Paul Holland is a veteran venture capitalist with more than two decades of experience investing in early-stage technology companies. Paul Holland joined Foundation Capital in Palo Alto in 2001 as a general partner and later became a general partner emeritus, during which time he helped guide investments that generated significant market capitalization across multiple sectors. His board experience includes companies such as Chegg, MobileIron, and Coverity, reflecting a long-standing focus on enterprise software, consumer platforms, and emerging technologies. Paul Holland’s background also includes senior operating roles, having led global sales and expansion efforts at companies like Pure Software and Kana Communications prior to their major exits. In addition to investing, he has remained active in shaping the venture ecosystem through leadership roles with the Western Association of Venture Capitalists, public commentary on technology markets, and guest lecturing at leading business schools. His career offers a practical lens through which to examine how venture capital continues to evolve alongside technological change.
Venture Capital Trends in the Age of Technology
Venture capital is a form of private investment where firms buy a stake in young companies with strong growth prospects. These firms supply money that helps startups expand and win new customers. They also guide founders through hiring, product planning, and market entry. Over time, this investment model has adapted to new business needs and technology, but the core idea remains the same – provide early money in exchange for a share in ownership and long-term growth.
The modern venture capital market took shape in the United States in the mid-1900s. Early firms backed new technology and industrial projects which later tied the sector to what was to become Silicon Valley. This funding helped companies such as Apple, Intel, Facebook, and Google grow from early concepts into global businesses. Activity reached а peak around 2020 due to lockdowns, rapid digital adoption, and large stimulus plans. Two to three years later investment levels fell as rising interest rates and inflation pushed investors to slow down. These shifts set the tone for current market trends.
Monetary policy has a clear influence on how venture capital flows. Higher interest rates make investors more cautious since money becomes more expensive and long-term investments look less appealing. Research shows that when policy tightens, firms reduce seed-stage activity – early funding rounds for startups – and move toward companies with proven traction. This shift hurts early founders who need time to build a product and reach customers. Fundraising cycles also stretch out, and new funds launch at a slower pace. Recent rate increases and inflation have led many firms to hold large pools of unused capital while asking startups to show stronger revenue and clearer market demand before they receive funding.
Artificial intelligence (AI) is а new frontier shaping venture capital. AI startups take in a large share of global funding, and the biggest checks go to teams building core model infrastructure. Investors back these firms because their work is applicable in health care, education, finance, and other large sectors. Many of these startups also become acquisition targets for major tech companies. A newer class of AI systems called System 2 AI that combine reasoning, planning, and decision-making has drawn strong interest from VCs since they support fields such as legal review, drug development, and robotics. Even with tighter markets, investors continue to fund AI because it functions as an enabler, accelerating other technologies. However, a narrow group of top AI leaders still takes most of the capital. Research from J.P. Morgan shows that about 10 firms drew more than 40 percent of AI venture funding in 2025.
Cybersecurity also plays a key role in how investors value a startup. Most venture firms add detailed security reviews to their financial and technical checks before they decide to invest. A weak security plan can reduce a firm’s appeal, while strong controls can increase confidence. Startups with clear policies, tested safeguards, and reliable data practices often receive stronger acquisition offers.
To attract more dollars, prudent founders are responding by treating security as a core product choice. They build privacy rules, data oversight, and threat modeling into early designs. Many teams are also keeping records of their security practices, including incident response plans, to move through diligence faster. Venture firms link these efforts to customer trust, smoother sales cycles, and better chances of a successful exit, which matter in а selective funding climate.
Climate tech and sustainability also draw steady venture interest because public agencies and large firms face clear pressure to meet sustainability goals. This demand creates room for startups such as those in renewable energy spaces, creating efficiency tools, and tracking carbon. However, funders expect strong evidence before they commit capital. Startups must show reliable data, verified performance, and a path to financial viability. Scalability also matters, since venture firms look for solutions that can expand across markets and deliver measurable impact at scale.
About Paul Holland
Paul Holland is a longtime venture capitalist and former general partner at Foundation Capital, where he invested in early-stage technology companies for more than 20 years. His career includes senior operating roles at Pure Software and Kana Communications and board service with multiple public and private companies. Paul Holland has served as president of the Western Association of Venture Capitalists, co-produced a documentary on venture capital history, and lectured on entrepreneurship at leading universities.
