If you’re a growing company, you know how all-consuming fundraising can be–particularly in today’s market. 

As fractional CFOs, we help clients from pre-seed to Series B+/M&A navigate an incredibly challenging fundraising landscape. From when to fundraise, how much to fundraise, and the decision whether to raise equity or debt, we use data to help guide our clients to the best decisions for their business. Today, we’re sharing some of our key insights—including proprietary analysis you can’t get anywhere else. 

Below, we share our top 5 trends from our latest Quarterly VC Market Insights Report including analysis of VC activity and industry trends. Read the full report here from Pilot’s CFO Services Team.

CFO Services VC Market Update: What We’re Seeing in H1 2025

At Pilot, our CFO Services team works with hundreds of venture-backed startups, providing real-time insight into how companies are operating—and how the market is responding. Based on proprietary data and broader VC market trends, here are the key takeaways from the first half of 2025.

The Key Trends of H1 2025: Summary

1. The percentage of tech companies with more than 36 months of runway has increased 6% since H1 2023, while shorter runways remained largely unchanged. Based on runway data, our analysis indicates selective capital allocation amid ongoing funding challenges.
2. VC deal value in Q2 2025 is up ~40% YoY. Much of this growth was fueled by massive AI deals, but also by a shift in strategy. Founders are raising larger rounds upfront to extend runway, while VCs are concentrating capital into fewer companies with strong fundamentals.
3. While deal value in Q2 2025 increased, deal count fell 13% YoY, signaling a shift toward fewer, larger bets. Investors are doubling down on high-conviction deals, while early-stage activity shrinks, with sub-$5Mn rounds hitting a decade-low share.
4. Tech companies accounted for over 60% of H1 2025 deal value, fueled by standout raises like OpenAI’s $40Bn and Scale AI’s $14.3Bn. Despite concerns around tariffs and macro volatility, funding in AI has remained strong.
5. While capital demand continues to outpace supply across all stages, the gap narrowed slightly from 2024 highs, particularly at the venture growth stage, due to a growing number of VC deals in H1 2025.

1. Pilot Proprietary Data Trend: Longer Cash Runways

According to Pilot proprietary data, a higher % of companies have >36 months of runway.

Pilot proprietary data shows the share of unprofitable, venture-backed companies with more than 36 months of runway rose to 24% in Q2 2025, up from 18% in Q2 2023, the highest level in two years.

Meanwhile, the proportion of companies with less than 36 months of runway has remained relatively stable. The increase in the >36-month cohort likely reflects a subset able to raise larger funding rounds. This suggests slight improvement for companies securing stronger investor backing.

While broader funding conditions remain tight, the uptick in longer-runway companies is a positive signal. We continue to view runway as a lagging indicator and will monitor trends in coming quarters.

Note: The analysis is based on data from companies active during the specified period, rather than tracking a consistent cohort of companies over time.

2. VC Market Trend: Deal Value Is Up, Driven by AI and Larger Rounds

Deal value increased ~75% between H1 2024 and H1 2025. 

H1 2025 saw ~$163Bn in total deals driven by a blockbuster Q1 ($92.9Bn), followed by a softer Q2 ($69.9Bn). The 25% QoQ decline underscores ongoing market selectivity and an absence of mega-deals like OpenAI’s $40Bn raise in Q1. While Scale AI’s $14.3Bn raise was the largest in Q2 (and 2nd largest VC deal ever), it fell short of matching the scale of Q1’s outlier activity. 

Median deal sizes climbed across all stages in Q2 2025, reflecting a preference for larger, fewer rounds. 

Outlook: 

H1 2025 confirms a bifurcated market: capital is available, but only for winners with strong fundamentals. AI’s share of capital may normalize slightly, but the sector is likely to continue setting the tone for megadeals.

3. VC Market Trend: Deal Count Growth Slows as Investors Pull Back from Early Stage

Deal count increased 3% between H1 2024 and H1 2025.

H1 2025 deal count increased 3% YoY, with Q2 down 10% vs. Q1 2025. The sharpest pullback came from pre-seed and seed rounds, suggesting growing investor caution and a shift away from riskier, early-stage bets. 

The Q2 slowdown underscored continued caution across the market. Capital is increasingly concentrated in a small set of high-quality startups, as the gap between strong and struggling companies grows wider. Investors are writing large checks, but only for teams with clear execution and strong fundamentals.

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4. VC Market Trend: Tech Leads VC Activity Amid AI Surge

Tech deals continue to dominate, accounting for over 60% of total H1 2025 deal value.

The trend of outsized AI investments accelerated in H1 2025, with tech deals making up over 60% of total deal value. In Q2 alone, 5 AI deals were greater than $1Bn, including Scale AI, Safe Superintelligence, Anduril, Grammarly, and Thinking Machine Labs. 

As a percentage of total deal value, the following shows a breakdown of VC deals by industry in H1 2025 vs H1 2024: 

• Technology (including AI) = 61% (+13% YoY)
• Healthcare = 14% (-13% YoY) 
• B2B/B2C = 18% (+3% YoY) 
• Other = 7% (-2% YoY)

Investor interest is strongly focused in sectors like AI, defense tech, fintech, and crypto (areas aligned with current policy priorities) and that momentum is expected to continue.

5. VC Market Trend: Supply-Demand Imbalance Eases Slightly

Funding imbalance eased slightly in H1 2025 but remains acute at later stages.

While capital demand outpaced supply across all stages in H1 2025, the gap narrowed slightly from 2024 highs, particularly at the venture growth stage. 

Despite some improvement, capital remains tightly concentrated - with AI mega-deals continuing to absorb a disproportionate share - keeping the broader funding environment constrained.

Want help with your next fundraise?

While today’s fundraising landscape poses unique challenges, our team of experienced fractional CFOs and strategic advisors are here to help. We can help you fundraise from pre-Seed to Series C/M&A. To discuss your specific situation, book time here.

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