Business & Legal Developments | May 2025

11 min readMay 7, 2025

Friends,

In last month’s newsletter, we discussed the potential impact of newly announced U.S. tariffs on the venture capital (VC) landscape and explored how rising costs and new tariffs could pressure startups, particularly those in the technology sector, and slow demand later in 2025.

This month, we continue to focus on the growing impact of market uncertainty caused by new tariffs on the venture capital ecosystem and the continued rise of venture capital investment into artificial intelligence (AI) startups.

The global trade tensions, fueled by new tariffs, are increasingly affecting liquidity options for growth-stage startups. As equity financing becomes more expensive and IPO timelines extend, more companies are turning to venture debt as an alternative. According to recent reporting, the venture debt market is experiencing unprecedented activity, with lenders noting a sharp uptick in demand as startups seek ways to preserve their valuations and navigate the uncertain capital markets.

Meanwhile, AI continues to dominate global venture investing. In the first quarter of 2025, nearly 58% of all VC dollars were deployed into AI and machine learning companies, reflecting both the extraordinary pace of technological development and the pervasive fear of missing out among investors. While this influx of capital has fueled rapid innovation, it has also raised concerns about sustainability and long-term returns, with some industry leaders warning that unchecked enthusiasm may lead to uneven outcomes.

As always, do not hesitate to contact us if we can help you think through the impact of the trade wars on your business, brainstorm a legal or business challenge you are facing, or connect you to a potential investor, professional, or entrepreneur.

Spotlight on Our Brazilian Breakfast

Palo Alto Breakfast and Panel Discussion | April 23, 2025
Foley, in collaboration with entrypoint and CrewAI, recently hosted a high-energy breakfast event in Palo Alto, CA, bringing together venture capital and tech leaders for a dynamic morning of discussion and connection. Foley’s André Thiollier welcomed attendees and kicked off the program. With strong coffee and even stronger insights, Paulo Braga and João Moura led a thoughtful panel conversation exploring the growing presence and impact of the Brazilian tech ecosystem in Silicon Valley. The event offered valuable perspectives on cross-border innovation, emerging market trends, and the entrepreneurial momentum coming out of Brazil.

Events

Upcoming:

Securities Enforcement Forum West 2025 | May 15, 2025
The Securities Enforcement Forum West is a unique, one-day conference that brings together hundreds of current and former senior SEC officials, securities enforcement and white-collar attorneys, in-house counsel and compliance executives, and other top professionals in the field. This year’s conference will be held in person on Thursday, May 15, 2025, at the Waldorf Astoria Beverly Hills and will also be available for attendees to view live online.

Recent:

General Counsel Roundtable Luncheon on Tariffs, Supply Chain, and National Security Policy | May 2, 2025
Foley recently hosted a luncheon for General Counsels of late-stage and public companies, featuring a panel discussion on U.S. tariffs and international trade enforcement. Moderated by Louis Lehot, the panel included Christopher Swift, Penny Herscher, and Kirti Jadeja, who shared insights on tariff risk, supply chain integrity, and contract exposure.

Foley RSA Dinner with Stripe | May 1, 2025
Foley recently hosted a dinner for cybersecurity founders, navigating product-led growth, go-to-market, and early-stage fundraising. Foley also brought a curated group of cybersecurity investors for an intimate evening of conversation, community, and connection. Guests shared takeaways from the recently completed RSA Conference and candid insights, tactical advice, and hard-won lessons from seasoned investors and high-growth founders.

Tariff Blitz Webinar | April 30, 2025
Foley’s International Trade and Supply Chain teams hosted a three-part “Tariff Blitz” webinar addressing the Trump administration’s rapidly evolving tariff policies. Greg Husisian, Vanessa Miller, Kate Wegrzyn, John Turlais, and Katie Schoettler provided timely updates on the status of the new tariffs, strategies for lobbying and managing contract risks, and best practices for navigating heightened customs compliance challenges. Attendees gained actionable insights into mitigating risk and adapting their operations in the new high-tariff environment.

LatAm Tech Forum | April 25, 2025
Foley proudly served as the platinum headlining sponsor of our client Riverwood Capital’s LatAm Tech Forum in Miami, Florida, bringing together Latin America’s leading entrepreneurs, investors, and companies to build out the innovation landscape. We were honored to meet and hear from these inspiring leaders as they planned the future of Latin American innovation. Joshua Ehrenfeld, Louis Lehot, Marco Najera Martinez, and André Thiollier attended and valued the opportunity to connect with participants throughout the event.

Capital Connect: Rising Above the Noise | April 24, 2025
Foley, CollectiveMinds, and HSBC Innovation Banking hosted Capital Connect in Silicon Valley, where attendees explored the dynamic landscape of the biopharma industry. This year’s event featured a panel discussion on investment trends beyond mega-deals, strategies for rising above the noise, and the challenges and opportunities facing both biopharma CEOs and investors. Foley’s Antoinette Konski and Nicholas O’Keefe were among the panelists sharing valuable insights, and the discussion also covered the pre-seed and seed markets, offering attendees fresh perspectives and key networking opportunities.

AI and the Future of Business: An Intimate Roundtable Dinner | April 10, 2025
Foley’s Natasha Allen and Jeanette Barzelay hosted an intimate, thought-provoking roundtable dinner to dive into the real-world implications of AI across industries. Guests engaged in candid discussions about how AI is transforming industries, reshaping business strategies, redefining workforces, and unlocking new opportunities. The evening provided a unique opportunity to exchange ideas, gain fresh insights, and discuss how leaders can harness the power of AI while navigating its challenges.

Founder & Funders Poker Tournament | April 10, 2025
In partnership with Silverside.AI and Hackers & Backers, Foley hosted an exclusive evening of high-stakes strategy and high-value connections at our Founders & Funders Poker Tournament. This invite-only event brought together top investors and visionary founders for a night of friendly competition, great conversations, and the opportunity to forge lasting relationships over a hand of poker. Guests enjoyed delicious food and refreshments while sharpening their skills, testing their luck, and building new connections within the community.

General Counsel Roundtable Luncheon on State Incorporation | April 4, 2025
Foley hosted a luncheon designed exclusively for General Counsels of late-stage and public companies to discuss developments in Delaware, Nevada, and Texas state laws, as well as recent court cases that are driving companies to consider big moves in 2025. Chris Converse and Chris Babcock from our Texas offices led an informative discussion on Texas’s response to recent Delaware case law and the growing appeal of incorporating in Texas. Our Silicon Valley partners Nick O’Keefe and Brian Wheeler, along with Louis Lehot, presented Delaware’s counter response to what some have coined “DExit.” General counsels also shared concerns about stakeholder response, shareholder engagement, and how to run an effective decision-making process for their companies.

Thought Leadership

The Dealmaking Slowdown: A Time for Startups to Prepare
As the slowdown in dealmaking continues, both buyers and sellers are left to consider their options moving forward during this period of extreme uncertainty and market volatility. To put the current slowdown in perspective, EY had previously forecasted M&A activity to rise by 10% this year. However, they recently adjusted that outlook, saying the M&A market entered a “watchful phase” in February of this year. Their data shows a downturn in the number and total value of deals of more than US$100 million. The volume of those deals dropped by 5.9% year-over-year (YoY) and 19.5% from just January of this year, and combined deal value also fell 53% YoY and 34% from January.
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Latest FCA Cybersecurity Settlement Shows Enforcement Remains a Priority Under Trump Administration
A recent United States Department of Justice (DOJ) announcement reinforces that enforcement of cybersecurity requirements under the False Claims Act (FCA) remains an ongoing risk. According to the press release, defense contractor MORSECORP Inc. (MORSE) agreed to pay US$4.6 million to resolve an FCA matter arising from a qui tam relator’s suit alleging that MORSE failed to comply with certain U.S. Department of Defense (DOD) cybersecurity requirements. This is the most recent settlement involving DOJ cybersecurity enforcement.
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An Updated Outlook for Private Equity in 2025
This year is off to a bumpy start in terms of dealmaking. A multitude of factors, including tariff-a-geddon, supply chain disruption, stubbornly high long-term interest rates (not coming down as expected), deregulation (not yet commenced, much less bearing any fruit), and an increasingly volatile stock market, have together summarized in the now ubiquitous term “market uncertainty” and have slowed the pace of dealmaking significantly. The impact of market uncertainty has been especially pronounced in the Private Equity (PE) space. In this context, PitchBook analysts have revised their outlook for the PE landscape for the balance of 2025.
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Delaware Enacts Significant Changes to Delaware General Corporation Law
As discussed in Foley’s Corporate Governance Update last month, SB 21: Delaware Responds In The DExit Battle, the Delaware legislature has been moving quickly to ensure that Delaware remains the preeminent home of choice for many corporations by amending the Delaware General Corporation Law (DGCL). The comprehensive changes, known as SB 21, became law on March 25, 2025, when the Delaware House of Representatives passed the Bill, and Delaware Governor Matt Meyer signed it into law.
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What Every Multinational Company Should Know About…Tariff Strategies for Sell-Side Contracts
With the size and scope of President Trump’s tariffs continuing to shift, this is a critical time for businesses to assess their contracts and determine how increased tariff costs might adversely affect profitability and whether there are any strategies to mitigate the losses.
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Deals

Foley Represents cQuant.io in Acquisition by Zema Global
Foley & Lardner LLP represented cQuant.io, an industry leader in analytic solutions for energy and commodity companies, in its acquisition by Zema Global, a leading provider of data management and analytics solutions for companies in the energy, commodities, and financial sectors. The acquisition, supported by Zema Global’s existing investor FTV Capital, will result in cQuant.io operating as a subsidiary branded as “A Zema Global Company.”

Foley Advises Tidemark in Growth Equity Investment in Onfly
Foley & Lardner LLP represented Tidemark in its growth equity investment in Onfly, a Brazilian travel technology company providing an end-to-end corporate travel and expense management software platform. Onfly’s platform integrates corporate travel and expense management tools, helping businesses gain better visibility into travel spending, reduce fraud, and ensure closer adherence to corporate policies. The platform replaces traditional travel management company services with a modern, self-service booking solution that leverages both proprietary supply and available inventory to deliver cost savings to corporate clients.

Foley Represents BICO in Sale of MatTek and Visikol to Sartorius for $80M
Foley & Lardner LLP represented BICO Group AB (“BICO”) in its agreement to sell MatTek Corp and Visikol Inc to Sartorius Lab Holding GmbH (“Sartorius”) for US$80 million. The transaction follows BICO’s updated strategy to focus on lab automation and selected workflows, with proceeds from the sale used to strengthen BICO’s balance sheet and accelerate its growth agenda. The transaction is expected to close in Q2 2025. MatTek is a market-leading provider of 3D microtissue models and primary cells for in-vitro testing, offering faster, more cost-efficient, and reproducible alternatives to animal testing. Visikol specializes in advanced imaging and digital pathology.

Foley Advises SchoolAI in $25M Series A Funding
Foley & Lardner LLP served as legal advisor to SchoolAI, a leading artificial intelligence platform for teaching and learning, in its US$25 million Series A funding led by global venture capital firm Insight Partners. SchoolAI is a leading AI platform transforming teaching and learning across K-12 and higher education. Used by teachers and students in more than one million classrooms across all 50 U.S. states and over 80 countries worldwide, SchoolAI provides powerful AI tools that help teachers understand and support each student’s unique needs. The platform combines adaptive AI tutors, interactive games, and customized lessons that adapt to individual learning styles, while giving educators real-time insights and reducing administrative workload. SchoolAI is leading responsible AI adoption in education by partnering directly with districts to ensure safe, effective implementation that enhances rather than replaces quality instruction.

Foley Represents Canopy in $70M Series C Financing to Accelerate AI Innovation
Foley & Lardner LLP represented Canopy, a firmwide operating system for accounting firms, in its $70 million Series C funding round. The round was led by Viking Global Investors, with continued participation from existing investors Ten Coves Capital, Ankona Capital, Pelion Venture Partners, and Tenaya Capital.

Foley Serves as Legal Advisor to NexTalk in Acquisition by Private Equity Firm
Foley & Lardner LLP represented NexTalk, an industry leader in communications solutions for the Deaf, hard of hearing, and non-English speaking communities, in its acquisition by a private equity firm.
The transaction provides NexTalk with access to additional financial resources and business expertise that will enable continued growth and development of its portfolio of innovative B2B SaaS contact center solutions and related communications services.

Foley Advises Mobico Group on $608M Sale of North America School Bus Business
Foley & Lardner LLP represented Mobico Group PLC in the proposed sale of its North America School Bus business to I Squared Capital, a leading global infrastructure investment manager for an enterprise value of up to $608 million. The transaction, which is expected to close in the third quarter of 2025, is part of Mobico’s strategy to strengthen its balance sheet and reallocate capital toward higher-growth opportunities, particularly in ALSA. The expected upfront net proceeds of approximately $365–385 million will be used to accelerate debt reduction, with potential additional earn-out payments of up to $70 million tied to future performance.

Foley Represents Envisioning Partners as Co-Lead Investor in Series B Round for Phoenix Tailings
Foley & Lardner LLP represented Envisioning Partners as co-lead investor in the $33 million Series B extension funding for Phoenix Tailings, a Burlington, Massachusetts, developer of rare earths from mining waste, for a total funding of $76 million. In addition to Envisioning Partners, who led the initial closing, the second round was anchored by Escape Velocity with support from Builders Vision, Yamaha Motor Ventures, MPower, Sumitomo Corporation, and other key investors.

Foley Represents NEA as Lead Investor in $200M Series C Round for Abcuro
Foley & Lardner LLP represented New Enterprise Associates (NEA) as the lead investor in the $200 million Series C financing for Abcuro, a clinical-stage biotechnology company. NEA was joined by additional investors Foresite Capital, RA Capital Management, Bain Capital Life Sciences, Redmile Group, Samsara BioCapital, Sanofi Ventures, Pontifax, Mass General Brigham Ventures, New Leaf Ventures, funds managed by abrdn Inc., and funds and accounts managed by BlackRock, Eurofarma Ventures, and Soleus Capital.