The early-stage investment landscape has never offered more entry points or demanded more sophistication. At the same time, a contracting fundraising environment and an inverted exit market have seen some experienced practitioners leaving traditional VC roles, accelerating the reshuffling of where talent and capital are finding each other. Across five cohorts and 95 fellows, Material Change Institute has had a front-row seat to how domain experts – operators from Fortune 500s, startups, VC funds, accelerators, family offices and more – are translating hard-won sector knowledge into investing careers. The paths are not linear. They rarely are. But certain patterns are unmistakable, and they track with where capital is moving.
Here are five of them.
1. Angel Investing: The Dual-Track Advantage
Angel investing has become the most accessible entry point for operators who want to start deploying capital without leaving their current job and the market data validates this. More than 50% of angel investments in 2025 were at the pre-seed and seed stages and domain expertise offers a differentiated edge. An operator who has built in healthcare, climate and emerging technology can pattern-match in ways a generalist investor cannot replicate.
What’s also shifting is the structure. A growing trend toward hybrid “network + fund” models – combining pooled capital with individual participation – is giving investors flexibility and speed while ensuring consistent deal flow. For fellows building their track record, participation in sector-specific syndicates accomplishes two things at once: it spreads risk across more positions and embeds them in networks that compound over time.
The bar, however, has moved. The angel game now requires more discipline, more intentionality, and deeper relationships. Angels who focus on trusted referral networks and experienced co-investors are finding the most durable opportunity. For operators entering this space, that discipline is the asset./
“Being part of Material Change provided structure and support for me to go from investing in start ups as an angel to organizing my first SPV to invest on behalf of 20 LPs in AI, while working at my full-time work position.” – Ayori Selassie
2. Corporate Venture Capital: The Operator’s Inside Track
For fellows with corporate backgrounds, CVC is an underestimated entry point in the ecosystem and one that plays directly to their strengths. The ability to understand how large organizations buy, pilot, and scale technology is not common knowledge inside some venture teams.
The structural moment is real. Corporations are underwriting through venture investing, and CVC portfolios are increasingly treated as early diligence engines and long-term partnership funnels: a way to pre-select acquisitions well before they come to market. The implication for operators: knowing how a corporation actually evaluates and integrates technology is key.
The discipline has also tightened. CVCs are pursuing fewer, more targeted deals. AI investment continues to grow as a pillar of corporate innovation strategy, while efficiency and independence are becoming priorities. For fellows entering this space, that selectivity is an asset.
“Integrating what I’ve learned at Material Change with my medical and biopharma expertise and my extensive healthcare network has made the transition from launching drugs to launching investments feel not just possible, but natural.” – Na-Ri Oh, M.D.
3. Emerging Investors: Joining Funds and Launching Them
Emerging investor includes both fellows moving into roles at established VC firms and those launching their own funds. Both paths are being reshaped by the same force: sector specialization has become a dominant strategy.
The share of generalist funds has dropped from 22% in 2020 to just 5% by early 2026, another major structural shift toward focused investment theses. For fellows who arrive with deep domain expertise in healthcare, climate, emerging tech or other, this is not a constraint. It is a competitive advantage. The market is actively rewarding the exact profile Material Change Institute has been developing across five cohorts.
For those launching funds, the fundraising environment remains demanding but not closed. The average time between first and final close shortened to 15.8 months in 2025, down from 18 months the year prior and a third of emerging managers are using seeded portfolio strategies to attract investors. The lesson is consistent: clarity of thesis and early proof points matter. Fellows who have been deploying capital as angels and building track records through their operator networks are better positioned at fund launch.
The deeper shift is structural. Emerging investors showing up with domain expertise, a differentiated perspective and the discipline to execute is a type of new credentialing.
“Material Change was instrumental in sharpening my investment approach at Audaz Capital, giving me the structure and network to deepen my conviction as an investor. It also served as a natural stepping stone toward being accepted into Kauffman Fellows, reinforcing that I was building on the right foundation.”– Carlos Murguia
4. Family Offices: Active Participation
Family offices have become one of the most significant forces in early-stage investing and one of the most misunderstood. They are not passive check-writers. 70% of family offices are engaged in direct investing, and nearly two-thirds expect to make six or more direct investments in the coming year. It is a structural shift in how private wealth deploys into private markets.
What makes family offices particularly compelling for fellows is the alignment they have. 83% of family office startup deals are now structured as co-investments, meaning relationship-driven, conviction-led, and built around expertise. An operator who understands a sector deeply, brings proprietary deal flow, and can help a family office evaluate opportunity with real context is exactly the partner these offices want.
65% of family offices plan to prioritize AI investments, yet more than half have minimal exposure to the venture and growth markets where much of the innovation is occurring. That gap is an opening. Fellows who sit at the intersection of domain expertise and investment discipline are positioned to help family offices close it. And unlike institutional venture, family offices can move with flexibility, investing across stages and geographies without the constraints of a fund lifecycle.
“For operators moving into the family office space, a key challenge is translating deep industry knowledge into disciplined investment conviction. Being part of Material Change has provided the framework to translate my background from health systems and health tech startups into a strategic asset for direct family office investing.” – Niha Jain
5. Secondaries: The Market Signal Worth Understanding
Not every fellow is drawn to secondaries as a primary path. But no serious early-stage investor should be operating without a clear understanding of what the secondary market is doing right now, because it is one of the most instructive signals in the ecosystem.
US venture secondary transaction value reached 106.3 billion in 2025, bringing secondaries closer than ever to the scale of traditional IPOs and M&A. This is not a niche phenomenon. It is a structural response to an inverted VC market: one in which exits through IPO and acquisition have stalled, companies are staying private far longer, and LPs who expected distributions years ago are looking for alternative liquidity paths.
In the twelve months from July 2024 through June 2025, total VC secondary transaction value surpassed the combined value of all VC-backed IPOs over the same period. That is the story. It tells us that the traditional exit model – invest, grow, IPO, distribute – has been stalled, and the secondary market is now functioning as the ecosystem’s release valve.
Secondaries activity still makes up less than 5% of all private market activity, which leaves substantial room for expansion and leading institutional investors expect secondaries to become a base layer in private market portfolios going forward.
For emerging investors, this matters in two ways. First, secondary dynamics affect pricing and timing across every stage of the market. Understanding them makes you a sharper investor in primary deals. Second, as the market matures and direct secondaries become more accessible, they represent a pathway for building exposure to high-quality companies that might otherwise be unreachable at the primary stage. The investors who understand this will be better positioned when the window opens further.
The Through Line
Five cohorts in, the lesson is clear. Capital paths are multiplying. And the next wave of investors who will define the next decade of early-stage investing are not coming primarily from investment banks or legacy VC firms. They are coming from the industries they know and they are building from there.
These five takeaways represent the clearest patterns we’re seeing across our cohorts but they are far from the whole picture. Early-stage investing offers fourteen distinct paths. The right path is the one that fits each fellows’ expertise, network, timeline and the conviction to pursue it.
Applications for Class VI are open. If this is your moment, apply here.