Trends in Startup Development

Only 1 in 5 founding teams at VC-backed startups own 50%+ of their companies after a Series A round. AKA raising venture is pretty damn dilutive. Not sure where the idea that founders should expect to still be majority owners in the business after Series A came from (though I do hear it repeated frequently). But the data is clear that's the minority case. Of course this does NOT mean that investors take control after the A because the employee option pool sits in between the founder and investor stakes. Add up founders plus the option pool and the median is neatly at 50%. Data below is from 3,500+ startups that have raised venture rounds in the past 18 months or so. All US companies, no deep tech included. 𝗠𝗲𝗱𝗶𝗮𝗻 𝗙𝗼𝘂𝗻𝗱𝗶𝗻𝗴 𝗧𝗲𝗮𝗺 𝗢𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽 (𝗱𝗮𝘆 𝗮𝗳𝘁𝗲𝗿 𝗿𝗼𝘂𝗻𝗱 𝗰𝗹𝗼𝘀𝗲𝘀) • Seed: 55.1% • Series A: 36.6% • Series B: 23.5% • Series C: 17.5% • Series D: 10.9% The dilution between rounds has been fairly consistent over the past few years (20% seed, 20% sold at A, 15% at B, etc). But the rapid rise in SAFE rounds means the initial priced financing is a heavier dilution point that many founders anticipate. The big question: does AI change this? If it becomes viable to build venture-scale companies with only a round or two of venture money, founders come out as winners. Throw in fewer employees and maybe the returns are even more attractive (although I'd love to see increased ownership on a per-employee basis if the teams are going to be tiny). As always - go in prepared. VC can be great, not-VC is great, only mistake is not understanding the game you're about to play. Share with a fundraising founder 🙏 #startups #founders #founderownership #VC Lots more data on founder equity in the Founder Ownership 2025 report: https://lnkd.in/gGWpFpEm

The landscape of starting a business has evolved dramatically over the past five decades. Here’s a look at some key differences between launching a business in the past and today: 1. Access to Information: 50 Years Ago: Information was limited to books, newspapers, and word of mouth. Today: Instant access to vast resources online, including market research, business strategies, and industry trends. 2. Technology: 50 Years Ago: Reliance on manual processes and traditional methods. Today: Advanced technology, from cloud computing to AI, streamlines operations and enhances productivity. 3. Marketing: 50 Years Ago: Marketing was primarily local, with a focus on print ads, direct mail, and face-to-face networking. Today: Digital marketing allows for global reach through social media, SEO, and online advertising. 4. Funding Opportunities: 50 Years Ago: Limited to traditional loans, personal savings, and venture capital. Today, Crowdfunding, angel investors, and online platforms offer diverse funding options. 5. Work Environment: 50 Years Ago: Conventional office spaces and hierarchical structures. Today, Remote work, flexible schedules, and flat organizational structures are common. 6. Customer Expectations: 50 Years Ago: Customer service was more about personal interactions. Today: Customers expect quick responses, personalization, and seamless online experiences. Starting a business today offers new opportunities and challenges, with technology and global connectivity playing pivotal roles. Embrace these changes to stay competitive and thrive in the modern business landscape. #BusinessEvolution #Entrepreneurship #StartupJourney

Startup go-to-market goes through 3 major phases. Failure to recognize which phase you’re in will cause pain, frustration — and often, failure. 🔴 Phase 1 — Market Experimentation This phase is all about learning. But it’s not “research.” The fastest way to find a viable market is by selling. The keys to this phase are speed and volume — you’re trying to get in front of as many potential customers as you can. You’ll start with your network, but should also be creating content, cold DMing prospects, attending meetups, etc. The goal isn’t to hit $1M ARR. It’s to figure out who cares most about the problem you’re solving. Once you know that, you can focus your efforts. 💢 A word of caution: This phase is messy. You’ll face rejection. A lot. But keep going and remember, this is temporary. You’ll know you’re ready for the next phase when you have a gut feeling that you could sell a lot of your product to a specific market. 🔵 Phase 2 — Beachhead Growth This phase is about building systems. The name of the game here is “repeatability.” 👉 To create effective systems, you MUST narrow your focus. You need to solve one use case for one specific group of people. This focus is your competitive advantage for breaking into the market. Without it, you’ll feel like you’re boiling the ocean, and your GTM efforts won’t be effective. Tactically, this phase is about setting up the “plumbing” for how prospects find, evaluate, buy, and use your product. This often involves: • Building marketing and sales assets (homepages, sales decks, email campaigns, etc.) • Developing top-of-funnel content (blogs, social posts, webinars) • Setting up tools to track leads and prospects (CRM) • Creating onboarding materials The goal? Dominate this segment. This should get you to at least $1M ARR. 🟢 Phase 3 — Expansion Growth By this point, you should have a repeatable GTM program that’s generating revenue and earning you some name recognition as a rising player. Now, it’s time to reinvest that revenue and grow. You have 2 main options to consider: • Enter adjacent markets with the same use case (horizontal) • Solve new use cases for your current market (vertical) Which route you take depends on the type of business you want to build, who you want to serve, and your market’s appetite. 💢 But don’t make the classic mistake of going after multiple markets all at once. Expansion is like restarting phase 2—new segments require new systems. The smartest move? Take it one segment at a time. (Sequencing) ——— Remember: Building GTM programs is just like building a product. Mindset is key. There’s a time for learning. There’s a time for building something small (but viable). And there’s a time to scale. Know what phase you’re in, and you’ll have a much smoother time growing your startup. #startups #gotomarketstrategy #growth

🚀𝗜𝗻𝗱𝗶𝗮 𝗝𝘂𝘀𝘁 𝗔𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗱 𝗦𝗼𝗺𝗲 𝗦𝗲𝗿𝗶𝗼𝘂𝘀 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗳𝗼𝗿 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗶𝗻 𝟮𝟬𝟮𝟲 I spent some time going through the latest startup schemes that were announced, and honestly, this is one of the strongest pushes India has made for early-stage founders. If you’re building something in AI, education, hardware, deep-tech or even an early student startup, there’s real money on the table. And the best part is, a lot of this support comes without giving up equity. Sharing the ones that really stood out to me: 𝟭. 𝗡-𝗦𝗧𝗘𝗣 (₹𝟰 𝗟𝗮𝗸𝗵𝘀+) This is probably the easiest starting point for: • First-time founders • Early ideas • Student or campus startups It’s simple support to help you start building. 𝟮. 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗔𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗼𝗿 (₹𝟭 𝗖𝗿𝗼𝗿𝗲+) If you’re thinking global from day one, this is worth exploring. They help with: • Setting up in the US • GTM support • High-ticket funding Basically a shortcut to global exposure. 𝟯. 𝗘𝗗𝗨 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝗿 (₹𝟰 𝗖𝗿𝗼𝗿𝗲𝘀+) Anyone working on EdTech or skill development should look at this. There’s big support for: • EdTech products • Skilling platforms • Curriculum and learning innovation 𝟰. 𝗨𝗻𝗻𝗮𝘁𝗶 𝗔𝗜 (₹𝟯𝟬 𝗟𝗮𝗸𝗵𝘀+) This is huge for AI builders. Perfect for: • AI tools • SaaS + ML products • Automation + deep-tech ideas If you’re building anything around AI, this is free rocket fuel. 𝟱. 𝗡𝗜𝗗𝗛𝗜 𝗣𝗥𝗔𝗬𝗔𝗦 (₹𝟭𝟬 𝗟𝗮𝗸𝗵𝘀) This one is for hardware and IoT founders. You can actually get funding to build your prototype or MVP. A very practical scheme if your idea needs R&D. 𝟲. 𝗦𝘁𝗮𝗿𝘁𝘂𝗽 𝗜𝗻𝗱𝗶𝗮 𝗦𝗲𝗲𝗱 𝗙𝘂𝗻𝗱 (₹𝟱𝟬 𝗟𝗮𝗸𝗵𝘀) Designed for early-stage teams working on: • Prototype development • Product building • Market entry One of the most reliable government-backed supports right now. I’m sharing this because a lot of founders will be aware. If you’re planning to start something in 2026, this is genuinely the best time to prepare. If you want to discuss which scheme fits your idea, feel free to message me. Always happy to connect with other builders. #Startups #IndiaStartups #FounderCommunity #AI #EdTech #DeepTech #Innovation #Entrepreneurs #Funding #NIDHIPrayas #UnnatiAI #SeedFund #StartupEcosystem

Not all parts of a company grow up at the same pace. We often classify companies as small, medium, or large/early, mid, or late-stage. But peek under the hood of most companies, and you’ll find something messier and more interesting: multiple opportunities at different life stages, coexisting. The mistake many of us make, and we’ve made it often is to apply a uniform operating model across all of them. We assume our company’s stage defines how every team should work. That’s almost always incorrect. An early-stage opportunity needs to find and prove PMF. 
A mid-stage one needs to scale up efficiently. 
A mature one needs to sustain growth and improve margins. Each of these demands different skills, cadences, and mindsets. Yet we often staff them the same way and wonder why things aren’t working. A few reflections that have helped us think better: Builder vs Operator:
 Early-stage needs builders. Transformation stages need them too - PMF tasks never really go away. Mature businesses benefit from operators who can optimize systems.
 Cadence matters:
 Early-stage = Daily learning loops; Mature = Monthly or quarterly. Incorrect rhythm burns or slows. One metric vs a dashboard: 
Early = Solve for one or two key outcomes; Later = Solve for ten things, carefully balanced; Confusing PMF with scale is a classic trap. Structure vs Chaos:
 One end thrives on unstructured hustle. The other needs clarity, delegation, and process.
 You need to know where you are on that spectrum and staff accordingly. This applies not just to companies, but to teams too. 
Every reasonably sized team has its own mix of early, mid, and late-stage problems. How do you manage that mix under one roof?
Would love to hear what’s worked (or not) for you. #OrgDesign #Leadership #CompanyBuilding #TeamStructures #StartupLife

Did you know that early stage VC is actually a great public market tech hedge? I'm often asked about my take on what is happening with SaaS and tech incumbents. I don’t have a crystal ball I was around when the internet came in, then cloud, then mobile, and now have a front row seat as the founders we back are building and utilising AI like never before. In short, AI has already changed the world and we are still in Act 1!   Public market rerating is an unfortunate growing pain of the uncertainty caused by any truly disruptive technology. As consumers and businesses start to reap the benefits of AI, spending patterns will shift, winners and losers will emerge. There is also a fair amount of fear (and greed) that always motivates big moves on the public market. Many public market metrics are holding or even improving, but the market anticipates a reckoning on churn and the per seat SaaS model more generally for slower incumbents. When the foundations are shaking is the best time to be an investor. Here’s why I am even more bullish about early stage venture than ever: 1. Counter-intuitively Venture Capital assets are generally uncorrelated with public markets, acting as a natural hedge against the AI disruption currently hitting listed SaaS incumbents. (See link in comments). A long time horizon sees market uncertainty as an opportune time to invest when others are fearful. When we first started our fund in 2021 it was one of the bleakest times in tech but in hindsight that was a great time to be investing! 2. Early stage companies benefit disproportionately from the AI Trend. The cost curve to build a product, find early PMF and start scaling has shifted dramatically.  The growth we are seeing and the speed of execution at the pre-seed stage is a step change from even 5 years ago. 3. Strategy Aligned with Disruption. A pre-seed specialist strategy benefits enormously from the shifting cost curve for early-stage companies. This means faster development, compressed burn multiples, and more flexible pivots. 4. New Moats, New Value. While the traditional per-seat SaaS model is under pressure. Agentic AI is moving software from "systems of record" to "systems of action," allowing for even greater value capture with-in the enterprise through data moats, proprietary models, and ultra-specific domain workflow logic. Whole new businesses and approaches are now possible (and required) and the ROI is much greater than before. 5. Incumbents will need to plug AI gaps and fast. I’ve already seen this dynamic work to the advantage of portfolio companies acquired by incumbents who then leapfrog their competitors by bolting on an AI first company to their existing custom base and product distribution engine.   As with any large disruption it's almost certainly going to be a rocky ride but I'm excited for the challenge and to continue to support early stage founders who lean in to the uncertainty and want to change the world. 

Today’s The Times coverage makes clear that Innovate UK, the UK government’s innovation agency, is embarking on a significant strategic shift in how it deploys its £1.1 billion budget, moving away from broad‑based grant support for hundreds of thousands of innovators each year toward concentrating resources on a smaller group of high‑potential early‑stage technology companies. Over recent years Innovate UK’s provided a wide range of grants and programmes; under the new approach, the agency intends to focus on several thousand companies with clear prospects to scale significantly and deliver major economic impact. The emphasis will be on sectors deemed strategically important, such as advanced manufacturing, life sciences, digital technologies including artificial intelligence, semiconductors, and quantum computing. This recalibration is designed to incubate “future industry giants” and bolster the UK’s competitiveness in key global technology arenas. Innovate UK plans to discontinue or repurpose legacy grant streams, such as the well‑known Smart Grants, and reallocate those resources toward more targeted, sector‑specific support. Another notable change highlighted in the article is the repositioning of the Women in Innovation grant to focus on female‑led high‑growth tech enterprises, signalling an intention to align innovation funding more closely with both strategic sector goals and broader inclusion objectives. In addition, programmes such as the Business Growth Advice service and support for Catapult centres will be realigned to place stronger emphasis on company‑level impact and scaling outcomes. New initiatives are also being introduced, including “Velocity,” a concierge‑style service intended to help high‑growth firms navigate early‑stage challenges, and an expanded Growth Catalyst scheme offering sizeable, strategic grants. The new strategy fosters closer engagement with private capital aiming to leverage its technical expertise to provide credible due diligence bridging public funding with private investment. By doing so, the agency intends to lower the barriers to private capital for emerging firms and create clearer pathways for later‑stage financing. The reporting underscores a broader shift in the UK’s innovation funding ecosystem: public support is being refocused toward fewer but deeper bets. Reactions from founders, ecosystem practitioners and commentators illustrate a nuanced picture, there is concern that narrowing the funding aperture too far risks excluding viable innovators that don’t yet meet rigid “high‑growth” definitions. The tension between strategic concentration of funding for maximum impact and the risk of leaving promising early‑stage innovators behind is interesting. The test of the new strategy will be how effectively it navigates these tensions in implementation, maintaining broad ecosystem vitality while driving deeper impact through focused support. #UKRI #innovateuk #innovation #HMtreasury #startups

I was surprised to learn that despite all the Corporate Venture Capital (CVC) dollars flowing into startups these days, it's not translating into much M&A activity. It's no secret that CVCs have become players in the VC funding landscape - according to PitchBook between 2014 and 2024, they consistently participated in over 46% of total US VC deal value and 21% of deal count. That's a ton of cash, so you'd think with all that investment, we'd see a corresponding surge in CVC-backed companies getting acquired by their corporate sponsors - but nope. Surprisingly, the percentage of CVC-backed companies that were eventually acquired by an existing CVC investor has remained super low, below 4% for the past 25 years. In 2018, a mere 2% of companies that received their first CVC investment were later acquired by that investor or its parent co. So what's the rub? While CVCs have increasingly showed up on early-stage company cap tables, they are more typically found in late-stage and growth deals. This makes sense from a risk perspective – later-stage startups are easier to partner with from a POC perspective and are less risky to the balance sheet. However, it also makes them much more difficult and expensive to acquire. Another interesting nugget is CVCs growing involvement in mega-deals. In 2023, CVCs participated in 57.4% of US VC deals by value, their highest level yet. So clearly, they can deploy large sums of capital and move across the VC lifecycle. However, it also means that many of these mature companies are more likely to pursue an IPO rather than an acquisition. Despite the current trends, I think we will see a gradual increase in CVC-backed acquisitions in the coming years. As the broader M&A market warms up and corporations need new avenues for growth, CVCs are well-positioned to leverage their unique advantages, like information asymmetry and established relationships, to de-risk and execute successful acquisitions. Plus the regulatory environment under the new admin will most certainly open the doors for big deals to get approval more easily. As someone who ran a CVC group for a few years, I'm excited for the shift. The whole system needs more liquidity and this could be a path to the tech markets' recovery.

From ‘too niche, too small’ to a top 3 finalist in the global Alpha Awards – How five trends changed sentiment within two years. When we launched Vanagon in 2023, right in the middle of Europe’s toughest VC downcycle, many thought we were crazy. In fact, much of the feedback wasn’t encouraging: Apart from “Interesting timing,” we often heard: “Focus too niche, too early” or “Fund size too small.” Our positioning – now and then: • A small Munich (pre)-seed VC fund. • Focusing on AI-native, asset-light deeptech. • With startups rebuilding Europe’s competitiveness and resilience – in Nature, Industry, Data & Finance. Despite the sluggish start, we kept going. Then two things happened: We found early believers that enabled us to demonstrate our thesis with early portfolio traction (thank you beyond words to our early supporters and portfolio companies!). At the same time, sentiment shifted. Suddenly our timing, fund size, and thesis were increasingly described as “spot on.” Why? A few trends became clearer: • With distributions at multi-year lows and the megafund boom fading, LPs are prioritizing smaller, specialist funds. Exit realities favor smaller funds: only a tiny fraction of exits reach unicorn valuations. For smaller funds like ours, unicorns are optional – smaller exits can also return the fund multiple times. • AI is rewriting the rules. Capital efficiency is redefined: outsized enterprise value can be created with lean teams. The steepest value creation is shifting to the earliest stages. (Pre)-seed is the place to be. • Classic SaaS metrics often fail in DeepTech. As noted in McKinsey and BCG reports, scaling DeepTech requires new mental models – the DNA of specialized DeepTech funds like us. • Geopolitical realities made it clear: Europe must invest more in its own innovation & commercialization to regain competitiveness, resilience, and independence. Applied AI and AI for industry are strong European opportunities. • Lastly, our home base Munich. While overtaking Berlin in VC capital invested, Munich has been emerging as Europe’s DeepTech capital. Here, we find amazing founders with deep expertise and category-defining software, creating globally competitive, planet-positive solutions. Now, two years later, fund of funds Allocator One has analyzed over 900 funds globally. They selected us as the European candidate among the top 3 global finalists in the Alpha Awards’ “Breakout Fund of the Year” – alongside a fund from the US and one from India. We are deeply honored. Keep your fingers crossed for us at the #AlphaAwards2025 ceremony in London!

If you're a founder building in AI, this is a moment to pay close attention. Google Cloud’s new VC trends report nails what I’m seeing across the Google for Startups network—and the implications are big. The report outlines 7 key VC trends showing how AI is transforming industries, shifting investor priorities, and creating new opportunities for startups across industries and regions. Here’s how I interpreted it: 1. AI isn’t a vertical anymore It’s becoming foundational, touching everything from legal to logistics. Founders who treat AI as infrastructure, not a bolt-on, are pulling ahead. 2. Non-tech sectors are ripe for reinvention Manufacturing, agriculture, and education may not be the “sexy” industries, but they’re where AI is unlocking real efficiency and defensible value. 3. Fintech is evolving fast VCs are backing startups solving actual infrastructure gaps like cross-border payments, embedded finance, and B2B workflows. Less flash, more function. 4. Healthcare and cybersecurity are becoming AI-native Startups in these sectors aren’t just using AI—they’re built on it. It’s changing diagnostics, threat prevention, and how teams operate entirely. 5. The capital map is shifting Conviction-led investing is rising beyond Silicon Valley. Local VCs with deep domain knowledge are leading meaningful progress across LATAM, Africa, and Southeast Asia. What I read in the report very accurately reflects what I’m hearing from founders globally, from Tel Aviv to Nairobi and London. AI isn’t just changing products—it’s changing how startups think, act, and scale. What’s the overlooked opportunity in your industry that AI could unlock? Or better yet, what’s stopping you from building it?