Andreas Cser

Deep tech is no longer a niche corner of the market; it now accounts for 28% of all VC funding in Europe, more than any other sector (Dealroom 2025). This includes areas like AI, clean energy, semiconductors, and quantum — but the bigger lesson is how investor appetite has shifted towards technologies and business models that can fundamentally transform industries. At Rex Capital, this resonates strongly. We back companies working in advanced areas like AI and biotech, but also those developing innovations that might seem simple yet have the power to disrupt entire industries. For us, it’s not about complexity for its own sake — it’s about the ability to change markets and scale impact. https://lnkd.in/eFfjFukF

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When Jack Altman merged his fund into Benchmark recently, it wasn’t just a partner announcement, it was a sign that change is afoot in this business. The data has suggested for years that the venture industry is consolidating. Everyone talks about the barbell. Smaller, emerging managers are feeling the pressure most acutely raising. And perhaps a few are quietly asking whether raising Fund II is worth it. Here’s what I think is happening … 1. The Reality of Fund Math Over the last five years, launching a micro-fund ($10M-$30M) became almost a rite of passage. Some did it even as a side job while running a company or as a corporate exec. But the economics are tighter than they look: Raise a $25M fund. 2% management fee = $500,000 per year. Subtract the basics: Fund admin + audit Legal + compliance Travel, software, data subscriptions  One associate or principal Before you know it, the GP is earning less in cash comp than a mid-level PM at big tech - with a 10-year fund life and real personal risk. You are effectively living on carry. That works if you have DPI. It’s brutal if you don’t. 2. The Overhead Drift Most solo capitalists started funds because they love investing and working with early stage visionaries. But investing is barely 50% of the job. The rest is more like running a small asset management business: Capital calls LP updates K-1 distributions Fundraising for Fund II!! Managing portfolio companies through ups and downs Oh yea and event planning, lots of coffees, etc ;) Some people love that. Many don’t. And when it isn’t fun anymore, one starts to question whether its worth doing. 3. The Macro Squeeze At the same time, the LP landscape has tightened. According to a recent Lux LP letter, the number of active VC firms declined roughly 25% (from ~8,000 in 2021 to ~6,000 last year). Seed used to be the scrappy proving ground, but many mega-funds have moved downstream. The result: Valuations stay elevated Smaller funds face thinner margins and slower DPI LPs consolidate into established platforms So What Happens Next? (Three Likely Paths) We’re unlikely to see a loud collapse. More likely, we’ll see a quiet migration. ⌛ The Quiet Wind-Down: Some managers won’t raise Fund II. They’ll manage existing vehicles and shift into advisory work. ⚒️ Return to the Arena: Former operators who started funds in 2020-2021 may decide they miss building. Many will go back into product or operating roles. ⚙️ Platform Integration: The most successful solo GPs may join larger platforms continuing to invest while offloading infrastructure and fundraising. Is this what you’re seeing / feeling on the ground? How do you think the next few years will play out?

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💡 Investment Announcement At the Conduit EIS Impact Fund, our 100-Year Life thesis drives us to back ventures that help people healthier, and more fulfilling lives for longer. We are thrilled to announce Conduit Connect's latest investment in Gladys, an AI-powered home care platform on a mission to fix Britain’s broken care system. Founded by George Robinson and Alex Sorisi, Gladys combines smart technology, logistics know-how, and a relentless focus on better outcomes for both families and carers. The platform matches people in need of support with the UK’s best local carers — offering 5-star care at fairer prices, while helping carers earn up to 65% more than traditional agencies. As George Robinson puts it: “We all know that Britain’s care system is broken. Re-arranging deck-chairs on a sinking ship will not cut it. People are dying unnecessarily, and brilliant carers are undervalued and underpaid. Gladys is using this investment to supercharge its technology, and deliver the service that we would want for our loved ones.” Gladys has already supported tens of thousands of hours of independent living across a 20,000 km area. With this new funding — part of a £1.5m Seed round led by Cornerstone VC — Gladys aims to expand nationwide, delivering hundreds of thousands of hours of quality care by 2026. We believe technology can help rebuild trust and dignity in care — creating meaningful, well-paid work and ensuring that people receive the support they deserve long before they get sick. Rodney Appiah Paolo Pio Exceptional Ventures Gabrielle Morgan Gemma Lakin Conduit Connect The Conduit EIS Impact Fund The Conduit Adam Lawrence #ImpactInvesting #EIS #HealthTech #AIforGood #CareInnovation #ConduitImpactFund #FutureOfCare #StartupInvestment

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