#36 July 2025: On my way to steal your researcher!

Your monthly filter for economic data & insights that matter.

AuthorAuthor

Maria Heyen & Brett Calhoun
July 01, 2025

A Note From the Redbud VC Team

It’s June, and there is no summer slump! Markets are running on three clocks right now—billions (Meta’s $15B grab for Open AI talent and $100M signing bonuses), weeks (frontier models reign for 21 days before a new winner is crowned), and seconds (Kalshi’s AI-powered fever dream of a commercial). Layer on 22K tech layoffs YTD, a mere $23B raised by U.S. VC funds (decade low), T1 funds make up 10% of total funding rounds, and it’s clear that talent is cheaper, capital is scarcer, and speed is everything. Building at any of these speeds? Pitch us here 🏃🏼‍♀️

Redbud VC invests monetary ($100k-$150k) and social capital in early-stage tech founders. We bring monthly Redbud VC, tech, and economics updates. - We've filtered thousands of sources for our 15k readers, so you don't have to. Enjoy🥂

Zuck, along with every VC fund. Who wins?

Our take is that Pre-Seed is the last stage that hasn’t been commoditized. In some instances, it can be, but the process of finding talent early before they start raising and maybe even supporting/tracking for a few months is not. Mega funds inherently have lower return expectations and large swaths of capital to deploy; therefore, an expensive option at Pre-Seed or Seed is a drop in the bucket to write much bigger checks. This can create irrational expectations for early-stage valuations.

🔥 Burning question of the month 🔥

What is the most likely macro outcome of Robinhood's tokenized private stock product?

Login or Subscribe to participate in polls.

📈 Macro Trend Report  

  • AI | Generative-AI news is coming at three speeds now: billions, months, and seconds. On the “billions” tier, Meta has consolidated every machine-learning team into a new Superintelligence Labs and is prepared to offer $100M signing bonuses and recruit OpenAI researchers. Scale AI’s founder, Alexandr Wang has become Meta’s chief AI officer and bring a hand-picked cohort of elite researchers from OpenAI, an aggressive move by Mark Zuckerberg to regain ground after several high-profile departures and middling benchmark scores for Meta’s most recent Llama models. In other advancements, Google just launched an Offerwall inside Ad Manager that lets publishers swap pay-per-article fees, surveys, or extra ads whenever AI-generated answers siphon away search clicks. Then there’s the “seconds” layer. During Game 3 of the NBA Finals, Kalshi aired a 30-second ad stitched together almost entirely with Google’s Gemini and Veo: a farmer drifting in a pool of eggs, a beer-chugging alien, and a flag-draped fan shrieking about Indiana—the total production budget was $2k and some prompt engineering.

    • MODELS | A new report from Innovation Endeavors (Eric Schmidt’s venture fund) notes that 1 in 8 workers is already using AI each month, and 90% of that growth took place in the last six months, yet any given frontier model enjoys only a few weeks at the top before an open-source rival erodes its lead. Training costs are surging as capabilities double roughly every seven months, prompting giants to secure talent and GPU allotments while also scrambling to develop new business models.

  • JOBS | What started as a quick haircut in late 2022 has stretched into a three-year painful cut. TechCrunch counts more than 22,000 U.S. tech layoffs so far in 2025, Intel has shed a fifth of its workforce, Microsoft let 6,000 people go last week, and Meta just pared back Reality Labs yet again. Add in Amazon’s smaller cuts and the running total since 2023 now tops 175,000 roles across 600-plus companies. Headcounts that ballooned during the pandemic-demand spike are flattening or shrinking almost everywhere except the chip houses: Nvidia, Broadcom, and a handful of AI-first startups continue to post openings even as their peers freeze requisitions. The divergence is playing out inside firms, too. If your badge scans into an AI research lab, your stock is rising; if you sit in ops, admin, or a corner of software engineering easily augmented by LLMs, you might be getting a “what are the 5 things you did this week” email. Recruiters call it the “ChatGPT effect”: fewer backfills, slower junior hiring, and a sharper premium on roles that push models forward rather than merely integrate them. For founders, the signal is twofold: talent is suddenly more available (and often discounted), but the bar for head-count growth has never been higher. Headcount is no longer a stat of success in startups or big tech.

  • VENTURE CAPITAL | Fundraising is still moving at a crawl for founders and Investors. U.S. managers have closed only $23B year-to-date, pacing well below PitchBook’s $90B base-case for 2025 and extending LPs’ longest liquidity drought in a decade. Cash is concentrated in T1 firms while first-time funds languish, and the median time between vehicles has stretched past 2.9 years, evidence that even established GPs are stretching vintages to wait for better distribution flows. Against that backdrop, insiders have led roughly 1 in 10 new rounds, meaning investors are backstopping portfolios rather than opening the pipeline for new deployments. Liquidity remains the system’s choke point. Public listings have collapsed to 3.8% of all venture exits, while acquisitions now make up ~74%, the highest share since 2017. With the IPO window still fickle, the direct-secondary market has exploded; PitchBook pegs mid-point U.S. volume at $60B, up from $50B last year, though trading is heavily skewed to a handful of elite companies.

    • BIG ROUNDS, BIG NAMES | OpenAI’s $40B extension soaked up nearly 60% of all late-stage dollars in Q1. At the growth stage, Ramp added $200M at a $16B valuation, its fifth insider-led raise. Prediction-market rivals Kalshi and Polymarket have lined up $185M and $200M, respectively, as Paradigm and Founders Fund chase retail trading flows. Chime’s down-round IPO, 54% below its 2021 peak yet up 37% on day one, shows that investors will reward realism if growth and path-to-profit check out. For founders, the message is clear: capital is plentiful, but it is highly selective. AI infrastructure, regulated fintech rails, and cash-flow-positive vertical SaaS can still command premium terms; everything else competes in a market where the supply of startups continues to exceed available dollars, late-stage demand-supply ratios remain above pre-COVID norms, and price discovery often happens in secondaries first.

Build your investor pipeline with the comprehensive VC List we crafted for all founders

  • CREDIT SCORING | BNPL is all the rage these days, and the scoring giants are taking notice. This fall, FICO will roll out two new models that pull BNPL trade lines into the same algorithm that already underwrites 90% of U.S. consumer loans. The timing tracks the scale: more than 86M Americans tapped a pay-in-four (or six, or eight) plan last year, nearly twice the 2021 cohort, and those transactions now cover everything from beach vacations to Tuesday groceries to your DoorDash Chipotle. That said, the impact won’t be evenly felt. Boston Fed researchers found nearly one-quarter of sub-600 FICO borrowers have used BNPL, versus under 3% of the 800-plus club, and low-income households are 3x more likely to pay late. Layering those habits onto a credit file could ding score-sensitive consumers just as quickly as it rewards those who pay on time. Early evidence is mixed; an Affirm-FICO study suggests that frequent BNPL users generally maintain their scores, but the broader picture is clear: reporting parity is on the horizon, underwriting models will evolve, and the easy-money aura surrounding BNPL will fade.

  • AMERICAN ENERGY | 2024 delivered the United States’ third straight energy production record, 103 quadrillion BTUs in total, driven by new highs in natural gas (38% of the mix), crude oil (27%), and natural-gas liquids (9%). Oil output averaged 13.2 million barrels a day, almost all of the incremental barrels coming out of the Permian. Coal's share of the pie dropped to just 10%, its lowest level since the LBJ era, while biofuels, wind, and solar each posted record growth, with solar generation increasing by 25%. The volume story is only half the headline. Thanks to surging cargoes and steady oil product flows, the U.S. exported 30.9 quadrillion BTUs last year. It imported 21.7 quads, leaving a record energy surplus of roughly 9.3 quads, the most significant net-export margin since official tracking began in 1949. Zoom out, and the contrast with China couldn’t be sharper. The US now runs on a roughly one-third oil, one-third gas, one-third “everything-else” diet; China still leans overwhelmingly on coal, burning more of it than the rest of the world. U.S. power-sector emissions average about 369 g CO₂/kWh thanks to gas, whereas China sits near 582 g CO₂/kWh, even after a historic build-out of renewables. Yet Beijing’s industrial policy is yielding different dividends: it installed more solar capacity last year than the rest of the planet combined and now dominates global supply chains for critical minerals, EV batteries, and photovoltaic panels.

📰 Heartland Headline of the Month

Big win for Missouri!

Paytient just closed $40M in funding from Trinity Capital, giving its “healthcare wallet” more fuel to help patients spread medical bills over time.

Today, Paytient serves over 23 million members and partners with nearly 7,000 employers, insurers, and providers! 🏥

Paytient Gets $40 Million to Expand Healthcare Cost-Smoothing Solutions

Paytient secured $40 million from Trinity Capital to expand its employer- or health plan-embedded cost-smoothing solutions to new markets. The company

💰 Flyover Deals

Many strong early rounds closed across the heartland this month! 🚀

Check out the 212 flyover deals for over $2.4B in funding we tracked here; deals were down by 13%, but total funding was up by 7%

🐄 Middle America vs. National Macro Trends

  • Unemployment in Missouri was on the rise this month to 4.0%, while the National Average slipped to 4.2% ✅

  • The Midwest Consumer Price Index rose slightly this month at 3.7%, while the national rate is up 2.4% on the year ✅ 

🧠 This Month's Recommendations

📚 What We’re Reading

🎧 What We’re Listening To

📆 What We’re Doing

🪝Heartland Picks of the Month

📍Bentonville, AR

Hourly job matching app

Pre-Seed

📍Los Angeles / Nashville

Heavy equipment rental market and ERP

Pre-Seed

🚀 Redbud Highlights

Big win for the Braid team 👏

They’re teaming up with Beam to bring stablecoin infrastructure to community banks and credit unions across the U.S.

Read the full spread here!

🛠️ Resources

Follow our Medium and Latest 🔖

The information provided in this newsletter is intended for general understanding and educational purposes only, not as a guide to investment decisions. The authors, publishers, and distributors of this newsletter are not licensed financial advisors and are not providing financial advice or investment advisory services.s