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- Undercover VC |🌍 China’s VCs Are Back and Chasing $2B — Here’s Why
Undercover VC |🌍 China’s VCs Are Back and Chasing $2B — Here’s Why
Plus: 📉 CAC is up, win rates are down — now what?
Rafe Houston
July 23, 2025
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Welcome to Undercover VC — your inside track on how today’s top investors and operators are building high-performance, venture-backed businesses. Each edition delivers sharp, actionable insights on GTM strategy, capital efficiency, and portfolio execution across B2B SaaS, fintech, and AI. Built for VCs, operating partners, and scale-stage founders who want to win smarter — not just bigger.
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TODAY’S PICK 🎯
In sales, strategy rarely dies loudly. It just quietly fails to show up.
Reps nod. Enablement runs a session. Then… silence.
In this month’s Hive Perform Lab, their product team shares a new experiment designed to track if your messaging is actually being used in the field and if buyers care.
You’ll learn:
Why usage ≠ resonance
How they are testing USP performance tracking in live deals
What teams are learning when strategy misses the mark
If you’ve ever launched a new narrative and wondered whether it stuck, this one’s for you.
INDUSTRY INSIGHTS 🌐
What every founder should know before handing over observer rights
If a VC is investing 5% or more and not taking a board seat, they’ll probably ask for observer rights. It might seem harmless—but it’s not always a clear win.
🔍 Done right, board observers can offer strategic insights, open doors to networks, and deepen investor alignment—without giving up control. 🙅♂️ Done wrong, they slow down decision-making, stir misalignment, and create awkward dynamics you can't easily undo.
So, when does it make sense?
✅ Early-stage or strategic investors
✅ You’re building toward a deeper partnership
✅ They bring clear, actionable expertise
But if someone’s only in for a small cheque, think twice before giving them a seat at the (observer) table. Bottom line: A great board observer can be an asset. But too many voices—or the wrong ones—can muddy the waters fast.
👀 Founders: have you had good or bad experiences with observers? Let us know!
Venture capitalists rely on the power law, dating back to economist Vilfredo Pareto, where a few investments yield significant returns, as seen with companies like Spotify. Founders must demonstrate outsized potential and compelling storytelling, especially in Europe, to secure investments. This knowledge is crucial for founders aiming to attract venture capital to scale their businesses effectively.
China's major VC firms are pursuing $2 billion in new funds to re-engage global investors in sectors such as AI and toys. Six top firms, including LightSpeed China Partners, are launching dollar-denominated funds, signaling the market's recovery and the growing appeal of Chinese startups.
Biotech startups faced a tough second quarter in 2025 as venture funding declined sharply, dropping from $7 billion in Q1 to $4.8 billion. This dip is attributed to concerns over tariffs, funding cuts, and leadership changes, prompting investors to favor larger, less frequent funding rounds. |  BioPharma Dive |
India's venture capital funding in 2025 shows a significant decline, with a 21% drop to $5.7 billion in 653 deals, highlighting risk-averse investor behavior amid global geopolitical tensions. If this trend continues, India may face a protracted funding drought with few fertile startup opportunities. In contrast, global venture funding has surged, particularly in hard tech sectors, with significant investments in AI.
Fortune India
