Business & Legal Developments | October 2025
Friends,
In last month’s newsletter, we explored how emerging venture capital (VC) managers are grappling with fundraising hurdles for second funds and how artificial intelligence-driven (AI) rollup strategies are challenging the boundaries of traditional venture economics, signaling a broader shift in how firms build, fund, and scale in a changing market.
This month, we explore two forces reshaping venture capital’s risk-reward calculus: the unprecedented dominance of AI in VC deal flow and the long-awaited resurgence of the initial public offering (IPO) market.
In “Investors are plowing more money into AI startups than they have in any other hype cycle,” PitchBook data reveals that AI now accounts for a staggering 63.3% of VC dollars invested — far eclipsing previous “hype” cycles like crypto, fintech, and mobility tech. As mega-funds crowd into earlier-stage deals to maintain exposure, emerging managers are increasingly boxed out, even at the seed level. The result is a venture landscape where capital is concentrated, competition is fierce, and sustainability is uncertain.
In “IPOs and (some) VC liquidity finally arrived in Q3,” the resurgence of public listings offered a timely path to liquidity for venture firms and their limited partners (LPs). Thirteen U.S. IPOs generated $36.4 billion in exit value — a 2,861% year-over-year increase — driven in part by secondary sales from longtime shareholders. While some IPOs focused on raising fresh capital, others prioritized cashing out early investors. This shift reflects a practical urgency of how VCs are recycling capital to satisfy LPs and prepare for future fundraising. As lockups expire and market volatility looms, the balance between short-term liquidity and long-term upside will define the next chapter of venture-backed exits.
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.
Upcoming Events
TED AI | October 21–22, 2025
Foley is proud to once again support TED AI San Francisco as it returns for its third annual conference this October. Held at the historic Ferry Building, this year’s event is themed “Are we bold enough?” — a powerful theme that invites attendees to explore the future of artificial intelligence and its sweeping impact on industries, institutions, and society. As a long-standing partner of TED AI, Foley is excited to help foster meaningful conversations and bold ideas at one of the most influential gatherings in the AI space.
The conference will feature a full day of dynamic panels and interactive sessions led by trailblazers from organizations such as Emerald AI, Niantic Spatial Inc., Oracle, PwC, SambaNova, Vectara, and Xero. Topics will span critical areas including AI in health care and life sciences, global AI governance, agentic AI, compute and sustainability, and workforce transformation. Foley’s own thought leaders will contribute to the dialogue: Louis Lehot will moderate a panel on funding the next wave of AI startups, Natasha Allen will lead a discussion on governing AI in a global context, and Nikhil Pradhan will speak on efficient AI and sustainability in compute and chip design.
To close out the day, attendees are invited to a cocktail reception where entrepreneurs, academics, and business leaders can connect and continue the conversation in a relaxed, social setting. Whether you’re deeply embedded in the AI ecosystem or simply curious about its future, TED AI San Francisco 2025 offers a unique opportunity to engage with visionary thinkers and explore the bold possibilities ahead.
IPO Summit — Silicon Valley Edition | October 8, 2025
The IPO Summit — Silicon Valley Edition, hosted by Sidebar Summit, offers an exclusive rooftop gathering aimed at bringing together technology leaders, investors, and entrepreneurs for strategic conversations around innovation and the public markets. The summit will offer a unique opportunity to hear directly from industry trailblazers, including a former founding leader of Facebook, a top NBA super agent, and leading venture capitalists from premier firms. Among the distinguished speakers is Louis Lehot, who brings deep expertise in venture capital, mergers and acquisitions (M&A), and IPO strategy. Attendees will enjoy fireside chats, a dynamic panel discussion featuring leaders from finance, technology, law, and government, and focused networking — all set against the stunning backdrop of the Bay Area skyline.
Spotlight on Silicon Valley General Counsel Lunch
General Counsel Lunch | September 26, 2025
Foley recently hosted an exclusive roundtable discussion: “IPO Readiness — What it Really Takes in Today’s Environment.” The intimate gathering brought together a select group of General Counsel for meaningful conversations over great food, focused on navigating the real challenges and decisions surrounding IPOs.
Here, our Foley team shared insights drawn from decades of experience advising companies through IPOs, follow-on offerings, 144A transactions, SPACs, debt raises, and post-IPO governance. The discussion offered practical perspectives and strategic guidance tailored to today’s dynamic market landscape.
Spotlight on Fueling the Next Wave: From First Raise to Secondaries and Exits
Fueling the Next Wave: From First Raise to Secondaries and Exits | September 17, 2025
Foley, in collaboration with Signals of TED AI San Francisco, recently welcomed nearly 100 founders, investors, and operators for an engaging evening focused on the future of AI-native companies. The event featured panels moderated by Foley partners Louis Lehot and Natasha Allen, offering attendees a deep dive into the full lifecycle of AI enterprises — from early-stage fundraising and product-market fit to strategic acquisitions and long-term growth. The conversations were candid and practical, reflecting the real-world challenges and opportunities facing startups in today’s rapidly evolving AI landscape.
Panelists shared insights on scaling teams, navigating regulatory frameworks, and building competitive strategies in an increasingly AI-driven economy. Founders gained valuable guidance on structuring early rounds, managing investor relationships, and planning for exits, while investors discussed how to provide meaningful support beyond capital — through mentorship, operational resources, and strategic introductions. The evening concluded with a vibrant networking session, where attendees connected over shared experiences and bold ideas, reinforcing Foley’s commitment to fostering innovation and collaboration in the AI ecosystem.
Spotlight on Investor-Focused HealthTech Panel Discussion & Reception
Investor-Focused HealthTech Panel Discussion & Reception | September 3, 2025
Foley was proud to co-host “Blueprint for a Unicorn: The Founders Playbook for Winning in Health AI” alongside the Ainsley Advisory Group, a dynamic panel discussion spotlighting the strategies and challenges shaping the future of health AI startups. Held in Foley’s Washington, D.C. office, the event brought together founders, investors, and industry leaders for a candid conversation on what it takes to build and scale a successful health AI company in today’s competitive landscape.
Panelists, which included Foley partners David Kantaros and David Sanders, shared actionable insights on laying a strong foundation, navigating regulatory and growth hurdles, and securing strategic funding. The discussion offered a rare behind-the-scenes look at the entrepreneurial journey in health AI, highlighting both the pitfalls and the potential for success. Foley is honored to support this important conversation and help foster innovation at the intersection of health care and technology.
Additional Recent Events
Second Annual Private Fund Managers Conference | September 25, 2025
Foley, in collaboration with Langham Hall and Optima Partners, hosted the Second Annual Private Fund Managers Conference, a premier event that brought together leaders from across the alternative investment and asset management space. Tailored for fund managers, institutional investors, and family offices, the exclusive gathering delved into the evolving regulatory landscape, emerging market trends, and strategic insights critical for long-term fund success. The evening ended with a networking reception, offering a valuable opportunity for professionals to connect and exchange ideas.
Women’s Venture Summit GP / LP Dinner | September 23, 2025
Foley co-hosted an intimate, invite-only dinner in partnership with the 12th Annual Women’s Venture Summit — a premier gathering that connects female founders and investors and has helped facilitate over $200 million in fundraising for women-led companies. The evening offered no formal agenda — just exceptional food, drinks, and meaningful conversation in a relaxed setting. The dinner was co-hosted by Asya Bradley of Stripe, alongside Foley partners Natasha Allen and Brandee Diamond. Overall, the night was a memorable celebration of community, collaboration, and the power of women-led innovation.
Dallas Happy Hour | September 11, 2025
Foley was proud to co-sponsor a happy hour hosted by Venture Dallas. The event brought together leading voices in the emerging company and venture capital space and offered a relaxed yet lively setting for meaningful conversations. Whether reconnecting with familiar colleagues or sparking new conversations, the night was a reminder of how valuable these gatherings can be for growing networks and exchanging ideas.
Thought Leadership
SEC Creates New Cross-Border Task Force to Combat Fraud, Prioritizing Investigations of Foreign Issuers and Gatekeepers
In early September 2025, the U.S. Securities and Exchange Commission (SEC) launched the Cross-Border Task Force to intensify its crackdown on international fraud targeting U.S. investors. Spearheaded by Enforcement Director Margaret A. Ryan and Chairman Paul Atkins, the initiative aims to investigate foreign-based companies and the gatekeepers who enable their access to U.S. capital markets. This move aligns with the longstanding SEC concerns over transnational misconduct and unreliable financial reporting by foreign private issuers. The Task Force will consolidate enforcement efforts and hold auditors, underwriters, and other intermediaries accountable, even when unaware of underlying fraud, as seen in cases like SEC v. Akazoo S.A.
SPAC 4.0: From Spectacular Failures to a Disciplined Renaissance
Under the banner of SPAC 4.0, the Special Purpose Acquisition Company market is undergoing a disciplined revival after years of speculative excess and high-profile failures. With reforms like longer deal timelines, performance-based sponsor incentives, and stricter SEC oversight, the new model aims to boost deal success rates to 40–50%. Past failures — such as Nikola, Lucid Motors, and WeWork — highlight the dangers of weak governance and premature public listings, while success stories like Grindr and SoFi show that SPACs can still thrive when fundamentals and transparency are prioritized. This article, written by Louis Lehot and Alexandre Turqueto, shares insights on how the SPAC structure has matured and what it takes to succeed in today’s more cautious environment.
Will the Next Patent Cliff Further Spur M&A Activity, and What Does That Mean for Companies Right Now?
As we approach 2026, industry leaders anticipate a surge in M&A activity, particularly in the pharmaceutical and biotech sectors, driven not just by market optimism but by a looming patent cliff that could put hundreds of billions in revenue at risk. With blockbuster drugs like Keytruda and Eliquis set to lose exclusivity, large pharmaceutical companies are expected to turn to acquisitions of smaller, innovative firms to offset losses and diversify their pipelines. This article, written by Louis Lehot, shares insights on how this cyclical event may catalyze a wave of strategic dealmaking, presenting unique opportunities for investors and innovators.
Health Care AI Funding Challenges: A Guide for Founders and Investors
As health care AI continues to promise transformative impact across diagnostics, treatment personalization, and clinical workflows, startups in this space face a uniquely complex path to funding and success. From navigating evolving regulatory frameworks and securing high-quality data to proving clinical value and establishing viable revenue models, the challenges are multifaceted. David Kantaros shares his insights on the strategic hurdles health care AI companies must overcome to attract investment, emphasizing the importance of regulatory planning, data partnerships, validation strategies, and multidisciplinary teams in building investor confidence and long-term value.
Kim v. FemtoMetrix: Delaware Chancery Court Highlights Gaps in Common Shareholder Agreement Provisions That Can Be Exploited to the Detriment of Minority Stockholders
The Delaware Court of Chancery’s decision in Kim v. FemtoMetrix reveals how amendments to voting agreements can be used to circumvent minority investor protections, particularly around board designation and removal rights. In this case, the company amended its voting agreement to introduce new eligibility criteria that disqualified a board designee, despite prior provisions requiring investor consent for removal. The court upheld the amendment, emphasizing that “equal application” does not mean “equal effect,” and that designation rights are not absolute. This article shares insights on how standard voting agreement language may leave minority investors vulnerable and offers practical lessons for drafting stronger protections.
IPO E-Book
Louis Lehot authors this e-book at a critical inflection point for the U.S. IPO market. After a quiet 2022–2023, IPO activity has surged in 2025 with 201 deals already priced, nearly matching last year’s total. Blockbuster listings like Circle, Chime, and CoreWeave have delivered strong returns, and anticipation is high for Databricks and Stripe, which could unlock the IPO window for dozens of unicorns. Key drivers include strong aftermarket performance, sector rotation into AI and fintech, and improved company readiness. With 40–60 IPOs expected in Q4, this guide offers practical insights, regulatory updates, and strategies for navigating the public markets.
Deals
Foley Represents Prellis Biologics in Strategic Collaboration with Eli Lilly to Advance Human Antibody Therapeutics
Foley & Lardner LLP served as legal counsel to Prellis Biologics, Inc., a biotechnology company innovating human antibody discovery through organoid and artificial intelligence enabled technology, in its multi-target drug discovery and development collaboration with Eli Lilly and Company (Lilly).
Foley Represents Summer Robotics in Series A Financing
Foley & Lardner LLP represented Summer Robotics, a pioneer in machine vision for vision-guided robotics, in its Series A financing. The round was led by Applied Ventures, LLC, the venture capital arm of Applied Materials, Inc., with participation from Solasta Ventures, Naver, and other investors.
Foley Advises Handgards in Acquisition of Albany Packaging
Foley & Lardner LLP served as legal advisor to Handgards, LLC, a leading distributor of foodservice products and Wynnchurch Capital portfolio company, in its acquisition of Albany Packaging USA.
Foley Represents Sun World International in Strategic Partnership with Pairwise to Develop Pitless Cherry
Foley & Lardner LLP is proud to have served as legal advisor to Sun World International, LLC in its strategic joint venture with Pairwise, an industry-leading pioneer in agricultural gene editing, to collaborate in the development of specialty fruit, beginning with the development of a high-quality pitless cherry.
Foley Represents SoundPatrol in Launch of AI-Enabled Anti-Piracy Research Lab to Protect Music for Artists and Labels
Foley & Lardner LLP represented AI startup SoundPatrol in the formation and financing of its music technology and AI-enabled anti-piracy research lab.
Foley Advises OCI Energy in Construction to Term Debt Financing for Major Texas Battery Project
Foley & Lardner LLP served as legal counsel to OCI Energy in the successful closing of construction to term financing for Project Alamo City, a flagship battery energy storage system currently under development in Bexar County, Texas.
Foley Represents Riverwood Capital as Lead Investor in $180M Funding for AppZen
Foley & Lardner LLP represented Riverwood Capital as lead investor in the $180 million growth funding round for AppZen, the leading agentic AI platform for finance teams.
Foley Represents Unico in Acquisition of OwnID
Foley & Lardner LLP represented Unico, Brazil’s leading IDtech company, in the acquisition of OwnID, a U.S.-based startup specializing in passwordless and passkey authentication.
Foley Advises CloserStill Media in Acquisition of Billington Cybersecurity
Foley & Lardner LLP served as legal advisor to CloserStill Media, the producer of market-leading business events, exhibitions, and conferences, in its acquisition of leading U.S. public sector cybersecurity conference and event organizer Billington Cybersecurity.
Foley Represents TDK Ventures as Investor in Series A Funding for Rodatherm Energy
Foley & Lardner LLP represented TDK Ventures as an investor in the $38 million Series A funding round for Rodatherm Energy Corporation, a Salt Lake City-based geothermal startup. Evok Innovations led the round and additional investors included Toyota Ventures, TechEnergy Ventures, MCJ, Active Impact Investors, Renewal Funds, Grantham Foundation, and Giga Investments. Rodatherm will use the proceeds to build its first pilot system in Utah.
Foley Represents Ume in $21M Series B Financing
Foley & Lardner LLP represented Ume, the fintech reshaping credit in Brazil, in their $21 million in Series B funding round led by Valor Capital Group and Bewater. Additional investors included PayPal Ventures, NFX, Globo Ventures, Canary, and BigBets.
Foley Advises Upling in Launch of AI-Powered Cannabis Genetics Tool
Foley & Lardner LLP served as intellectual property and transactional counsel to Upling, the high-speed medical cannabis delivery app, in the launch of a new strain recommendation tool powered by artificial intelligence.
Foley Represents Deutsche Bank in $200M Debt Facility for Catalyze
Foley & Lardner LLP represented Deutsche Bank AG, New York Branch, a leading global investment bank and financial services company, in connection with a $200 million debt facility provided to Catalyze, a national Independent Power Producer (IPP) and fully integrated developer of distributed renewable energy assets. Deutsche Bank Trust Company Americas served as agent.
Foley Represents Kapital in Funding Round, Creating Mexico’s Newest Fintech Unicorn
Foley & Lardner LLP recently represented Mexican commercial fintech firm Kapital in its funding round led by Tribe Capital and Pelion Ventures. Additional investors included Cervin Ventures, YC, Marbruck Ventures, and True Arrow. With this latest funding, Kapital has achieved “unicorn” status as its valuation topped $1.3 billion.
Additional Articles of Interest
Louis Lehot Publishes on Government Shutdown Risks for Companies Eyeing IPO
The Incentive Landscape: Leveraging Public Incentives for Industrial Expansion
Made in America: End-to-End Guide to Developing Your U.S. Manufacturing Footprint Introduction
Authors
Louis Lehot
Partner, Venture Capital
Silicon Valley | San Francisco | Los Angeles
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