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Last updated Nov 29, 2025
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Friedberg @ 01:10:09Ambiguous
ventureeconomy
Given the current low level of exits and corresponding returns, venture capital funding volumes will decline in the near-to-medium term as limited partners reduce commitments to the asset class, representing a normalization of the market to match the underlying pace of economic growth and innovation.
ultimately, shouldn't the exit volume define the amount of capital that LPs should invest in this asset class to get a return that compensates them for the illiquidity relative to public markets with the same kind of risk levels? At the end of the day, it is what it is, and you're going to see a reduction in venture dollars. And that's just the market normalizing the the economy only grows and only innovates at a certain pace, maybe is what the data shows.View on YouTube
Explanation

Friedberg’s claim was that, because exits are weak, LPs would cut commitments and “you’re going to see a reduction in venture dollars”, i.e., a normalization of VC capital to the real pace of growth and innovation.

What happened to venture funding into startups?
Global VC investment in 2024 was already stabilizing well below the 2021 peak but modestly up from 2023 (about $368B vs. $346B).(practiceguides.chambers.com) In 2025, the value of PE/VC‑backed rounds in H1 rose ~25% year over year ($189.9B vs. $152.2B in H1 2024).(spglobal.com) KPMG’s Venture Pulse shows Q1 2025 at $128.4B and Q2 2025 at $101.05B,(kpmg.com) and then Q3 2025 climbing to about $120.7B, marking the fourth consecutive $100B+ quarter globally.(kpmg.com) Crunchbase‑based analyses concur that Q3 2025 funding (~$97B) was up ~38% year over year and that each of the last four quarters exceeded $90B, the strongest run since 2022.(news.crunchbase.com)(infotechlead.com)(eqvista.com) On this standard metric (capital deployed into startups), there has not been a broad reduction; funding volumes have rebounded and are running higher than in 2023–2024.

What happened to LP commitments / VC fundraising?
KPMG also reports that global VC fundraising by funds was very weak: only $48.8B raised by the end of Q2 2025, putting 2025 on track to fall below 2024’s eight‑year low of $187.3B.(mondaq.com) That is consistent with LPs being more cautious and reducing new commitments to the asset class, even as existing dry powder and capital concentration into AI megadeals keep deployed “venture dollars” high.(kpmg.com)(kpmg.com)

Why this is ambiguous rather than clearly right or wrong
If you interpret “reduction in venture dollars” as funds raised from LPs, then 2025 data so far supports his view: fundraising is materially down and likely to post a new cycle low, matching his story about LPs normalizing commitments.(mondaq.com) If you interpret it as capital invested into startups, the near‑term outcome has been the opposite: deal funding is up, with four strong quarters in a row, driven largely by AI and defense tech megadeals, and not yet “normalized” to a lower level.(news.crunchbase.com)(spglobal.com)(kpmg.com)

Because (a) his wording is ambiguous about whether he meant LP fundraising or capital deployed, (b) those two metrics have moved in opposite directions, and (c) only ~6–7 months of his “near‑to‑medium term” have elapsed, the prediction cannot be cleanly scored as fully right or fully wrong given the evidence available so far.