As 2025 draws to a close, venture capital has revealed a year of contrasts. While the sector showed early signs of recovery, the journey has been anything but straightforward, especially compared with 2024. Yet, according to Ivan Nikkhoo, Managing Partner at Navigate Ventures, there are clear, encouraging signs that the market is finding its footing.

Venture Capital: Figures and Recovery Outlook

The figures for the first half of 2025 did not meet expectations. In Italy, for example, fundraising was halved compared with the previous year. Broadening the view to a global level, the situation does not appear much different. “I think that the beginning of this year, in terms of fundraising, has been one of the worst periods that the venture capital industry has experienced in the last ten to twenty years, with total capital raised by funds lower than at any other time,” observes Nikkhoo. Additionally, most of the available capital is going to the larger, established, better known funds, which leaves smaller funds and emerging managers at a significant disadvantage.

The reasons for this underperformance are several. “The first is certainly the lack of distributions to Limited Partners who, in turn, would have invested in funds. Without the necessary liquidity, both LPs and family offices had to stop,” he adds.

While venture capital figures remain below the average of the past decade, a trend is emerging that is supporting the recovery: growing interest from international investors and family offices, both in venture capital and in private markets.

“I think this recovery is partly due to the reopening of public markets in the United States. But also to the significant increase in secondary and continuation funds that allow family offices and LPs to have greater liquidity. Lastly, a general optimism in the private and public markets is making investors feel more confident and inclined to make new investments. Even if the figures are still lower than in previous years, we are seeing growth quarter after quarter. Thus we are very confident about the path we are on,” explains Nikkhoo.

Another potentially decisive factor will be the pressure from the growing number of unicorns – private companies valued at over one billion dollars – that will eventually have to generate liquidity for their shareholders, thus opening new listing opportunities.

Navigate Ventures: Extending the Runway for High Growth Startups

Navigate Ventures was founded to address a structural inefficiency in VC capital-supply chain: the limited availability of institutional growth capital during growth and expansion rounds.

“My previous professional experiences as CEO of a software company, then in an advisory role in as an investment banker and a merchant banker, made me notice that if you look at the graduation rate of companies along their fundraising lifecycle– from pre-seed to Series A to growth and beyond– the percentages are very low.

In the United Kingdom, for example, only 6% of companies manage to move from the seed stage to Series A. In the United States, the graduation rate from Series A to the Growth stage is 35%.” High failure rates are often linked to the immaturity of companies, lack of product market fit, team issues or, in many cases, to the inability to access additional capital.

“In many cases, these are not wrong companies, but simply startups that do not quite have the necessary traction and unit economics to raise the next round. They simply need another six or nine months before the ideal moment to raise capital. Our goal is to extend the runway of these companies, helping them reach the next round. We realized that many already had a market-fit product, revenues, and solid teams. They just needed a little more time – and support – to reach the following round. That’s how it all began,” says Nikkhoo.

From Foundation to Listing: The Challenges for Startups

From the decision to start a company to its final liquidity event, a business goes through different stages, each characterized by numerous challenges. “In the initial stages there are five main actors to consider for success in addition to the ever importance of the team: The first is a deep understanding the problem you want to solve; the second is the founders’ ability to understand how to bring an adequate product to market; the third is how to achieve scalability. The fourth concerns favorable market conditions and the last is capital efficiency. Not everyone understands the importance of these factors, and that is why the startup failure rate today is so high.”

When a company prepares to go public, it is essential to define a clear strategy and identify the most suitable market. “IPO windows are often unpredictable; they deal with emotions more than anything else. They open and close inconsistently. And the size of the companies that go public is also increasing. Today, to succeed with a public offering, you need to reach really large numbers. This year the markets have reopened, and some companies have listed successfully, but there is no guarantee that the trend will continue next year.”

Venture Capital: Opportunities, Trends in Growing Sectors

Navigate Ventures invests in AI-enabled B2B vertical SaaS and horizontal enterprise platforms—typically once early-stage technical and market risk has been mitigated, and a repeatable, data-driven go-to-market motion has emerged.

“AI will certainly reshape enterprise software,” says Nikkhoo, “we see strong secular demand across logistics, healthcare, robotics, and cybersecurity. These are areas where capital efficiency, data intensity, and real-world impact converge.”

How to Select the Funds to Invest In

How can LPs be encouraged to seize venture capital opportunities? By selecting funds or managers based on several key criteria, including team, development stage, geographic location, and vintage year. For family offices re-evaluating their private-market allocations, Nikkhoo emphasizes disciplined manager selection and diversification across team, stage, geography, and vintage years.

“When investing in venture, you are ultimately backing people. Assess the team’s domain expertise, alignment, and discipline. Understand the stage at which they operate and the ecosystem they serve,” he advises.

Vintage year matters significantly: funds launched during periods of capital scarcity often generate superior returns. “Funds formed in challenging markets typically benefit from lower valuations, more rigorous underwriting, and stronger alignment between founders and investors.”

Looking Ahead

Despite lingering headwinds, the long-term case for venture capital remains compelling. Innovation cycles in enterprise software, automation, and applied AI continue to accelerate, and liquidity pathways are re-opening. For family offices seeking exposure to innovation without assuming early-stage volatility, Navigate Ventures offers a structured approach—anchored in capital efficiency, short holding period, disciplined growth, and downside protection—to participate in the next cycle of value creation.

“When you invest in startups you are betting on a team. It is no different when you invest in a fund. It is all about the manager and the vintage year”, he concludes.