-Trump election surge of $126 billion to a mere $35 billion. Tech stocks remain sluggish compared to their former highs, even as the dollar hits a decade low. Venture capital feels like it’s collectively holding its breath, with top Silicon Valley firms pivoting their business models. This isn’t a collapse — far from it. It’s a rare, fragile pause. A “wait and see” moment of equilibrium that, like all market pauses, likely won’t last.

Behind the headlines, a far bigger story is unfolding. The United States and China have quietly reopened high-level trade talks aimed at easing the tensions that have defined the past five years of decoupling and protectionism. According to Bloomberg, these negotiations are among the most serious since Trump-era tariffs began reshaping global supply chains. At the same time, China is reportedly loosening capital controls and courting global investors again, which suggests Beijing views the current economic stall as too risky to endure.

If these talks produce breakthroughs — whether tariff rollbacks, a tech export détente or coordinated policy resets — investors can expect a market reaction not seen since early 2021. In short, this stillness may be the calm before the next global bull run. When capital floods back into high-growth sectors, it will do so suddenly and violently.

Founders should see this moment for what it is: a gift. The quiet between cycles is the rarest and most valuable time to build. Attention is cheap. Competition is minimal. Customers are more accessible. And though investors seem quiet, they’re watching closely for the teams that stayed focused while others lost steam.

Related: Today’s Biggest Companies Are Acting Like VCs. Here’s Why Startup Founders Need to Pay Attention.

For startup founders, the single most important mandate now is to increase velocity. This doesn’t mean grinding longer hours or chasing a vague idea of “hustle.” It means removing friction from your product cycle and delivering tangible features or updates to users every week. If your roadmap is quarterly, break it down into weekly shippable blocks. Tools like Linear and Notion help teams stay aligned without heavy process overhead. For UI or user-facing experiments, Figma remains one of the fastest ways to move from idea to prototype without slowing development. Founders must get hands-on with their products and focus on delivering value to power users.

Equally critical is user proximity. It’s easy to skip customer conversations when fundraising is tough and feature velocity slows, but that’s exactly when listening matters most. Even five brief conversations can reshape your roadmap. Ask simple questions: What frustrates power users right now? What features did they stop using, and why? This feedback doesn’t live in dashboards or pitch decks — it lives in the space between what users say and what they wish existed.

Another key use of this pause is building owned distribution. Paid channels are overpriced during market stagnation, and unless you’ve raised a mega-round, you can’t outbid incumbents. Instead, focus on organic reach and audience trust. Use content marketing tools like Substack or Beehiiv to grow an email list that’s immune to algorithm shifts. Invest time in SEO and keyword ranking. Record short product explainers or vision videos with Loom or Descript — not to “go viral,” but to humanize your build process and deepen audience trust through transparency. When markets heat up, people will remember the builders who kept showing up in the quiet— and say, “I’ve got the alpha on a hot project that’s about to pop.”

Macro signals are aligning. Long-term bond yields are starting to wobble, suggesting markets expect increased government stimulus or monetary easing. Chinese capital markets are showing signs of foreign inflows again, especially in ETF activity across Hong Kong and Singapore. Central bank rhetoric is shifting — from “containment” to “cooperation.” Once that shift becomes public and coordinated, markets will snap back, starting with high-risk, high-reward sectors like crypto, AI infrastructure, e-commerce and frontier B2B tooling.

Here’s the truth most won’t say: you won’t have time to prepare when that happens. The winners of the next cycle won’t be those who waited patiently for conditions to improve. They’ll be the founders who treated this silence like a sprint, not an intermission. Then boom! Silicon Valley’s legendary VC, Tim Draper, wrote a social media post saying, “Slack transforms communication, Microsoft responds with Teams. Tesla enters the market, and suddenly every automaker rediscovers innovation. Progress happens in bursts of energy.”

Related: 6 Hidden Costs of Scaling Your Business Too Quickly

Being first to market matters. That means launching scrappy MVPs before they’re perfect. Writing landing pages before the product is done. Building waitlists and generating buzz, even if customer acquisition costs aren’t optimized. This isn’t the time for polish; it’s the time for presence. Investors remember who shipped, who listened and who made noise without needing a bull market to do it for them.

This moment in the cycle doesn’t feel urgent, but it is. The silence is a setup. The only founders who survive the surge will be those building now, shipping weekly, while the world isn’t watching.

Ship faster. Build deeper. Talk to your loyal users. Grow your content channels. Engage.

Because when capital returns, it won’t send a save-the-date.

It will kick the door down. And everything you’ve built in this quiet stretch will either stand or be swept away when the big players come in.