America's educational endowments have long been among the most active and influential investors in venture capital funds, but soon they may retreat.

• No, this isn't another harangue about liquidity. It's much, much bigger than that.

This should be gravy days for college and university endowments, which typically have higher alternatives allocations than do pensions or other types of institutional investors.

• They generated 11.2% average returns in 2024, which was their third-best mark of the past decade.

But they're nonetheless staring down the barrel of a gun, and not just at schools that suffered donation losses due to on-campus protests.

One big issue is taxes, which endowments never paid until President Trump got a 1.4% levy into the 2017 tax bill for wealthy schools.

• Trump during the campaign indicated an interest in increasing the tax, at least on "left-wing" schools, and Rep. Mike Lawler (R-N.Y.) last week introduced a bill that would boost the rate to 10% and expand the number of schools required to pay.
• Vice President Vance, while still a U.S. senator, proposed raising the rate to 35% for top schools.
• Either one of these increases could significantly curtail an endowment's ability to make future investments, and even the threat may cause endowment managers to hold their wallets tighter.

The Trump administration's cuts to National Institute of Health matching grants also pose a huge problem for endowments of large research institutions.

• This is now being fought out in the courts but, if the White House succeeds, it could cause endowments to allocate significantly more annual money to institutional disbursements.
• Again, that eats into what endowments can invest.

Venture capitalist Ann Miura-Ko, a founding partner with Floodgate, said to Axios late last year: "Most people would say, 'Endowments are super rich, why do we care? It might really impact funding ... But, also, you think about the ways it will impact founders and the technologies we've invested in for so many years.

• "You look at Stanford. They're in their 60th anniversary of AI, and that's the fundamental research on which everything has been built that we're seeing today."

The bottom line: Endowments are on edge, and venture capital could tumble with them.

Morgan Stanley and other lenders to Elon Musk's Twitter takeover yesterday reportedly sold around $4.7 billion of X debt at face value.

Why it matters: This blows away expectations for the deal, in terms of both volume and pricing, and leaves creditors with only around $1.3 billion of their $12.5 billion outlay.

• Original plans were to sell $3 billion of debt at a 10%-20% discount.

Zoom in: One explanation is that X has improved its finances, although that's still fuzzy. For example, WSJ recently reported that X's 2024 revenue includes "hundreds of millions of dollars" transferred from xAI, leaving unclear if there's been any organic top-line growth.

• Better rationales are Musk's newfound proximity to power and the social media company's equity stake in xAI.

The bottom line: Musk long ago abandoned the Twitter branding but, in this case, par is a birdie.

🚑 Prenuvo, a Redwood City, Calif.-based provider of whole-body MRI screening, raised $120m in Series B funding co-led by Forerunner Ventures and Left Lane Capital, with insider Felicis participating. axios.link/41eyBQU

🚀 K2 Space, a Torrance, Calif.-based satellite platform, raised $110m in Series B funding. Lightspeed Venture Partners and Altimeter Capital co-led, and were joined by insiders Alpine Space Ventures, and First Round Capital. k2space.com

• ICON, an Austin, Texas-based company that builds homes using 3D printing, raised $56m in Series C funding co-led by NVP and Tiger Global. axios.link/41dCw06

• Eudia, a Palo Alto, Calif.-based AI platform for enterprise legal teams, raised $30m in Series A funding led by General Catalyst. The round could expand by another $75m for acquisitions, pending GC's approval. Other backers include Floodgate, Sierra Ventures, Hakluyt Capital, Defy, Everywhere Ventures, B3 Capital, Backbone, and Firsthand. eudia.com

• Koala, an SF-based CRM startup, raised $15m in Series A funding. CRV led, and was joined by HubSpot Ventures, Recall Capital and Afore. getkoala.com

• Plain, a B2B support platform, raised $15m in Series A funding. Battery Ventures led, and was joined by Index Ventures and Connect Ventures. axios.link/4gJaFcS

• Phase, a no-code platform for UI/UX designers, raised $13m from Gobi Partners, New Economy Ventures, Palm Drive Capital, Shilling VC, SquareOne, WI Harper, 42CAP and 500 Global. axios.link/43dX627

🚑 Junevity, an SF-based startup aimed at "resetting cell damage from age-related diseases," raised $10m in seed funding co-led by Goldcrest Capital and Godfrey Capital. junevity.com

🚑 Vitalchat, a Raleigh, N.C., provider of ambient AI for virtual nursing and telehealth, raised $6m in Series A funding led by Green Harvest Capital Industries. vitalchat.com

• Relive, a Portuguese provider of tools for real estate agents, raised $5.5m in Series A funding led by Indico Capital Partners. axios.link/3QkIlTk

⚡ Renew Risk, a British energy risk modeling startup, raised £5m. Molten Ventures led, and was joined by Lloyd's and Insurtech Gateway. axios.link/4k0igX9

⚡ Gridraven, an Estonian developer of dynamic line-ratings to ease grid bottlenecks, raised €4m from 42Cap and Icebreaker.vc. axios.link/4jVUJXk

🚑 Cerula Care, a West Hartford, Conn., maker of behavioral health tools for oncologists, raised $3.7m in seed funding. Esplanade Ventures led, and was joined by Amplify Capital, BrightEdge, DigiTx Partners, SpringTime Ventures, and Mike Pykosz. axios.link/41hZljy

• AI-BOB, a Swedish provider of construction compliance software, raised €2m led by CapitalT. axios.link/40WlH8K

• Ageras, a Danish marketplace for services like accounting and bookkeeping, acquired Dutch e-commerce bookkeeping startup Storebuddy. Ageras backers include Investcorp. axios.link/4b3v5vN

• Bain Capital agreed to acquire German facilities manager Apleona Group from PAI Partners for a reported €4b. axios.link/3QheACH

• Carlyle agreed to buy Japanese HR systems provider Kaonavi (Tokyo: 4435) for around $325m. axios.link/40ZK3yl

• CaseWorthy, a Salt Lake City portfolio company of STG, acquired Eccovia, a provider of case management and data analytics solutions to social and human services providers. caseworthy.com

⚡ Hydrostor, a Canadian long-duration energy storage developer and operator, secured US$200m from Canada Growth Fund, Goldman Sachs Alternatives, and CPP Investments. axios.link/4gBFhwV

⚡ Global Infrastructure Partners is in advanced talks to buy a majority stake in a renewable energy unit and a solar plant from listed Brazilian miner Vale, per Reuters. axios.link/41ea3aq

🚑 Olympus Partners acquired PAI Pharma, a Parsippany, N.J.-based maker of generic oral liquid medicines. paipharma.com

• RF Investment Partners acquired S&K Building Services, an Indianapolis-based provider of window washing and related services to multi-story commercial properties. skbuildingservices.com

🚑 Strive Medical, a portfolio company of NMS Capital, acquired Charles Pharmacy, a Bronx-based pharmacy and DME provider of diabetes supplies. strivemedical.com

🚑 Aardvark Therapeutics, a San Diego-based biotech focused on metabolic diseases, raised $94m in its IPO. It priced at the low end of its $16-$18 range and listed on the Nasdaq (AARD). The company had raised $129m from backers like Decheng Capital (17%) and Vickers Venture Fund (17%). axios.link/4gu0mJt

🚀 Karman, a Huntington Beach, Calif.-based maker of systems for space and defense programs, raised $506m in its IPO. It priced 23m shares at $22, versus plans to offer 21.1m shares at $18-$20, and listed on the NYSE (KRMN). Trive Capital held nearly a 69% pre-IPO stake. axios.link/3Q5y3Gw

• Turo, an Airbnb for cars, withdrew IPO registration papers it filed in early 2022. It did not give an explanation. The SF-based company has raised over $500m from firms like Kleiner Perkins, Canaan Partners, August Capital, and IAC. axios.link/3WZ7Dde

• CenterOak Partners sold Shamrock Environmental, a Browns Summit, N.C.-based provider of industrial waste and wastewater treatment services, to Republic Services. (NYSE: RSG). shamrockenviro.com

🚑 Gilde Healthcare sold Performation, a Dutch provider of health care optimization SaaS, to Legrand (Paris: LR) subsidiary Enovation. axios.link/4gEJQGz

⚡ Global Infrastructure Partners hired Morgan Stanley and Mitsubishi UFJ Financial Group to find a buyer for its control stake in Vena Energy, a Singaporean renewables firm that could be worth up to $10b, per Reuters. axios.link/41hXew8

• Bluestar Alliance, a brand management firm, acquired Italian luxury streetwear brand Palm Angels. axios.link/3EyN5C2

• Hotstar and JioCinema, both popular video streaming apps in India, have merged. axios.link/3X0dlfd

🏈 The New York Giants are seeking to sell up to a 10% ownership stake, per ESPN. axios.link/3X1Osj9

• Owens Corning (NYSE: OC) agreed to sell its glass reinforcements business for $755m to India's Praana Group. axios.link/3D0nGkf

• NextView Ventures of Boston is raising up to $135m for its sixth fund, per an SEC filing.

• Tusk Ventures has decided against raising a fourth fund, instead transitioning toward an advice-for-equity model. axios.link/414sMnU

• Arbor Investments promoted Carl Allegretti to co-CEO and John Jordan to president. arborpic.com

• Bessemer Venture Partners promoted Lance Co Ting Keh to venture partner. axios.link/4hSNLRd

• Goldman Sachs promoted Brandon Watkins to global head of internet investment banking, succeeding Jane Dunlevie (who remains head of TMT investment banking). axios.link/42VPe4R

Europe thus far has avoided the global M&A slowdown, with deal volume up 22% year-to-date.

• U.S. volume, meanwhile, is down 30% year-to-date. That includes a 36% drop in U.S. private equity activity.