The startup bubble that no one is talking about

August 28, 2025

Figure 1

Above is a graph that displays the amount of Form Ds filed, where the entity (read: company/firm) name contains the phrases "fund I", "fund II", "fund III", and "fund IV". The x-axis is not the prettiest, but it is broken down by quarter. You can see that the line for "fund I" sees by far the greatest peak around quarter 3 of 2022, with a steep drop off immediately after. The other lines have a similar, but less pronounced trend.

So, what is the significance of this? Companies and firms file Form Ds in compliance with Regulation D, which requires disclosure when raising funds under specific circumstances. I won't go into the details here, but the TLDR is that it isn't always required, but it's not uncommon either. Another piece of context is that venture capital firms (among other financial investment groups) label their individual funds, often by appending Fund [] to describe where the fund falls in their sequence of funds. Here is a search query on the SEC filings database. You can see how the naming convention works. Each fund often constitutes its own entity. My hypothesis here is that, by charting the amount of Form Ds filed with "fund [#]" in the name, we can roughly see the state of venture capital “fund” raising.

My Takeaways

1. From this graph we can roughly see the ratio of venture firms that make it to a given fund cycle. That's a little hard to claim as the funds get higher in number, because once firms get large enough, they often stop creating sequential funds, instead raising in parallel and creating funds targeting specific industries/products etc. If you are planning to start a venture firm though, you may gain a bit of insight into your odds of longevity.

2. Venture funding is about to drop off BIG time.

During the early 2020s, everyone and their mom raised a VC fund. This is due to several factors

The zero interest rate phenomenon . Because rates were so low, endowments, pensions, high networth individuals, and other institutional investors were looking for ways to deploy capital. VC was a compelling way to do that. It was easier than ever to start a venture firm. Another interesting graph is my estimation of the amount of Form Ds filed by “SPV as a service” companies, such as Angellist or Sydecar . These companies handle the back office administration for groups raising funds to invest in startups. If your firm isn’t big enough to hire its own staff, you can handle tasks like fund incorporation, and wire coordination through these groups. An abundance of LPs in tandem with these new companies meant that you only needed one or two well presenting individuals to raise a venture fund. In the graph below you can see that Form Ds filed by these groups also peaked around late 2021/2022.

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