Business & Legal Developments

8 min readFeb 16, 2025

Friends,

In last month’s newsletter, we explored the shifting dynamics in venture capital, focusing on the resilience of early-stage startup valuations and the growth of artificial intelligence (AI) and fintech sectors.

This month, we dive deeper into two pivotal trends shaping the venture capital landscape heading into 2025: the surge in AI-driven investments and the growing role of corporate venture capital in larger funding rounds.

Artificial intelligence continues to capture the lion’s share of venture capital funding, with AI startups accounting for 22% of all first-time venture capital financing in 2024. PitchBook’s recent data highlights a $7 billion spike in first-time funding for AI and machine learning startups through Q3 2024 alone. While AI’s popularity shows no signs of slowing down, this rapid growth has raised concerns over inflated valuations and buzzword-driven investments. Investors face the challenge of distinguishing truly transformative AI startups from those capitalizing on the AI trend without delivering substantial innovation. Notably, the sector is seeing an uptick in AI-driven solutions for healthcare, fintech, and pharmaceutical industries, with the potential to disrupt entire verticals. As we enter 2025, how these trends evolve will be critical for stakeholders to navigate. Already, the announcement by “made in China” AI hyperscaler DeepSeek of a new v3 inference model — at purportedly bare bones cost — with minimal compute power required — is upending expected notions of what is possible, and ushering in a whole new arms race in the space.

The rise of corporate venture capital (CVC) continued unabated in 2024, with all systems flashing GO. The median U.S. venture deal with CVC participation reached $13 million, more than three times that of the rest of the market. This increase is largely attributed to CVC’s growing preference for late-stage investments, especially in high-growth sectors like AI and life sciences. Despite a larger appetite for bigger funding rounds, CVCs continue to shy away from acquisitions, with less than four percent of CVC-backed companies being acquired by their corporate backers. A rare example of a CVC acquiring a portfolio company was Salesforce’s $1.9 billion acquisition of Own, a cloud data protection provider. As CVCs double down on AI investments, they are also strategically positioning themselves for future growth in these transformative industries.

Looking ahead, the venture capital ecosystem remains dynamic, with innovation, strategic investments, and corporate partnerships paving the way for 2025. Stakeholders should continue to stay agile and informed, ready to capitalize on opportunities in AI and other high-growth sectors.

As always, do not hesitate to contact us if we can help you brainstorm a legal or business challenge you are facing or connect you to a potential investor, professional, or entrepreneur.

Spotlight on Women in Venture Capital

Kauffman Fellow GP/LP Networking Reception | February 4, 2025
Foley had the privilege of co-hosting the invite-only Kauffman Fellows GP/LP networking event in Half Moon Bay, kicking off the Women in VC conference. Held at the Ritz Carlton’s golf club, the gathering brought together top investors for high-impact networking and insights. The evening featured a fireside chat with select Kauffman Fellow GPs, highlighting trends in venture capital and the network’s impressive track record — outperforming the industry with a 5.8x average realized multiple. Co-hosted by Foley and Jennifer Vancini of Mighty Capital, the event strengthened key relationships that are shaping the future of venture investing.

Events

Upcoming:

ViVE Conference Cocktail Reception | February 17, 2025
We are thrilled to invite you to an exclusive Happy Hour event Foley is cohosting alongside J.P. Morgan and Longitude Capital during the ViVE Digital Health Conference in Nashville, Tennessee. The evening will provide the opportunity to network with leaders in the Digital Health industry, including founders, investors, and industry peers, while enjoying the vibrant sounds of downtown Nashville and a selection of exquisite cocktails and appetizers. Do not miss this opportunity to elevate your connections and gain insights into the future of healthcare technology.

Recent:

Founders & Funders Truffle Making | February 11, 2025
Attendees enjoyed a sweet evening of networking and chocolate at the Founders & Funders Truffle Making event. Just in time for Valentine’s Day, it was a chance to mingle with fellow entrepreneurs and investors while indulging in the art of truffle-making. After the Truffle Making Class at the Dandelion Chocolate 16th Street Factory in San Francisco, everyone moved to their Paris-inspired Bloom Restaurant for more savory and sweet delights. The event proved to be a perfect blend of business and pleasure as participants got creative with chocolate, while building connections that could lead to their next big venture.

Antibody Drug Conjugates Keep Growing: What You Need to Know | January 28, 2025
Since 2018, there has been an exponential growth of over $60 billion in licensing deals involving Antibody Drug Conjugates (ADCs), with 2023 having at least 18 deals. ADCs worldwide are projected to reach $20–30 billion per year in the near future. Foley’s Health Care & Life Sciences and Innovative Technology sectors recently hosted a webinar on how organizations should navigate the crossroads of ADCs and how you can prepare for this evolving landscape.

Silicon Slopes Summit 2025 Networking Reception | January 16, 2025
As Foley continues to support the Silicon Slopes Summit, our Innovative Technology sector teamed up with Trustpoint.One, Silicon Valley Bank, Ampleo, and Tanner LLC to keep the conversation going after day four. This was an exclusive networking reception at Van Ryder, Salt Lake’s premier rooftop bar located at the Le Meridien Hotel in the heart of downtown.

Reception and CLE Luncheon during J.P. Morgan Healthcare Conference | January 8, 2024
Coinciding with the timing of the J.P. Morgan Healthcare Conference, Foley kicked off the festivities on Monday, January 8, 2024, with a wonderful evening shared with colleagues and entrepreneurs across Life Sciences. Guests enjoyed a great social space at the iconic Ferry Building, offering panoramic views of the Bay. The evening was co-hosted by Bioluminescence Ventures, Crosstree, Flagstar, and Slone Partners.

Thought Leadership

Game On: How the CFPB’s EFTA and Regulation E Changes Could Shape Video Game and Online Marketplace Transactions
The Electronic Fund Transfer Act (EFTA) and Regulation E apply to an electronic fund transfer (EFT) that authorizes a “financial institution” to debit or credit a consumer’s account. While a “financial institution” traditionally refers to a bank, credit union, or savings association, it is well established that “financial institutions” can also include non-bank entities that directly or indirectly hold an account belonging to a consumer, or that issue an access device and agree with a consumer to provide EFT services. Prepaid accounts and “other consumer asset accounts” into which funds can be deposited by or on behalf of the consumer and which have features of deposit or savings accounts, also meet Regulation E’s definition of “account.” Some video game accounts used to purchase virtual items from multiple game developers or players may fall under the definition of “other consumer asset accounts.” This article was authored by Whitney Nicholas, Davis Mosmeyer, Elizabeth Nevle, and Quinn D’lsa.

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Drilling Down into Venture Capital Financing in Artificial Intelligence
It should come as no surprise that venture capital (VC) investors are drilling down into startups building businesses with Artificial Intelligence (AI) at the core. New data from PitchBook actually shows that AI startups make up 22% of first-time VC financing. They note that $7 billion of first-time funding raised by startups in 2024 went to AI & machine learning (ML) startups (this is according to their data through Q3 of 2024). This article was authored by Natasha Allen and Louis Lehot.

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President Biden Issues Second Cybersecurity Executive Order
In light of recent cyberattacks targeting the federal government and United States supply chains, President Biden’s administration has released an Executive Order in an attempt to modernize and enhance the federal government’s cybersecurity posture, as well as introduce and expand upon new or existing requirements imposed on third-party suppliers to federal agencies. This article was authored by Christopher Swift, Jennifer Urban, Samuel Goldstick, and Lauren Hudon.

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2023 AI Executive Order Revoked
On January 20, 2025, President Donald Trump signed an executive order rescinding the 2023 directive issued by former President Joe Biden on artificial intelligence (AI). Biden’s order outlined extensive measures aimed at guiding the development and use of AI technologies, including the establishment of chief AI officers in major federal agencies and frameworks for tackling ethical and security risks. This revocation signals a major policy change, transitioning away from the federal oversight put in place by the previous administration. This article was authored by Aaron Tantleff and Chanley Howell.

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Is the Future of Digital Assets in the United States Bright Again?
Yes, indeed! What Brad Garlinghouse of Ripple Labs called “Gensler’s reign of terror” ended with Securities and Exchange Commission (SEC) Chair Gary Gensler’s resignation upon President Donald Trump’s inauguration. Paul Atkins, who has co-chaired the Token Alliance, spoke of the need for a “change of course” at the SEC and will be given charge of the SEC when he is confirmed as its new Chairman. This article was authored by Patrick Daugherty and Louis Lehot.

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Deals

Foley Represents TCGX and Omega Funds in $207.5M Series C Financing for Aviceda Therapeutics
Foley & Lardner LLP represented TCG Crossover (TCGX) and Omega Funds as lead investors in the $207.5 million Series C financing for Aviceda Therapeutics (Aviceda). Bernard Davitian of Omega Funds and Chen Yu, M.D., M.B.A., of TCGX have joined Aviceda’s Board of Directors. Additional investors in the funding round included Enavate Sciences, Jeito Capital, Blue Owl Healthcare Opportunities, Longitude Capital, OrbiMed, Logos Capital, Marshall Wace, Catalio Capital Management, funds managed by abrdn Inc., and Digitalis Ventures.

Foley Represents Samsung Venture Investment Corporation as Investor in $170M Late-Stage Funding Round for Space Technology Startup Loft Orbital
Foley & Lardner LLP represented Samsung Venture Investment Corporation (SVIC) as an investor in the $170 million late-stage funding round for Loft Orbital, a space technology company with plans to expand its fleet of satellites. Additional investors included Temasek, Tikehau Capital, and Axial Partners.

Foley Represents BosonQ Psi in Seed Financing Round
Foley & Lardner LLP represented BosonQ Psi, a pioneer in quantum-inspired simulation technology, in raising over $3 million in its seed financing round. The round was led by Monta Vista Capital and included Emergent Ventures, Armory Square Ventures, Alumni Ventures, and Paradigm Shift Capital joining the company’s many angel investors.

Foley Advises Nema Health in $14.5M Series A
Foley & Lardner LLP represented Nema Health, a multi-state digital health company focused on providing intensive, evidence-based treatment for post-traumatic stress disorder (PTSD), in its $14.5 million Series A funding led by Deerfield Management alongside CVS Health Ventures. Optum Ventures, .406 Ventures, and GreyMatter also participated.