Topic: Venture Capital

Today we analyze the complex landscape of the 2025 M&A market, which reveals a stark contrast between massive AI headlines and the reality for most startups. While high-profile acquisitions like Google’s $32 billion acquisition of Wiz suggest a recovery, our data indicates that confirmed high-return exits have drastically collapsed. We observe that only 7% of disclosed deals now return 3x or more to venture capitalists, a significant drop from 22% in 2021. Furthermore, 90% of all current M&A transactions remain undisclosed, suggesting a trend toward "soft landings" or acquihires that fail to meet previous valuation benchmarks. For developers and founders, this structural shift means the path to a lucrative exit has become much narrower. We believe the current environment prioritizes massive AI infrastructure plays while the broader middle market remains suppressed, making the 1-in-14 high-return ratio the new baseline for strategic exits in the current venture cycle.

We delve into the first completed three-year cycle of the AI wave, marked by the significant IPO milestones of Zhipu and MiniMax. By reflecting on early investment decisions with Zhang Jinjian, we examine the evolution of cognitive frameworks, shifting from pure belief to a nuanced understanding of large models and embodied AI as converging paths to AGI. We highlight the critical 'long action, short thinking' asset strategy and the rising importance of 'subjectivity' for founders in an increasingly noisy market. For the tech community, this discussion provides vital context on the three stages of embodied AI development and an optimistic outlook for the Chinese market in 2026. Today we focus on how individual agency and 'vitality' remain the core drivers of innovation as we transition into the next era of technological advancement.

Today we are reflecting on the massive shifts in the B2B landscape throughout 2025, observing that the traditional T3D2 growth model is being shattered by AI startups scaling to $100 million ARR in under 18 months. We’ve witnessed the evolution of AI agents from experimental tools to core business drivers, fueled by models like Claude 4.5 and platforms like Replit, which have democratized "vibe coding" for builders. Our findings emphasize that "Co-pilots" largely failed to deliver sufficient ROI this year, while products like Gamma and Cursor proved that massive budgets exist for tools offering instant, high-value outcomes. We strongly advocate for founders to remain at the helm during this era of rapid technological change, as 2026 is poised to be the year where AI agents fundamentally redefine enterprise software functions. Growth is no longer about just adding AI features but tapping into genuine AI tailwinds that accelerate enterprise spending beyond historical norms.