Venture Capital Insights

Founders are turning down millions in venture capital. Their reason? "I don't need the money. We're already profitable." 10 years ago, unthinkable. Today, common. The Information wrote an insightful piece on "Seed-strapping"—raise once, focus on profitability: → $3.7M revenue per employee (10X industry standard) → 80% lower development costs → 90% less capital to reach profitability The uncomfortable truth for VCs: → Companies need just one funding round → SAFEs never convert → Founders keep 70-80% ownership → The traditional model breaks For investors, survival requires reinvention. New Fund Economics: → Smaller funds with more concentrated bets → Lower management fees, higher carry → Faster distribution timelines → Many smaller wins vs. few unicorn exits New Deal Structures: → Revenue-based financing with capped returns → Dividend rights if companies don't raise again → Profit-sharing without requiring additional rounds New Value Proposition: → Capital efficiency expertise over growth-at-all-costs → Customer connections & distribution support → Operational support over financial engineering → Alternative liquidity paths beyond traditional exits The era of "We'll figure out profitability later" is over. What comes next? Imagine a VC landscape dominated by smaller, specialized firms helping founders build profitable businesses from day one. In this new world, the winners won't have the biggest funds—they'll understand AI has fundamentally changed capital efficiency. For founders: Why dilute when you can profit after one round? For investors: How do you add value when capital isn't the constraint? The answer determines who thrives—and who vanishes in 24 months.

There’s a painful gap between a VC saying “this is interesting” during an initial meeting and actually wiring the money. Founders who close rounds in this climate know that a great story is just the beginning - the real test comes later during due diligence. From where I sit as an investor, I see it happen every week: a fantastic pitch earns a follow-up meeting, but the momentum dies during the diligence process. That’s because in a cautious market, investors aren't just betting on your vision / pitch / charisma / top-line metrics. They're betting on your execution engine. How you respond to their digging reveals more than any slide ever could. Here's a few operational habits I see from founders who navigate diligence successfully and close their round efficiently: ✔️ They Run a "Glass Box" Operation. Instead of scrambling to assemble a data room, they simply invite investors into their existing company 'brain' - usually a clean, continuously updated space in Notion, Coda or DocSend. It holds their live metrics, customer notes, and experiment results. This sends a clear signal: data isn't something you prepare for a pitch; it's the language you speak every day. ✔️ They Lead with Candor. The old way was to have a curated list of your happiest customers ready for reference calls. The new way is to get ahead of the request entirely. The most confident founders proactively share not just their wins, but their learnings from customers that didn't convert or churned. This confidence in your own process turns an interrogation into a partnership. ✔️ The Team's Cohesion Shines Under Pressure. Every question from an investor, no matter how small, is a test of your team's alignment. When you're asked for a specific data cut, a fast and collaborative response from your team is incredibly powerful. It demonstrates a level of operational harmony that no amount of pitching can fake. Nailing your pitch and articulating your vision are extremely important but your process is ultimately what gets investors to write the check. The fundraising game today is won in the trenches of the details. 🙌🏼 #startups #fundraising #everywhereVC

Flo Health is the world's first femtech unicorn (yay) but it's also founded and funded by men (hmm) It's great that women's health is gaining more recognition, given the vast inequality in funding, research, and focus... BUT It also exposes a huge problem with the startup ecosystem. → Just 2% of global VC funding goes to women (WEF) → Women's presence on pitches is *neutral at best* and becomes negative when women don't embody typically female traits (Harvard) → Investors prefer pitches presented by men - when presented with two identical pitches, 68% funded the startup pitched by a man and 31% funded the exact same startup pitched by a woman (Harvard) → 83% of investment committees have no female members (British Business Bank) Women are discriminated against at all stages of the investment process. → Women are asked more negative questions around risk and worst-case scenarios, whereas men are asked about opportunity and opportunity (Harvard) → Women have to fight against preconceptions, we are judged more frequently, and held to higher standards (Yale) Ultimately, people with the most privilege raise the most money, and I count myself in that bucket as I am a white, privately educated female. → Just 0.5% of funding goes to black founders (WEF) → 79% of VC Seed funding for diverse founders (which is a tiny amount) goes to white women (BBG Ventures) There is SO much inequality in the startup world, and it's talked about but never taken seriously. Instead, female founders are assumed to be running businesses that aren't VC-backable, or that there just aren't enough of us. This is an uncomfortable topic, but the only way we can improve this system is to educate people about the huge inequality that exists in a sector awash with bonkers amounts of capital. Flexa #Startups #Fundraising #Inequality

Dear women founders, If you’ve ever dared to build something from scratch, you’ve probably heard these: “Why not stick to a safe job?” “Who’ll run the home if you start a company?” “Are you sure women can handle this kind of pressure?” India has the world’s third-largest startup ecosystem. Yet only 15% of Indian startups have a female founder. Shocking, isn’t it? Now before someone rolls their eyes and says – “There she goes, the feminist angle again...” If stating facts makes me a feminist, maybe check your funding portfolio – not my tone :) Because this isn’t an ambition problem. It’s an infrastructure problem. - Less than 10% of VC funding goes to women - 43% of women lacked support from family or spouse - Only 7% of unicorn leadership roles are held by women And investors still ask women about risks, while men get asked about scaling opportunities. And yet, she doesn’t just prove herself to the pitch room, She proves herself to the entire ecosystem. So, here’s what needs to change: VCs: Stop “diversity-washing” your portfolio and actually back outsiders Incubators: Build systems that serve people, not just outcomes Media: Stop spotlighting women only when it’s March 8th Families: Support your daughters even when the pitch flops Thankfully, some are flipping the script: WE Hub – India’s first women-focused incubator CXXO by Kalaari – Backed 100+ women CEOs Saha Fund – Investing only in women-led startups The Bottom line is – This isn’t a gender issue. It’s an innovation issue. It’s about unleashing the full potential of a nation. If we wish to position India as the #1 startup hub globally, we need to fund locally – without bias. Let’s raise the bar, together! What do you think?

The venture-capital world has a serial-entrepreneur problem, and it is gendered. New National Bureau of Economic Research (NBER) research comparing male and female co-founders of the same startups reveals disparities that cannot be explained by founder quality or ambition: → Women make up only 4% of founders with 3+ startups (vs 13.3% of all VC-backed founders) → After a startup failure women are 22.5% less likely to secure venture-capital backing for their next venture → Female serial entrepreneurs raise 53.3% less capital after failures and 24.6% less after successes → Men receive larger deals for founding experience regardless of outcomes. Women are penalized for failures and barely rewarded for successes → When an unrelated women-founded startup fails, it hurts funding prospects for all female founders. However, successes do not create positive spillovers.

Less than 2% of venture capital goes to women. Two percent. And if you’re a woman of colour, the number gets even smaller. I’ve seen it firsthand. When I started fundraising for indē wild, I walked into rooms where no one looked like me. Where I was questioned more, doubted more, and had to prove myself in ways my male counterparts didn’t. I came prepared with numbers, a solid business, a brand that already had a community behind it, and still, the skepticism was there. And yet, research proves that when women-led businesses get funded, they don’t just succeed. They outperform. According to Boston Consulting Group (BCG), women-founded companies generate more than twice as much revenue per dollar invested as those led by men. Forbes research shows that startups backed by First Round Capital performed 63% better when they had a female founder. Women-led businesses have also proven to be more resilient during economic downturns and foster higher employee engagement. Women aren’t lacking ideas or drive or results. We’re lacking access. That’s the part that needs to change. Funding shouldn’t be about who looks the part or who fits a certain mold, it should be about vision, strategy, and impact. Women don’t need more confidence. We need capital. And it’s time for investors to realize that betting on women isn’t just the right thing to do…it’s the smart thing to do. If you've been through this, I see you. If you're in a position to change this, I hope you do. #womeninbusiness #vc

Who said venture capital only has men? There are so many women killing it there, breaking all barriers. Salone Sehgal, the Founding General Partner of Lumikai Fund, is making news as India's first woman GP in the gaming and interactive media space. Lumikai Fund focuses on gaming content, platforms, tools, and cutting-edge technologies like AI. Salone's vision is to not just lead in this space but guide others towards diversity and innovation. What sets Salone and her team apart is their dedication to staying at the forefront of industry trends. They are researchers and leverage an extensive network of industry experts to make informed investment decisions. Here is what she believes: 1/ Collaboration is at the heart of success. The fund places a premium on strong partnerships with co-investors and fosters a culture of trust, making it a nurturing ecosystem for startups to thrive. 2/ She understands that while luck plays a role in venture investing, it's the ability to make insightful decisions and learn from experiences that truly counts. Salone Sehgal and Lumikai Fund are not just changing the game but transforming an entire industry. Her story is proof for aspiring women in venture capital to all those who dare to dream big. To learn more about how she is making it possible, tune in to the podcast, link in the comments below. #entreprenuership

Fraud in startups really pisses me off. It’s not a ‘mistake’. Not ‘growth hacking’ or some glorified part of the ‘hustle culture’. It’s fraud, plain and simple. And founders who commit fraud should be held accountable - including going to prison if that’s what the local laws dictate. Because what’s the alternative? Letting them walk free, free to start something new or even worse, become an advisor or angel investor to some other budding startup in the ecosystem. That’s ridiculous. It sends out the wrong signal. It violates the fundamental trust between founders, their teams, and their investors. Even worse, it poisons the well for the thousands of honest founders who are grinding every day, making it harder for them to raise capital and build great companies. And to be clear - fraud is NOT failure. They are two very separate things. We celebrate founders who take big risks, even when they fail. That’s just the nature of the startup world. But fraud IS fraud. Fraud is a choice. A deliberate act of choosing to lie to your partners, employees, customers and the investors who backed your vision. That kind of breach is unforgivable which is why I strongly believe that when proven fraud occurs, the consequences must be severe and unequivocal. Real accountability, rather than a mere slap on the wrist or quiet removal from a position. Because if founders can manipulate numbers on a massive scale and get away with it, we teach an entire generation of entrepreneurs that integrity is optional. We signal to the market that in our ecosystem, you can get away with it - a dangerous development, especially in markets like Southeast Asia, which are still building our global reputation. Venture capital runs on trust. As investors, founders, and ecosystem builders, we have a collective responsibility to hold those who break that trust accountable to the fullest extent of the law. No excuses. No exceptions.

Venture capitalists often keep quiet about problems within their portfolio - including fraud and wrongdoing. Not necessarily because they’re dishonest people, but because their incentives act on them like an invisible straightjacket. Whistleblowing on fraud or misconduct often runs directly counter to a fund manager’s incentives; even if it ultimately benefits their investors (LPs). Their performance metrics (TVPI) stand to suffer immediate damage from write-downs, which hamstrings their ability to raise future funds. VCs ability to invest in good companies rides on their reputation as ‘founder-friendly’, which is tarnished if they're seen to be disloyal to portfolio companies. The cherry on the cake - venture capital's expected failure rate provides perfect cover to subsequently categorize malfeasance as garden variety failure. With most LPs accepting that many investments will fail, it's much easier to quietly shut down troubled companies as "execution challenges" than to trigger the legal, financial, and reputational fallout of calling out fraud or wrongdoing. That’s why I think venture capital firm EVP’s decision to alert the authorities immediately upon discovering likely fraud at StrongRoom AI was a rare and admirable instance of moral courage. Far from being an instance of “narrow and selfish thinking”, as alleged by fellow investor Tyson & Blake, I believe EVP gave their LPs the best possible chance of recovering the $10.4 million invested into StrongRoom weeks earlier, at the expense of their own interests as fund managers. As I write in my latest op-ed for the The Australian Financial Review: “Moral clarity can come with a price: reputational damage, strained relationships and public scrutiny. As far as fund managers go, EVP is no ingénue. It looked into the harsh glare of the fallout and chose to act with integrity. For that, it has my respect.” #venturecapital #startups #fraud #whistleblower

It's easy to think that funding discrimination only impacts women or people of color. It doesn't, and here's why 👇 Founders often build companies to solve problems they've personally experienced. When women and people of color don't get funded, the problems faced by these groups don't get solved. This is evident in every industry from healthcare to education and beyond. Funding discrimination also prevents women and people of color from equally participating in the innovation of products/services that affect everyone. From the racist and sexist bias in AI to the development of everyday products within beauty, healthcare, transportation and beyond. Again, this is very well proven by research. Therefore, we should all care about the fact that female founders receive less than 2% of funding while Black founders receive less than 0,5% of funding (men and women combined!). It's not good enough - and the solution is not that hard. Right now, ~90% VC Partners are (mainly white) men. We've said it before, and last night we said it again on national TV: 50% of the population is not qualified to make decisions about 100% of the population. Camilla Cloëtta Falkenberg l Emma Due Bitz l Female Invest