In partnership with
Space Funding
Hey crew,
Jose here with another Space Funding Newsletter.
The biggest players just had a historic year. 87.6% of it went to funds that have been around since the 1980s. That's not a warning — it's an opportunity. Here's why.
Happy Saturday, everyone. ☀️
I want to talk about a number that came across my desk this week that I genuinely could not stop thinking about.
Because on the surface, it sounds like great news for the establishment, but if you know how to read it, it's actually one of the best signals I've seen in years for the founders we work with every day.
Investors see ANOTHER return from Masterworks (!!!!)
That’s 6 sales in 7 months. 29 all time. And the performance?
16.5%, 17.6%, and 17.8%, net annualized returns on sold works held longer than one year (See all 29 at Masterworks.com)
It’s not from stocks, private equity, or real estate… it’s from contemporary and post war art. Crazy, right?
With Masterworks, you don’t need to be a BILLIONAIRE to invest in multi-million dollar art anymore.
Historically, the segment overall has had attractive appreciation and low correlation to stocks.*
Masterworks targets works featuring legends like Banksy, Basquiat, and Picasso, identifying what they believe to have significant long-term appreciation potential, not just at the artist level but at the level of individual artworks.
As one of the largest players in the art market, with $1.3 billion invested over 500 artworks, they pass critical advantages through to their 70,000+ members to add art to their portfolios strategically.
Looking to diversify your investments in 2026?
*According to Masterworks data. Investing involves risk. Past performance is not indicative of future returns. See important Reg A disclosures at masterworks.com/cd.
THE NEWS
Two Things You Need to Know This Week
The megafunds are eating each other's lunch. The top 10 PE funds captured 45.7% of all capital raised in 2025 — up sharply from 34.5% in 2024 and the highest concentration since records began. KKR alone raised $117.9 billion over five years. When capital concentrates at that scale, it isn't competing with Reg CF. It's in a completely different universe.
$1.1 trillion in dry powder is sitting uninvested. According to Cherry Bekaert citing PitchBook, private equity dry powder hit a record $1.1 trillion at year-end 2025 — capital raised but not yet deployed. That's a massive overhang of institutional money looking for large, established, later-stage businesses. Early-stage founders raising under the Reg CF cap? Institutional PE literally cannot write that check. You're not competing. You're in a different market entirely.
THE CONTEXT
Where the $1.2 Trillion Actually Went
| Funds above $1B | |
| Top 10 funds | |
| Exp. GPs (4+ funds) | |
| Emerging managers |
THE DEAL
One Live Raise Worth Your Attention
WHAT’S WORKING RIGHT NOW
Three Things I'm Seeing in the Best Raises This Week
🎯The gap between "too small for PE" and "right for Reg CF" has never been wider
When 77% of institutional capital goes to funds above $1 billion, the companies that institutional PE genuinely cannot invest in — early-stage, $500K to $5M raise, pre-institutional — are more abundant than ever. The addressable market for Reg CF is growing because PE is concentrating upward, not because Reg CF is shrinking.
🔄Retail credibility is becoming an institutional unlock
Miso Robotics is the pattern, not the exception. Founders who build a base of 5,000 engaged retail investors are showing institutional partners something no pitch deck can replicate: genuine market demand from real people with real money on the line. The crowd validates what institutions then fund.
💧$1.1 trillion in dry powder is going to find its way downstream
That PE dry powder doesn't stay dry forever. When it deploys — into exits, into follow-on rounds, into acquisitions — the founders who already built a retail investor base and community of advocates are the ones who get noticed first. The best time to build that base is before you need it.
"Private markets just hit $1.2 trillion. Not one dollar of it was looking for your Reg CF round. That's not a problem, that's the entire point. You're not in the same market. You're building something better."
Post this. Send it to a founder who needs to hear it. Credit optional.
A Word From Jose
Why This Number Actually Energizes Me
Every time I see a headline about private equity hitting a new record, I hear from founders who feel like the game is rigged. And honestly? I get it. It can look that way from the outside. When 87.6% of institutional capital goes to funds that have been around since before most of our companies existed, it's easy to feel like you missed the party.
But here's what I actually see in that number: the institutional market is not your market. It never was. And the more concentrated it gets at the top — the more those mega-managers scoop up the big deals and the late-stage assets — the wider and more open the lane becomes for founders who are willing to build their capital base differently.
The founders we work with at Space Funding aren't competing with Blackstone. They're doing something Blackstone literally cannot do, they're letting the people who love their product own a piece of it. They're turning customers into evangelists and evangelists into investors. That's not a consolation prize. That's a completely different and in many ways more powerful kind of capital formation.
So yeah, celebrate the $1.2 trillion milestone if you want. But then come back to what we're building here. Because the founders who win the next decade aren't going to win by accessing the same capital everyone else is fighting over. They're going to win by accessing the capital that's been waiting for them all along.
Happy Saturday.
Go enjoy it.
See you on Wednesday. 🚀
Jose Ruiz
Founder & Managing Director, Space Funding
Space Funding
Helping founders navigate Reg CF, A+, and D like pros.
www.spacefunding.us
