2025 predictions: How did we do?

Halfway through 2025, the private capital landscape continues to evolve at breakneck speed. 

Six months ago, we made three bold predictions about the direction of private markets this year. Now, it’s time to revisit those calls and see how they’re playing out in a market that’s as competitive as it is dynamic.

Despite ongoing challenges, more than 70% of dealmakers expect to close more deals in 2025 compared to last year–a signal of measured optimism amid growing pressure to stand out through smarter strategy and sharper execution.

Let’s take a look at how our predictions are holding up—what we got right, what’s still unfolding, and what it might mean for the road ahead.

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Prediction #1: Firms will double down on deal sourcing efficiency

Verdict: Hit (with caveats)

Our first prediction focused on a rising imperative in private capital: operational efficiency in deal sourcing. We anticipated that firms would increasingly harness data and technology not just to streamline processes, but to secure a competitive edge in an ever more crowded and fast-moving market.

The data suggests we were largely on target. According to the latest Data-Driven VC Landscape report, 90% of data-driven VCs now use data-driven methods when sourcing deals, up dramatically from 44% in 2023. This represents a fundamental shift in how firms approach deal discovery and evaluation.

Perhaps even more telling, 38% of data-driven VCs now source more than 40% of their deals using data tools (though this trend is notably more prominent among larger funds with greater resources to invest in sophisticated technology stacks).

Our venture capital benchmark report reinforces this trend from another angle. The decline in deal volume across the industry is being driven primarily by heightened selectivity—not by a lack of opportunities. Major funds are concentrating on fewer, but significantly larger, investments, often leveraging advanced data capabilities to sharpen their focus and optimize capital deployment. This trend reflects a broader industry movement toward quality over quantity, as investors seek to maximize impact and mitigate risk.

The behavioral data also tells a compelling story: network activity and email engagement data show that more firms are focusing on outbound deal sourcing compared to prior years. The shift makes sense; outbound sourcing requires technology to efficiently identify opportunities across large datasets and track relationship pathways for warm introductions.

"In times of uncertainty, there tends to be a flight to quality and people saying, 'Okay, I can't really understand the directions that all of these different trends are going, but I can at least put my chips in a couple of bets that are going to turn out for sure,'" explained Mercedes Bent, Venture Partner at Lightspeed, in our investment trends webinar. 

The caveat? While adoption is accelerating, a widening sophistication gap between large and smaller firms is emerging — setting the stage for long-term competitive imbalance across the market.

Prediction #2: Data and AI complexities will reach an equilibrium

Verdict: Miss

We predicted that 2025 would see data and AI complexities reach a natural equilibrium, with firms settling into stable technology stacks and moving past the experimental phase. Reality has proven to be more nuanced.

While there are signs of data fatigue and consolidation within technology stacks, we're clearly still in the early innings of the AI transformation in private capital. The emergence of AI agents, autonomous research tools, and content generation systems suggests the complexity curve is still climbing rather than plateauing.

Adam Shuaib, Partner at Episode 1 Ventures, captured the nuanced reality:

"You very quickly get to a point where additional sources are not adding more value. I think it's about how you use those existing sources in a more clever way[…] looking at those four or five different sources, they're responsible for probably 35%, maybe 40% of the deals that we've done in this fund."

Survey data reflects this continuing evolution. While 63% of data-driven VCs plan to increase their tech budgets, that number is down from 79% the year before. Firms are continuing to invest, but with more caution. 

Nearly two-thirds of data-driven VCs (“DDVCs”) now use internal tools for the majority of their desk work, revealing that integration is deepening rather than settling into equilibrium.

Perhaps most tellingly, "Most DDVCs believe we are still early in the 'AI in VC' hype, with the most yet to come," according to survey respondents. 

Meanwhile, AI's role in day-to-day operations keeps expanding: for example, Mercedes Bent noted that memo writing—a process that once required several days—"can get done in four to six hours" using AI, though there remain untapped opportunities in outbound tasks.

The equilibrium we anticipated is still on the horizon, not in the rearview mirror.

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Prediction #3: Demonstrating value will become critical in a competitive dealmaking environment

Verdict: Hit 

Our third prediction anticipated that firms would need to double down on demonstrating tangible value to portfolio companies and LPs, due to the competitiveness of the environment. This prediction has proven accurate.

Our benchmark data reveals that Top Firms (VCs that have proven track records of successfully picking startups that become unicorns or high-value companies) have shifted gears toward portfolio support as a primary value creation mechanism, while liquidity remains constrained. Most significantly, Top Firms have increased the number of introductions made for their portfolio companies, indicating a strategic pivot toward relationship-driven value creation.

This trend extends beyond just our proprietary data. Recent analysis shows investors are directing more capital toward supporting existing portfolio companies, rather than pursuing new investments.

Brian James Murphy, lead data scientist at Salesforce Ventures, summarized the imperative perfectly: "I think, in a world where capital is super commoditized, especially at the growth stage, it's more important now than ever to measure the value you're creating."

The competitive landscape has indeed intensified. With just 20 VCs capturing 60% of the total capital raised last year, smaller and emerging firms are finding it increasingly difficult to compete on capital alone. Success increasingly depends on demonstrable value-add capabilities and relationship depth. 

This shift represents more than just market dynamics. It's a maturation of the private capital industry toward more sustainable, relationship-driven competitive advantages.

What’s next? 

Our forecast was precise in one critical domain: efficiency. Firms are intensifying their focus on deal sourcing productivity as they strive to demonstrate tangible value in an increasingly competitive dealmaking landscape.

While our call that AI and data ecosystem complexities would reach equilibrium was premature, the industry is undeniably progressing toward heightened sophistication and more strategic AI deployment. Still, private markets remain in the early innings of large-scale AI transformation. More to come. 

For the balance of the year, several trends are unmistakable:

• Marketing consolidation will accelerate.
• AI integration will extend beyond rudimentary adoption into core investment and operational workflows.
• The premium on relationships and demonstrable value creation will continue to rise.

The firms that balance advanced technology with the enduring fundamentals of relationship-driven investing are poised to lead the next wave of market differentiation.

In a word:

"All of us are trying to achieve the same thing: find companies early, invest in them, grow them, and get great exits… Invest in scalable solutions. Invest in your data. It's not always about the tools you're using, but about your ability to aggregate your data," explained Moustafa ElBialy, CIO at Kleiner Perkins.

It’s already almost time to launch our private capital investment predictions for 2026. To get first access to the survey when it launches, and for other private capital insights, sign up for our newsletter and follow Affinity on LinkedIn.

Make better deals, with Affinity’s help 

The private capital environment has never been more competitive. Your edge comes from your ability to efficiently source high-quality deals, leverage your network for warm introductions, and demonstrate measurable value to both founders and LPs.

Affinity is the CRM built for private capital. Here’s how it helps you optimize the entire dealmaking lifecycle: 

• Deal sourcing: Enrich your pipeline and find high-quality deals faster, with critical data and relationship intelligence to facilitate warm introductions. 
• Due diligence: Accelerate your research with Affinity’s AI-driven market intelligence tool, Industry Insights, which finds competitors in a given market and provides essential data on funding, investor histories, and market saturation.
• Deal management: Manage deals more effectively by using Affinity to automatically capture critical deal data, manage key workflows, and discover relationship insights across your firm’s network from a centralized source. 
• Portfolio support: Tackle reporting with Affinity Analytics, and create customized reporting dashboards with enriched data on funding, firmographics, and growth, alongside manually tracked information. 

Get started with Affinity by scheduling a demo today.

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