The boat was gently rocking on the canal as we sailed on a scenic tour of the Dutch capital on Wednesday evening. Despite the spectacle — the sunset glistening off the windows and the water — the attendees’ attention was elsewhere: chatting with LPs to raise money on the sidelines of the 0100 GP/LP conference this week.
But in what is perhaps a metaphor for the current market, one fundraiser, upon realising there weren’t many LPs onboard, leapt off the boat and back onto shore to avoid wasting time, another attendee recounted to me the following day.
The problem is, LPs and GPs are still feeling angsty. Roughly three years into the exits drought, LPs continue to bemoan the lack of liquidity, while GPs acknowledge it’s still a tricky fundraising environment. Plus, there’s been a wild card thrown into the mix: increased geopolitical tensions and a load of harsh new tariffs levied against Europe by president Donald Trump on Wednesday night.
“There is a lot of uncertainty still,” one private-equity focused partner said on a panel, referencing the macro environment as well as Trump’s tariffs.
Over salmon and salads for lunch, one fundraiser, who’s currently seeking cheques for a new fund, described LPs as “reserved”. Meanwhile one public fund LP noted that their peers are “setting the bar a bit higher.”
A ‘soft start’
PitchBook data released this week seems to support the theory so far: European VC fundraising isn’t off to the races in 2025.
European VC funds raised €2.3bn from January to March; what PitchBook analyst Navina Rajan calls “a soft start to the year where most closes sat in smaller brackets.”
Notoriously media-shy, LPs in attendance at the conference included Dutch public fund Invest-NL, British fund of funds VenCap and American fund of funds Cross Creek (a backer of Berlin-based VC Point Nine).
Some LPs think the current liquidity problems might get even worse. “DPI [distributed to paid-in capital, a measure of money returned to LPs] is just a growing problem,” the head of a US-based fund of funds said onstage. “It surprises me when so many funds come and pitch that they want to convince everybody that we should look at TVPI and IRR [other measures of fund performance]. It’s not about not believing them or thinking their companies are doing great, it’s just a cash flow problem — and I think GPs right now just have to understand that.”
What LPs are looking for
Despite the challenges, investors weren’t all doom and gloom.
For some LPs, the increasingly tenuous geopolitical situation has given them even more conviction on backing European VCs: “Maybe the American electorate did the Europeans a big favour, because there’s nothing more uniting than a common enemy,” the US fund of funds head said. “We were looking to do more in Europe despite all the current geopolitical [upheaval] before,” and “it probably even encourages us more.”
Some investors believe the best GPs are generalists: “We have done sector funds in the past; it typically does not work out….If we think a sector is interesting, we are typically five years behind the curve,” one director of fundraising for a fund of funds said on a panel. “Go to a generalist and trust them that their approach, their DNA, is capable of finding the very best.”
But those like the US fund of funds head believe specialising in a sector is key to win cheques. “Venture has gotten very competitive, and we think you need an edge with the entrepreneurs.”
Some GPs seem to be leaning into that: at least three deeptech VCs have been out fundraising at the conference — including Amadeus Capital Partners and Dutch deeptech firm Forward.one.
Hot topics: defence, cyber and deeptech
GPs and LPs are all chattering about a couple of sectors right now: cybersecurity, dual use and defence tech — as well as, of course, AI.
The extent to which defence is seemingly an accepted topic now surprised me; if this conference was a year ago, I doubt it’d come up so often on unrelated panels. As I’ve written about recently, the growing geopolitical tensions have spurred a “vibe shift” towards defence since the start of the year — and that was certainly felt in the room.
But I’m curious to hear from you, VCs: what are your conversations with LPs like right now, and how are you navigating the fundraising environment? Is it harder or easier than last year? What sectors are you eyeing? I’m all ears.
#angst #Amsterdam #lot #uncertainty