What will this year bring in VC? We asked a few investors 

A new year brings with it hope for a better tomorrow — kind of, at least. In the world of venture capital, nothing is quite predictable. The number of firms in the U.S. has taken a sharp dip as risk-averse institutional investors splash money on only the biggest names in Silicon Valley, as reported by the Financial Times. AI is the only category that seems to matter, and that doesn’t look to be changing anytime soon. But the new year has just started, and perhaps so has the impetus for change. We spoke to some VCs to gather their predictions on the new year — the good, the bad, and what might end up being the unexpected. Their responses have been edited and shortened for clarity.The good: As wealthy individuals lower their return expectations for fixed income and cash equivalents, they will look more aggressively to private markets for outsized returns. This channel is expected to invest over $7 trillion in private markets by 2033. In response to this expected influx of capital, we have seen large wealth and asset managers use venture capital as a differentiating strategy among their private market offerings. These institutions have positioned venture to be a strategy where they can offer access to the best deals while capturing a portion of the $7 trillion expected to be invested in private markets through net new flows. Fund managers will simultaneously partner with these institutions to gain access to a new set of LPs that create a new, consistent, and long-term capital stream for their funds.More good: We expect the AI field to start seeing consolidation, primarily through acquisition, in areas where AI can become a commodity, like large language models. The AI companies that will make it to be leaders in their field are opening new market segments and owning proprietary data. The good: The IPO market will fully reopen, and we’ll see some big-name IPOs bring much-needed liquidity. That’s a win for everyone. On the early-stage side, investment pacing will pick up, maybe not to 2021 levels, but certainly more than 2022-2024. It feels like 2025 will be a banner year for venture and hopefully the official start of the next bull run.The bad: 2025 will be a make-or-break year for AI startups selling to enterprises. A lot of AI startups have grown quickly but are still stuck in the “experimental” phase, living on innovation budgets instead of being part of core software spend. Many won’t make the leap, leaving a number of startups on the chopping block as churn and slow growth take over.The good: The emergence of solo GPs and angel funds will drive increased investment into earlier-stage companies — a much-needed evolution for the venture capital ecosystem. We’ll see more specialized and well-defined investment approaches, with industry-specific, knowledgeable investors providing meaningful value to founders. This shift is not only beneficial for startups but is also likely to deliver better returns for investors. Capital allo