Suited in variations of blue, Mark Zuckerberg took the stand Monday to defend his company’s past—and fight for its future.

The CEO of Meta, Zuckerberg has helmed the company that began as Facebook for more than 20 years. Over the last decade, he’s had to defend his business in Washington, D.C. plenty of times before, from the 2018 Cambridge Analytica hearings to the 2021 Congressional hearings focused on disinformation.

But arguably, these are the highest stakes Zuckerberg has faced so far, because what’s on trial is fundamental: The composition of his sprawling, $1.35 trillion market cap business.

The FTC has sued Meta, arguing that the social media giant’s acquisitions of Instagram and WhatsApp more than a decade ago were anti-competitive tactics to eliminate rivals. If Meta loses the case, it could be forced to divest the two apps. The case, which has its roots in the first Trump administration and was carried on by Biden FTC Chair Lina Khan, has travelled a long and winding docket (it was initially dismissed and then refiled) to finally make it to trial—with Zuckerberg as the first witness.

While FTC lawyer Daniel Matheson argued that “consumers do not have reasonable alternatives” to Facebook, Instagram, and WhatsApp, Zuckerberg made the case that Meta’s market is far bigger (and more competitive) than the government suggests. On the stand, Zuckerberg dismissed the idea that Facebook was centered on friends, and said that the company had become “more of a broad discovery and entertainment space.”

This case, of course, is far bigger than Meta. On some level, it’s existential for the tech landscape as a whole—at least, when it comes to how the industry currently operates. Whether or not the FTC’s claims about Meta’s anticompetitive motives are correct, the underlying business practice—a tech giant swallowing up an innovative startup—is the way the tech ecosystem has been structured to function, and to reward its various participants, over the past several decades.

For startups, especially those with limited IPO prospects, dreams of a Big Tech exit have been dim for the last several years—and under the Trump administration, investors and entrepreneurs have been eagerly waiting for M&A to roar back to life.

There is some evidence that has been happening—take, for example, Google’s blowout acquisition of Wiz for $32 billion, announced in March and the largest deal in the search giant’s history. And some in Meta’s camp are no doubt holding out hope that Trump will step in and pressure the FTC to settle the case with Zuckerberg (Meta has certainly been lobbying the President).

But the reality is this: If Meta loses this trial, the Big Tech dealmaking that was beginning to thaw is very likely to freeze back over, affecting the whole ecosystem. For startups, the hopes of exiting to a tech giant will appear grimmer, and liquidity-starved VCs will continue to see exits stall while LPs grow increasingly impatient for returns.

Again, none of this is to excuse or condone the monopolistic market concentration that may have been created over time. But given the incentives that are currently built into tech, it does remain natural for giants to look for innovation by acquiring startups.

Zuckerberg is expected to take the stand again on Tuesday, and when he does, he won’t just be making the case for his company. He’ll be making the case for Big Tech M&A being allowed to return to its longstanding modus operandi—for better, or for worse.

Freeze…The Trump administration said yesterday that it’s frozen about $2.2 billion in federal funds for Harvard, amid a standoff over demands sent by the government last week. Harvard is the latest prestigious university caught in a crossfire with the Trump administration. These showdowns could create pressure on endowments, traditional limited partners of VC firms.

ICYMI…I recently profiled Conviction founder Sarah Guo. We talked about what it was like to grow up in a startup office, and why prior assumptions don’t hold in the age of AI. Read the story here.

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.

VENTURE DEALS

- LiveKit, a San Jose-based voice AI platform, raised $45 million in Series B funding at a $345 million valuation. Altimeter Capital led the round and was joined by Redpoint Ventures and Hanabi Capital.

- Vinyl Equity, a Chicago-based transfer agent for public companies, raised $11.5 million in seed funding. Index Ventures and Spark Capital led the round and were joined by Infinity Ventures, Cambrian Fintech, and angel investors.

- Midnite, a London-based sportsbook and casino, raised $10 million in Series B funding. Discerning Capital, The Raine Group, and Play Ventures led the round and were joined by Venrex and Big Bets.

- NetRise, an Austin-based software supply chain security platform, raised $10 million in funding. DNX Ventures led the round and was joined by existing investors Miramar Digital Ventures, Sorenson Capital, Squadra Ventures, and Talons Ventures.

- Xaba, a Toronto-based synthetic brains developer for industrial robots, raised $6 million in seed funding. Hitachi Ventures led the round and was joined by Hazelview Ventures, BDC Capital, Exposition Ventures, and Impact Venture Capital.

- Collide, a Houston-based GenAI platform for the energy industry, raised $5 million in seed funding. Mercury Fund led the round and was joined by Bryan Sheffield, Billy Quinn, David Albin, and others.

- Octolane, a San Francisco-based AI-powered CRM, raised $2.6 million in seed funding from Y Combinator, Lan Xuezhao, General Catalyst Apex, and angel investors.

PRIVATE EQUITY

- ACA Group, backed by Genstar Capital, acquired Global Trading Analytics, a Rutherford, N.J.-based transaction cost analysis services provider. Financial terms were not disclosed.

- BayPine agreed to acquire CenExel Clinical Research, a Salt Lake City-based clinical trial site network. Financial terms were not disclosed.

- Xceed Foodservice Group, a portfolio company of San Francisco Equity Partners, acquired majority stakes in Ritchie Marketing, a Grand Rapids, Mich.-based food broker, and Littler Brokerage, a Decatur, Ga.-based brokerage services provider. Financial terms were not disclosed.

OTHER

- KKR agreed to acquire OSTTRA, a London-based post-trade solutions provider, from CME Group and S&P Global for an enterprise value of $3.1 billion.

- ActiveCampaign acquired Hilos, a Mexico City-based WhatsApp automation platform for sales and marketing teams. Financial terms were not disclosed.

- Intapp agreed to acquire TermSheet, a New York City-based real estate software provider. Financial terms were not disclosed.

- Pipe acquired Glean.ai, a New York City-based AI-powered spent management platform. Financial terms were not disclosed.

PEOPLE

- Maverix Private Equity, a Toronto-based private equity firm, added Keri Gawlik as an associate partner. Previously, she was at Abbott Capital Management.

Mark Zuckerberg’s showdown with the FTC is massive for Meta—and even bigger for tech overall