The venture-capital industry has spent the past three years undergoing the most painful adjustment of its modern history. Valuations from the 2021 peak have been written down by 60 to 80 percent across most categories. Fundraising has compressed. The number of active U.S. venture firms has fallen by roughly a quarter.

What has emerged from the reset is, on most measures, a healthier industry. Round sizes are more disciplined. Governance has improved. Exit windows are slowly reopening, with a high-quality IPO cohort emerging across enterprise software, biotech, and AI infrastructure.

The capital that remains is concentrated. The largest firms — Sequoia, Andreessen Horowitz, General Catalyst, Lightspeed, Accel — control a disproportionate share of fund commitments and now operate at a scale that resembles diversified asset management more than traditional venture.

The mid-market has been hardest hit. Funds in the $200 million to $800 million range have struggled to demonstrate the return profile that LPs require, and many will not raise another fund.

But the bottom of the market — pre-seed and seed — has if anything strengthened. Capital is plentiful, founders are more experienced, and the AI cycle has created an unusually rich opportunity set. The question is whether the late-stage discipline of this cycle holds when valuations begin to recover.