AI | The newest edition of the AI race is all about the top of the stack, where all the VC capital seems to be concentrating. OpenAI has secured roughly $66 billion to date, an $8.3 billion tranche this spring pushed its valuation to $300 billion and left it comfortably ahead of every private competitor except SpaceX. Elon Musk’s xAI, barely a year old, has already raised nearly half that amount and leapfrogged Anthropic, which is itself in market for another $5 billion at a rumored $170 billion valuation. The result is an unprecedented concentration of funding among a handful of labs, with everyone else scrambling for capacity and talent in a market where GPU pricing remains elevated. Washington is matching that private-sector momentum with rhetoric and subsidies, casting AI as the next strategic contest with China. There is no Manhattan Project-style deliverable; instead, policymakers are talking about abstract goals such as “global standards” and “AGI leadership,” all while the underlying technology and its economic use cases remain unsettled. For investors, the mismatch between capital deployment and clear commercial endpoints is the critical risk. Yet the incentives to spend on compute, talent, and lobbying are unmistakable: whoever establishes the technical rails could shape downstream markets for decades. Until benchmarks for success are better defined, we should expect the funding race to continue and the battle for the US to be an global AI leader a long one.

HOUSING | Pending home sales slipped another 0.8% in June, marking a 2.8% drop from a year ago, and you can’t blame “no inventory” this time. Listings are actually up, but sellers would rather yank their homes off the market than accept a haircut, so prices keep climbing, hitting a fresh record in June even as contract signings sag. The demand is cooling, but not enough to overpower sellers’ pandemic-era price anchoring, so affordability keeps retreating. Many are asking why aren’t prices bending to basic supply-and-demand? Mortgage-rate math. Roughly two-thirds of outstanding U.S. mortgages carry sub-4% rates, and homeowners aren’t eager to swap those rates for today’s ~6.7% 30-year fixed. A new Bankrate survey shows that just 3% of owners would willingly list if rates stay above 6%, so the “lock-in” effect lives on. Buyers, meanwhile, remember the days of 3% financing, now face monthly payments that feel crippling, even though, zooming out, 7% looks tame compared with the double-digit horror show of the 1980s. The stalemate is freezing the market: existing-home sales fell to a 10-month low in June, capping the slowest spring selling season in nearly three decades. Until rates drift meaningfully lower, or sellers capitulate on pricing, buyers will stay on the sidelines and inventory will resemble a revolving door of list-delist-relist. We’re expecting fewer transactions, stickier prices, and muted housing liquidity well into 2025 unless the Fed delivers a rate-cut surprise big enough to thaw both sides of the ledger.

VENTURE CAPITAL | We’re over halfway through 2025, and it’s a lot of the same story: stubborn markets, high valuations, and a bottleneck at the early stages. Deal flow is thin, but price tags for companies that do raise remain stubbornly elevated. Median seed valuations sit roughly 30% above Q4 2021 levels, even as round counts are down by half; Series A pricing has clawed back to its pandemic-era peak while volume is off 60%. The bar for “fundable” has risen. Founders need clean cap tables, real traction, and a clear AI story, but once a company checks those boxes, multistage funds crowd in and bid aggressively. Put simply, capital is concentrated in fewer names. That concentration carries risk. Many of today’s premium rounds assume growth trajectories that will be hard to sustain as AI hype normalizes and the cost of capital stays higher for longer. History suggests a lag between funding exuberance and valuation reset; if 2025-26 revenue doesn’t materialize, we could see a sharper correction in 2027. For now, founders who clear the higher bar get attractive terms, while the rest extend runway and wait for saner pricing. Against this backdrop, early-stage founders are leaning on venture debt to bridge milestones without taking a punitive down round. Through June, young companies captured 34.7% of the $30.7 billion in U.S. venture debt, their highest share in six years, and already $10.7 billion deployed. For teams with clear line-of-sight to revenue inflection, the math is compelling; for others, higher interest expense may simply defer what becomes a more difficult equity conversation later.

FIGMA’S IPO | Figma went public this week as the first “true” SaaS IPO of 2025! Shares were initially priced at $33, and opened at $85, triggering a halt past $112, and closed at $115.50, handing early buyers a 250% day-one gain and valuing the collaborative-design platform near $68 billion. That kind of pop is a signal of investor enthusiasm for design tools, and that maybe the tech IPO window is finally unjammed after two years of rate-driven hibernation. With Chime, Circle, and CoreWeave tiptoeing out earlier, Figma arrives as the first truly scaled SaaS name of the cycle. Figma’s revenue hit $228 million last quarter, up 46% YoY, while gross margins cleared 17%. Those metrics, plus an Adobe-size addressable market, help explain why investors treated the collapsed $20 billion Adobe takeover as yesterday’s news and happily stapled a $50 billion opening print to the cap table. Figma was founded when Dylan Field left Brown University in 2012 after snagging a $100k Thiel Fellowship, teamed up with college roommate Evan Wallace, and spent the next four years proving that design could live natively in the browser. Early demos were rough enough that Field considered pivoting to an online whiteboard, but the pair stuck with the vision, raised seed rounds from Index and Greylock, and shipped a public beta in 2016 that immediately caught fire among product teams tired of version-control chaos. Today’s $68 billion market cap is a long way from those Thiel Fellowship ramen days, but the DNA, a bet on real-time, multiplayer creativity, hasn’t changed.

THE NEXT CHIPOTLE | Every corner of corporate America loves a lunch bowl. So who’s going to be the next Chipotle? Their 6,000% post-IPO run has set the benchmark, and up-and-comers are eager to claim their piece of the market. Cava is out front: just two years after going public, the Mediterranean chain is worth north of $10 billion on only 382 stores. Investors see more than hummus; each location is being priced for future growth as Cava targets 1,000 restaurants by 2032 and edges toward Chipotle-style margins. Recent quarters show it can squeeze out operating profits even with higher ingredient costs, giving Wall Street ammunition for the “next Chipotle” thesis. The other player, Sweetgreen, is still wrestling with scale economics. Average checks in the mid-teens haven’t flipped its P&L, and the latest quarter logged a $28.5 million operating loss alongside a 3.1% dip in same-store sales, hardly the trajectory you want when your brand promise is premium, healthy growth. That gap is showing up in the share price: Sweetgreen is off nearly 60% this year versus Cava’s 20% slide. Both brands face the same macro headwinds: sticky food inflation, fickle urban foot traffic, but Cava’s path to profitability looks clearer right now. Our bets are on Cava 👀

“DEXIT” | Delaware’s century-long reign as the corporate zip code of choice is slowly slipping away. Elon started the trend of companies moving their incorporation out of Delaware (aka “dexit”) when, in January, the Court of Chancery issued a decision to void Elon Musk’s $56 billion Tesla pay package, a swipe at the board’s business judgment. Musk’s quick pivot to reincorporate Tesla and SpaceX in Texas was soon echoed by eight other public companies in H1 2025 (Roblox, AMC Networks, Dropbox, Tripadvisor, and more), while venture heavyweight AH Capital Management made headlines by uprooting to Nevada. Founders who once treated a Delaware charter as boilerplate are re-running the math, asking whether an unpredictable court and the litigation costs that follow still justify the “First State” premium. Nevada has seized the opening with an investor-friendly ruleset that feels tailor-made for high-growth tech. Its business-judgment rule is written into statute, shielding directors unless plaintiffs can prove fraud or intentional misconduct, no sprawling “entire fairness” inquiries, no retroactive second-guessing. In Nevada, lighter books-and-records inspection rights, a bright-line 15% ownership threshold for shareholder suits, and zero state income or franchise tax, and you start to see why the Silver State is drawing marquee names like a16z and why some GPs are suddenly comfortable chairing Nevada boards but skittish about Delaware ones.

Airalo locked in a $220,000,000 Series C out of Delaware, Ohio

BiomEdit secured a $18,400,000 Series B in Fishers

Chicago-based Empirical Security raised $11,935,326 in Seed capital

FloVision Solutions, out of South Bend, closed a $8,700,000 Series A

RoofMarketplace brought in $7,000,000 in Series A funding from Madison

Enriched Ag wrapped a $6,000,000 Seed round in Indianapolis

Chicago-based BuyProperly announced a $5,300,000 Seed round

FleetZoo, headquartered in Columbus, secured a $5,000,000 Seed round

Cincinnati’s Curie raised $4,600,000 in fresh Seed funding

Kid.io completed a $4,000,000 Seed round out of St. Louis

TalentEi pulled in a $3,900,000 Seed round from Indianapolis

Hidlo locked in $3,700,000 in Seed capital in Cleveland

Detroit-based Briight brought in a $3,000,000 Seed round

Reveler raised a $2,700,000 Seed round in Chicago

Learnify out of Madison closed a $2,300,000 Seed round

Kansas City’s Wellnest brought in $2,000,000 in Seed funding

Agrolink raised $1,900,000 in a Seed round based out of Lincoln

Milwaukee-based Zelixa completed a $1,700,000 Seed round

Freshcharge landed a $1,500,000 Seed round in Ann Arbor

MosaicAI closed a $1,200,000 Seed round out of Minneapolis

Cincinnati’s Wand secured $1,000,000 in Seed funding

IncluCare raised $900,000 in a Seed round based in Springfield

Unemployment in Missouri was on the rise this month to 4.0%, while the National Average slipped to 4.1% ✅

The Midwest Consumer Price Index rose slightly this month at 3.7%, while the national rate is up 3.0% on the year ✅

Product Driven by Matt Watson, one of our mentors here at Redbud. The book tackles the real challenges of leading and scaling engineering teams, with practical insights drawn from his experience founding and exiting multiple startups. Whether you're a founder, CTO, or engineering leader, this book will change how you think about product, leadership, and team culture.

Struggle, Not Pedigree: “Outsider” DNA Builds Unicorns

The road to AGI with Anthropic’s co-founder Jared Kaplin [40 min]

Ramp’s $22.5B valuation & the Figma IPO [1 hr 47 min]

Precursor’s Charles Hudson on lessons learned from investing in over 600 startups [42 mins]

Tech Chicago Week was this month. We loved connecting with so many familiar (and new!) faces at Mercato Partners, Distributed Ventures, Lightbank, Norton Rose Fulbright, and SVB founders & funders happy hour

Joined our friends at M25, Jump Capital, Customers Bank, Hyde Park Venture Partners, and Craft Ventures' Summer Soiree

We hosted a dinner for our LPs and friends of the fund in Columbia

Mizzou Alumni Association is hosting a two-part series on Angel Investing with our team. Register for Session #1 & Session #2

If Morning Brew’s CEO Alex Lieberman was planning a 12-month, weekly entrepreneurship class, here's how it'd go...

Actually good fundraising advice straight from a founder

The only market sizing guide founders will ever need

What to include in a data room 🗄

Early Stage Financial Template 💰

Need some examples? Check out these 50 pitch deck examples from successful fintech startups

➡️ +200 Non-VC Funding Sources for SaaS Founders

Thinking of raising some capital? Here’s the Due Diligence Checklist every founder should see 👀

YC's essential startup advice

Brian Chesky on when to hire 🧍🏼‍♀️

Metrics 101: What VCs look at while evaluating startups

Get started to build an outbound sales motion with these 130 SaaS Cold Email Templates

🤖 Why code is no longer a moat

A list of low/no code tools to get your company off the ground 🚀

Marc Andreessen on how to hire the best people

The complete guide on How to Interview and Hire ML/AI Engineers (one of our favorite reads on hiring out there)

One of the largest VC lists with over 18k investors 🫰

Founder who 120 VCs—he closed $2.7M in 5 weeks with demand for $5M+. Here's his step-by-step guide to close a round. 💰

📊 All-In-One Startup Metrics Guide - What to track, when and why

Resource page for founders we made here 📒