Q1 2025 Venture Financing Report – Interview With Jeff Crowe

Key insights from Jeff Crowe

On what differentiates an outstanding venture capital investor: “They have a nose for where technology is going, build deep expertise in their areas of focus, grow their personal networks continuously, and exhibit deep curiosity and a ton of hustle.”

On the role of venture capital firms in the next decade: “The rise of AI means that companies must move faster, and the increase in global volatility requires them to be more nimble as they build distribution networks, supply chains and development teams that cross borders. With their own global experience across hundreds of portfolio companies and networks of executives and advisors, venture firms can help portfolio companies do both – move faster and be more nimble.”

On key trends from this quarter’s VC data: “Without positive exits, venture investors are focusing more on supporting existing portfolio companies, exploring secondary sales to create liquidity and managing expectations with LPs. Investors have less time and less appetite to make new investments – at least until the exit landscape improves and restores their confidence.”

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You’ve had a remarkable career spanning more than two decades in technology and venture capital. What were the most challenging aspects of transitioning from your roles as a founder and being in a company’s C-suite to becoming managing partner at Norwest? How did your previous experiences prepare you for this shift?

The biggest challenge in the transition from founder to early-stage investor is that the feedback loops from your decisions are much longer, measured in years as opposed to weeks or months. As a founder, you’re used to seeing the impact of your decision almost immediately; however, as a venture investor, you can go for many years before you see clear, positive outcomes. That delayed gratification can be quite humbling, especially for former operators who are used to fast cycles and visible traction.

All that said, my operating experience has been incredibly valuable in building trust with founders because they know I’ve been there and understand the ups and downs of the company-building journey. At the end of the day, I’m still building – just in a different way.

With six consecutive appearances on the Forbes Midas List, what differentiates an outstanding venture capital investor in your opinion? Have these traits changed over time and, if so, in what ways?

The best venture investors have the highest quality deal flow, pick more winners out of that top-notch deal flow and persuade more of those winning teams to take their term sheets. They have a nose for where technology is going, build deep expertise in their areas of focus, grow their personal networks continuously, and exhibit deep curiosity and a ton of hustle. Those traits were true 20 years ago, and they remain true today.

At the same time, there are other aspects of venture success that have evolved significantly over the last 20 years, including the more comprehensive use of data, analytics and artificial intelligence (AI) by venture investors, and the build-out of experienced portfolio services teams to help founders scale their companies.

Our Q1 data shows a decline in deal volume across all stages, and invested capital decreased across most stages. Do you believe this trend is directly correlated to the uncertainty we’ve experienced in the market, or are there other factors specific to the venture ecosystem impacting this activity?

The attenuated volumes in Q1 are a result of broader market uncertainty over the quarter as geopolitical volatility led to hesitancy around IPOs, M&A and new investments. The big exception to the overall slowdown is the continued rapid growth in investment in the entire AI stack, from data centers and large language models to data infrastructure, developer tools and applications. 

The increase in down rounds and flat rounds, along with a decline in up rounds, reflects changing market dynamics. How do you think this affects the mindsets of both founders and investors?

We are still experiencing some of the hangover from the investment bubble of 2021. Companies that raised money then have finally been forced to come back to market and have seen flat or down rounds this time around. 

In many ways, though, this is a positive development. Those companies have sharpened their focus, become much more capital efficient and driven for growth, while aggressively cutting losses. The best of those companies are now solidly profitable and teed up for attractive exits when markets do reopen. 

Norwest announced several investor promotions this past quarter. What are some of the ways Norwest cultivates leadership within its investment team, and what role does mentorship play in this process?

Our recent promotions celebrate investors who have demonstrated exceptional execution and collaborative leadership, consistently going above and beyond in their roles.

We cultivate leadership by enabling our investors to develop conviction and deep industry expertise in areas they are passionate about. This expertise leads to building meaningful relationships with founders and developing investment theses that drive real deal flow for the firm.

Mentorship is built into everything we do. From day one, our associates and new team members are trusted thought partners and encouraged to develop their own perspectives. We pair new hires with senior leaders, include them in founder calls and invite them to lead aspects of the deal process. Our partners are hands-on – offering feedback, creating stretch moments and setting the bar high. 

We’re proud of the low-ego, high-support culture we’ve built – one that gives budding investors the autonomy, confidence and guidance to grow into impactful leaders.

How do you see the role of venture capital firms like Norwest changing in the next decade, especially with the rise of new technologies and global challenges?

The best venture firms will play a larger and larger role as strategic partners, not just sources of capital. 

The rise of AI means that companies must move faster, and the increase in global volatility requires them to be more nimble as they build distribution networks, supply chains and development teams that cross borders. With their own global experience across hundreds of portfolio companies and networks of executives and advisors, venture firms can help portfolio companies do both – move faster and be more nimble.

Are there any other key trends or notable insights from this quarter’s VC data that you think are important to highlight?

Deal volumes were down in Q1, despite the tremendous amount of dry powder that venture investors have available to invest. Without the enormous surge of current investment in AI, deal volumes and invested capital would have been down that much more sharply. 

The current venture investment slowdown is primarily a function of the sluggish pace of IPO and M&A activity. Without positive exits, venture investors are focusing more on supporting existing portfolio companies, exploring secondary sales to create liquidity and managing expectations with LPs. Investors have less time and less appetite to make new investments – at least until the exit landscape improves and restores their confidence. 

About Jeff Crowe

Jeff Crowe is a senior managing partner at Norwest, a global venture capital and growth equity investment firm with $15.5 billion in capital under management. He focuses on investments in the internet, consumer and software arenas. Prior to joining Norwest in 2004, Jeff held CEO and executive roles at several technology companies. Jeff has appeared six times on the Forbes Midas List of the top 100 venture investors in the world.

About Norwest

Norwest is a global venture and growth equity investment firm managing more than $15.5 billion in capital. Since its inception, Norwest has invested in more than 700 companies and currently partners with more than 250 companies in its venture and growth equity portfolio. The firm invests in early- to late-stage businesses across key sectors with a focus on enterprise, healthcare and consumer. The Norwest team offers a deep network of connections, extensive operating experience and a wide range of impactful services to help CEOs and founders scale their businesses. Norwest has offices in Menlo Park and San Francisco, California, as well as Mumbai, India, and Tel Aviv, Israel. /p>