Copyright Benzinga
After a two-year funding winter, venture capital in fintech is stirring again — but with a distinctly sober tone. At the Benzinga Fintech Day & Awards 2025 in a panel discussion, speakers Isabelle Phelps, partner at Lerer Hippeau; Matt Ober, managing partner at Social Leverage; and Mat Goldstein, chief strategy officer and co-founder at DealMaker, agreed that the exuberant "growth at all costs" era is giving way to a disciplined, fundamentals-first mindset. The focus now: disciplined founders, sustainable business models, and smarter capital strategies. Also Read: EXCLUSIVE: Private Markets For Retail Investors—More Than ‘Just OpenAI And SpaceX’ From Peak To Prudence Phelps noted that U.S. venture investment topped $300 billion in 2021 before plunging in 2022 and 2023. "So far this year, 40% of venture dollars in the US were invested in just 11 companies. And those are largely the big AI names," she said, pointing to rising concentration and froth even in early-stage funding. While valuations for top startups are again climbing, she emphasized that investors now expect founders to navigate both volatile fundraising conditions and a fast-changing tech landscape. Phelps added that her fund is spending more time, not less, getting to know founders, to better understand how they plan to navigate market frothiness or other conditions. Also Read: EXCLUSIVE: Prediction Markets Expert Says Surge ‘Gives Me Hope,’ ‘There’s An Appetite For Fun’ Retail Capital's Rising Clout DealMaker's Goldstein described a parallel revolution on the retail side. His firm helps brands raise funds directly from their fan customer base, "turning customers into shareholders." The model, he said, merges "a Shopify-like platform, a broker-dealer that raises capital, and a marketing agency," and has powered capital raises for clients such as the Green Bay Packers. "If they’re (customers) willing to buy your product, they're willing to buy your shares," he quipped. “We’ve seen a tremendous growth in retail capital raising over the past 10 years since the Jobs Act in 2012 really opened up Reg A (Regulation A) and Reg CF (Regulation Crowdfunding),” Goldstein added. Avoiding The AI Hype Cycle Ober of Social Leverage, an early investor in Robinhood Markets Inc (NASDAQ:HOOD) and eToro Group Ltd (NASDAQ:ETOR), cautioned against chasing sky-high AI valuations. "AI is a part of every story at this point…Those that are raising on a pure AI story trying to raise the most money at the highest valuations typically scare us away. We’re looking for founders that [are] a little bit more level set and moving a little bit slower." he said. His firm's typical investments are below $10 million, focusing on long-term viability rather than quick exits. The Next Decade: Tokenization And Liquidity Looking ahead, Ober and Goldstein see tokenization — the digitization of assets — as a long-term opportunity. Ober expects it to reshape wealth management, while Goldstein sees potential in creating secondary liquidity for private investors. "With private (firms) staying private longer, and with IPOs reducing its breadth.. I do think the capital markets need a solution that provides liquidity for private firms" he said. Read Next: Government To Reopen After Historic Shutdown: Federal Services ETFs Mixed As Investors Await Spending Clarity Photo courtesy of Corynn Egreczky.
