Key predictions for private capital in 2025

With distribution rates reaching their lowest level in over a decade and a slower exit market, many private capital investors took a more cautious approach to dealmaking in 2024. In Q3 2024, we saw global venture capital funding dip to $66.5 billion, a 15% drop quarter-over-quarter.  

However, private capital had bright spots throughout the year as well—namely in sectors like artificial intelligence (AI), which captured almost one-third of all global venture funding in Q3 2024. 

With 2024 coming to a close, we surveyed almost 300 private capital professionals to gauge their outlook for the year ahead. Findings covered expectations for deal sourcing, data and AI, and fund value creation, which we compiled in our annual private capital predictions report. 

Keep reading for a preview of the first two insights, but be sure to check out the report for the full analysis. 

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Prediction 1: Deal sourcing will be top of mind

This year’s survey revealed a significant change in investor priorities. Last year, the highest percentage of respondents ranked “network building” as their top priority, followed by “new deal sourcing.” 

The tides have changed, with the highest percentage of respondents now ranking new deal sourcing as their number one focus, followed by network building. The shift is significant: 50% of respondents listed new deal sourcing as their top focus for 2025—up from 30% last year. 

To understand what’s driving this change, check out our report. Hint: there are two primary factors. 

However, dealmaking success in 2025 hinges on a pressing challenge: competition from other firms. In fact, 42% of respondents cited competition as a key factor influencing their deal flow in 2025.

In response to heightened competition and a growing focus on deal sourcing, many firms are revisiting sourcing strategies—a trend our data supports. This year, there was a slight preference for outbound sourcing, a shift from prior years when more respondents anticipated sourcing the majority of deals from their existing networks.  

Andre Retterath, Partner at Earlybird Ventures, shares his take on this shift:  

“Historically, around 70% [of deals] were mostly inbound, driven by a great brand—either firm brand or personal brand of the investor. We see that as competition increases among investors, a shift from mostly inbound to outbound—meaning investors need to [...] do their homework, desk research, be data-driven, [and reach] out to the most promising founders.” 

‍View the report to learn how you can follow top firms and optimize your strategy for outbound sourcing in 2025. 

And for more in-depth analysis on what top firms are doing differently—and to see how your firm compares to 3,000+ VCs—check out our benchmarking tool.

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Prediction 2: Data and AI complexities will settle 

AI has dominated discussions over the past few years, especially in private capital. However, this AI boom has brought ample challenges around how firms manage and apply data and AI-driven insights effectively.

Our data suggests there’s a sense of fatigue setting in. Each year, we ask firms how many data sources they use to evaluate a deal. In last year’s survey, we saw a rise in the number of data sources firms were using, with nearly 30% reporting they use seven or more data sources.

This year, however, the trend was different. For example, the percentage of firms using four to six data sources remained steady at 49%, hinting at a sweet spot for the number of data sources firms use to evaluate the majority of deals. 

Investors are figuring out which metrics are essential and which are just noise. As Adam Shuaib, Partner at Episode 1 Ventures, puts it:

“You very quickly get to a point where additional sources are not adding more value. I think it's about how you use those existing sources in a more clever way… looking at those four or five different sources, but they're responsible for probably 35%, maybe 40% of the deals that we've done in this fund.”

The same trend applies to AI, where firms are honing in on its ideal use cases in their investment process. Last year, 40% of firms reported using AI to make investment decisions, but this year, that figure dropped to just 13%—with respondents primarily using AI to boost productivity and streamline research. 

To uncover additional insights into how exactly firms are using data and AI, view the full report. 

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Streamline your private capital workflows with Affinity

To uncover our final prediction—and to dive deeper into the rationales behind all three—don’t miss our 2025 private capital predictions report.

In the meantime, see why 50% of the world’s top private capital firms use Affinity to stay ahead in a competitive landscape. Here are some of the ways Affinity changes the game for private capital: 

• Simplify outbound sourcing: Affinity automatically captures email and meeting data, creating CRM records for every person and company your firm interacts with. By mapping out your network and enriching records with key details—like relationship strength, last meeting date, and last email—you can quickly find the strongest path to a founder and personalize your messaging. 
• Boost productivity with AI-driven tools: Affinity Notetaker summarizes and transcribes your virtual meetings, so your team can spend more time in thoughtful discussions while having the most accurate insights synced instantly to your CRM. 
• Accelerate diligence with Deal Assist: Affinity’s conversational AI, Deal Assist, answers your deal-related questions by using the decks, PDFs, notes, and transcripts stored in your CRM—so you can skip the hassle of sorting through your inbox and spreadsheets and instead focus on progressing the right deals.

Firms using Salesforce can seamlessly integrate these insights into their existing CRMs with Affinity for Salesforce. 

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