2025 Predictions Revisited: What I Got Right and Wrong
As some of you may have seen, we already posted our 26 predictions for 2026 a few weeks earlier. We did this year’s predictions as a team, but it nudged me to reflect on my predictions from last year to see how we fared.
I tried to make these predictions provocative at the time and the results are rightfully mixed. We’ll see how these trends fare as we head into 2026, but after a wild end to the year, I can safely say that we’re teed up for an ever more wild 2026.
The stock market will see a correction of at least 15% with technology stocks taking the biggest hit - RIGHT
While the stock market ended up double digits for the year it toppled >15% from beginning of the year and nearly 20% from it’s top. Technology stocks were certainly hit the hardest amidst this rout (Nvidia started the year north of $150 and hit a lot of $86 a share, a 43% drop), but ultimately bounced back to new all-time highs (it’s now in the high $180’s). That said, while we saw some weakness in software, but the AI-related trade more than covered for those losses.
Nonetheless, the same things that I was concerned about in 2025 leave me concerned on an even more sincere level in 2026. Valuations remain incredibly high (Tesla is trading at >100x EBITDA despite double digit declining sales) and we have the added complication of immense CapEx investment that hasn’t fully materialized in the income statement or balance sheet. As I’ve noted elsewhere, many of the top AI players are gamifying the depreciation schedule of their AI-related infrastructure (extending it well beyond it’s ACTUAL usable life to reduce its cost in the current year) and saddling up to off balance sheet SPVs for data center build outs – both factors that place a tremendous amount of downside risk to the system (as evidenced by rising CDS cost of large infrastructure build out plays like Oracle and Coreweave). These liabilities could cripple these companies (sending shares down dramatically) if momentum in AI falters and given the wealth concentration behind a consolidated list of Mag7 names, a down pattern likely couldn’t be contained to the tech sector.
2) We’ll see more defections from big VC funds and more emerging managers “growing up” - MIXED
The outcome on this one was a bit more ambiguous. We saw some major defections from VC mega funds, especially at the largest firms. There is a clear cultural shift that’s happening at many of the big shops and it will be interesting to see how it plays out in the years to come as these platform funds were able to reload on capital without issue, enabling them to attract talent to replace the departures.
As for emerging managers “growing up”, that was far less definitive. A few of the leading emerging managers started in the last decade raised funds (many of which at still unannounced), but I don’t think we saw anyone really steal the torch from incumbents. The real breakouts seem to be coming from the generation prior (those firms started in 2005-2015). There are a few firms really starting to heat up (folks like Kindred and Conviction come to mind, but there are many more), but given the massive growth of the larger platform firms (including the emergence of Thrive as one of those firms), it’s hard to make the case that we saw a major maturation of the emerging manager ecosystem.
3) A record number of funds will close up shop - RIGHT
I don’t have the data to support this claim, but anecdotally, this seemed to be right on. While it takes a long-time for firms to “die”, I know of a LOT of funds that effectively shut down operations, laid off staff, were acquired and/or returned capital. 2025 was a BRUTAL year for emerging manager fundraises (after a very favorable environment in 2021-2023) and many managers found themselves struggling to raise successive funds. Deep in their deployment cycles, this has left a lot of managers absent capital in an environment where the major platform funds have bid up seed-stage pricing to a level that makes seed investing (where emerging managers generally play) incredibly difficult. A decade ago, simply being in the pack of top quartile seed deals was enough to earn good returns. Now, that looks increasingly difficult and having a “right to win” is more important than ever. I’ve seen some incredibly prominent managers decide to take their ball and go home and suspect we’ll see more leading into 2026 unless there is a major turn-around in fundraising.
4) Tech and Trump break up – WRONG
I successfully called that the marriage between Trump and Musk would be short-lived, but the tech/VC community has gotten far more cozy to Trump than I ever would have anticipated. I theorized that Trump would ultimately have to choose between his traditional MAGA base and the traditionally left-leaning utopiast from the tech world, but much of the tech world has largely abandoned their leftist policy in favor to jump on the MAGA bandwagon. Whether this is a reaction to the impacts of left leaning policies in CA and more recently in NYC or simply the tech community chasing the favor (and dollars) associated with being in Trump’s inner circle, the tech community has shown far greater support for Trump than I anticipated. Keep in mind, it wasn’t long ago that venture capital firms put “F*ck Trump” on their homepage, so to see the broad support we are is fairly surprising.
5) America gets back to “business” – RIGHT
When I wrote this, “9-9-6” was not yet a “thing”. It’s crazy how much a difference a year makes and while we may be past peak “9-9-6” culture, America decidedly got back to business. Folks are bragging about sleeping in the office, culture is far more formal than I’ve seen in recent years and everyone is obsessed with “building”. Given the amount of capital available to founders, companies are tackling ambitious agenda’s with a heavy American Dynamism tilt (which outside of AI, was clearly THE category of interest) and now we’re seeing VCs opine on their new-found expertise in energy, manufacturing and defense policy at a level I haven’t seen since plethora of medical opinions we had from VCs during the pandemic.
I, for one, am ecstatic with the back to business mindset and it’s been great to see so many companies/teams moving with the pace/velocity/execution they are. In many respects, this is leaving a lot of cultures that were forged during the pandemic (which I would largely say were far more focused on work-life balance) in the dust, especially as the AI race provides a perceived prize that could potentially justify the hours, commitment and sacrifices made by these teams. Only time will tell, but I’m all for us getting down to business and hope this continues into 2026 and beyond.
That’s it folks, some right and some wrong. As always, I welcome feedback on our takes and how these trends will evolve in the years to come!