The venture capital (VC) industry is experiencing significant changes as it navigates a challenging funding environment. A notable trend is the increasing consolidation of capital, with 44% of VC capital raised this year going to just two firms. This consolidation is leading to a shift where larger growth equity firms are expected to make more minority stake private equity-like investments, driven by the rise of vertical AI and larger funds seeking strong risk-adjusted returns. Emerging managers are facing a financing crunch, resulting in the consolidation of funds behind mega funds, which risks the survival of smaller players. Some VCs are adapting by contracting fund sizes or shifting their focus to specialized verticals or geographies. Rick Zullo shares insights on the outlook for the industry if this path continues. The secondary venture markets are also expected to evolve over the next 1-3 years as the industry adapts to these changes.