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Trump’s Bill Was Big, but Is It Beautiful for VC?
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By Brian Gormley, WSJ Pro
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Good day. President Trump’s One Big Beautiful Bill is now law. We would like to hear from you: How will it affect venture capital and startups? Please email responses to vcnews@wsj.com.
Recently, we cited a Deloitte report that examined a longstanding question: Which firm and fund strategy is more effective, specialist or generalist? The report noted a trend toward “nested” strategies, in which generalists embed specialist teams to capture the best of each model. We asked, what do you think of the generalist vs. specialist question in today’s market? Here are some of your responses, edited for clarity and length.
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Shahin Farshchi, partner with Lux Capital: “Most ‘artificial intelligence’ companies are simply software companies, and generalist firms are already pretty well-equipped to underwrite them using the metrics they use to fund other software companies. Few AI companies are pushing the state of the art, and those fall under ‘deep tech’ where there will be no metrics to underwrite for years and investors need to be equipped to understand the tech, have the patience to wait until a business takes shape and have access to the special talent needed to solve all of the hard problems along the way. Generalist funds can't do this by hiring a few people, it needs to be in their DNA. This means successful deep-tech investing requires firms composed of tight-knit groups of specialists who have experience both building and funding such companies from their
earliest stages.”
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Nicolas Sauvage, president of TDK Ventures: “In my firm, we invest with a thesis-driven approach in deep tech, which demands people who can go deep across many domains. I’ve found that highly technical and innately curious individuals, often with Ph.D.s, excel here. Their training fosters conviction from first principles, peer review resilience and the clarity to persuade an investment committee. We welcome non-Ph.Ds., yet we seek that same rigor. Rather than balancing generalists and specialists, we aim to build a team of agile specialists—each able to dive deep, adapt fast and think across boundaries.”
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Nicole LeBlanc, partner at Toyota’s growth fund, Woven Capital: “CVCs [corporate venture capitalists] are the ultimate specialists—not by constraint, but by design. Our edge lies in knowing a market deeply: Where the bottlenecks are, who the incumbents trust and how a new solution actually scales. When new technologies like AI gather crazy momentum, generalist funds often look at a broad application set, but specialists like us ask: Where does this actually create value in mobility, energy, logistics? That discipline matters more than ever in today's fast-paced environment.”
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Oliver Libby, managing partner of H/L Ventures: “As a longstanding practitioner of the ‘nested’ model, where we have virtual specialist teams for the industries that we find interesting and where we have more deal flow, we think this is going to be a growing business model in VC. That said, even this nested model benefits from syndication and participation with true vertically specialized firms, bringing the VC world back to a more collaborative approach that has waned in recent years. Ultimately, though, the nested approach requires a lot of effort and expense, and is not something that most small to midsize firms can likely do well.”
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And now on to the news...
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President Donald Trump shows his signature after signing his “Big Beautiful Bill” on July 4. PHOTO: BONNIE CASH–POOL VIA CNP/ZUMA PRESS
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PE avoids tax hits. The Republicans’ huge tax-and-policy bill mostly left private equity alone, and the industry is just fine with that, WSJ Pro reports. Private-equity lobbyists spent more than a year in behind-the-scenes negotiations for the One Big Beautiful Bill Act that President Trump signed into law July 4. The industry mobilized to defend its most valuable tax provision—the controversial carried-interest rate on capital gains—from Trump’s threats to eliminate it, and to make sure it didn’t suffer unexpected losses in the Republicans’ sweeping overhaul of the tax code. In the end, none of the industry’s fears came to pass.
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$94.6 Billion
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Global venture funding in the second quarter, according to CB Insights. It was the third straight quarter to surpass $90 billion.
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Pentagon to Take Stake in Rare-Earth Company
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The Pentagon is making a big investment in rare-earth magnets, striking an unusual deal with a private-sector company aimed at undercutting China’s dominance, The Wall Street Journal reports. MP Materials, America’s largest rare-earths miner, said Thursday it has reached a deal under which the Defense Department will take a 15% stake in the company. The government is committing to spending billions of dollars investing in MP Materials and purchasing its output. The company’s shares surged around 50% after the deal was announced.
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Bitcoin’s Path to a New All-Time High
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Bitcoin hit a new all-time high on Thursday, alongside the Nasdaq Composite and tech giant Nvidia. After President Trump’s election victory in November, bitcoin soared and surpassed $100,000 for the first time. But its progress stalled in the following months, while tariff-fueled volatility shook markets and investors waited for Washington to deliver pro-crypto policies. The WSJ looked at some factors behind bitcoin’s rise—and risks that could derail it going forward.
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People
Celesta Capital elevated Matthew Marsh to general partner, while Robin Clewley has been appointed partner and will lead investor relations.
Uncork Capital has promoted Sarah Du to senior associate. Du joined Uncork in 2023, and was previously at Bessemer Venture Partners, Pear VC and Sierra Ventures.
Exits
Amplitude, a public digital analytics company, has acquired Kraftful, a San Francisco-based AI voice audio startup. Kraftful is backed by investors including Y Combinator, Google and Samsung.
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Exein, an embedded IoT cybersecurity provider, landed €70 million in Series C funding led by Balderton. The company has offices in Rome, San Francisco and Germany.
RealSense, a San Francisco-based AI-powered computer vision startup, has spun out from Intel with a $50 million Series A round from investors including Intel Capital.
Arago, a Paris- and Silicon Valley-based deeptech startup developing an energy-efficient AI chip powered by light, raised $26 million in seed funding. The round was co-led by Earlybird, Protagonist and Visionaries Tomorrow.
Parspec, a San Mateo, Calif.-based AI-native software platform, raised $20 million in Series A funding led by Threshold Ventures. The company aims to streamline the B2B procurement process for construction materials.
Welli, a Colombia-based healthcare fintech company enabling patients to finance treatments directly from a doctor's office or clinic, secured $8 million in Series A funding led by Costanoa Ventures. In total, Welli has raised more than $25 million between capital and debt.
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Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.
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The private-equity industry has almost all the pieces in place to start managing Americans’ 401(k) money—everything but the customers.
A failed GOP effort to block a jumble of state AI privacy and security laws has developers calling for “consistent standards.”
It’s never been easier to create your own app with “vibe coding.” Now, professional software engineers are bringing it into the enterprise.
Some creators say their work has been wrongly tagged as AI on tech platforms, hurting their reputation, while some all-artificial ads get through undisclosed.
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Grok’s defiant leanings have caused problems this year. PHOTO: DAVID TALUKDAR/ZUMA PRESS
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