Geopolitical tensions between the US and Iran are driving up crude oil prices, fanning inflation worries and fueling market bets on a more hawkish Federal Reserve. Unsurprisingly, the US dollar is firming up as investors position for higher-for-longer interest rates.
While crude futures and currency swings can feel disconnected from early-stage venture funding, their macro impact on capital availability is direct. High risk-free yields increase the hurdle rate for speculative assets, encouraging institutional investors to park cash in safer, high-yielding instruments rather than risk-on equity plays.
For founders raising today, this reinforces a clear reality: cheap money is not making a quick comeback. Extending runway, demonstrating capital efficiency, and setting realistic deal pricing are critical to securing backing in a tighter macro environment.