“To the extent you are mid-stream in increasing the capital, stop it as soon as possible. We repeat, stops anything mid-stream ASAP,” Hazard wrote. “And be really prudent how your capital is being deployed.”
Managing partner Charles Hudson told Wireds that his enterprise firm, precursor, many ecommerce startups have bets that could be “heavy affected” by Trump’s tariff.
But, Hudson says, he does not know the best way to strategically strategically around the tariff because “the argument for their time, scale and scope only resides in our president’s head, and the tariff is not being discussed as part of the general policy-making process that will give us more clarity.”
Precursor, who invests in an early stage startup, raised more than $ 65 million for its fifth fund. With this information in a recent interview, Hudson said that it is currently planning to invest in a period of three years instead of two years. Hope the extra time will give the horizon to limited partners, who supply funding to venture to capital firms to see returns on their investment.
Hudson also predicted that selling stock in private startups on the secondary market would create an overwhelming majority of liquidity looking at investors in the next five years instead of acquisitions or returns from early public offerings.
Other VCs agree that the secondary market is likely to be heated. Drummond says, “VCS used to be Param Hodlers, catching for dear life, excluding it until he invests in a startup.” “But in the last 10 years he has had to become a much more disciplined seller, and to find out how to distribute liquidity soon.” This is true for some time because due to rising interest rates and VC being more vigilant, but it is “especially true,” they say.
A database for figures about the analysts of the pitchbook, enterprise capital and private equity markets, warns that tariffs can have a cool effect on international investments, given that once the startup celebrated for “global first” strategies can now be seen as weak.
In the first quarter of this year, before Trump’s official tariff announcements, a small part of the American capital was already flowing for VC deals in Europe and China, compared to recent periods. About 47 percent of European deals included US funding, which was four percent points below the last quarter of 2024.
Pitchbook reporter Liah Hodgson wrote earlier this month, “For decades, the VC is a fierce fuss in the border world, but another week of tariff wars has been indicating a major revaluation.”
Bad news for IPO
Before Trump took over, investors hoped that the Tech IPO market would continue rebounding this year after falling into a recession in 2022. The market was indicating recovery in 2024: There were 176 early public offerings in the US last year, compared to 127 in 2023 and 90 in 2022, according to data collected by the consulting firm I.
The accounting firm KPMG said in a report published earlier this month that “Gendering Market Undex” led several startups to delay its adjacent public debut in this quarter. Mobile banking service Jhankar, ticket giant Stubhub, and Swedish “Buy now, pay later” firm Clarna all banned planned public offerings. The AI Infrastructure firm was Korwave out -Arror – it started trading shares at the end of March.
