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<site xmlns="com-wordpress:feed-additions:1">6646906</site> <itunes:explicit>no</itunes:explicit><itunes:subtitle>Insights for startup founders since 2005</itunes:subtitle><item>
<title>Weekly Firgun Newsletter – May 9 2025</title>
<link>https://www.vccafe.com/2025/05/09/weekly-firgun-newsletter-may-9-2025/</link>
<comments>https://www.vccafe.com/2025/05/09/weekly-firgun-newsletter-may-9-2025/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Fri, 09 May 2025 11:59:58 +0000</pubDate>
<category><![CDATA[Firgun]]></category>
<category><![CDATA[Alphabiome]]></category>
<category><![CDATA[ivc]]></category>
<category><![CDATA[Onebeat]]></category>
<category><![CDATA[Orca AI]]></category>
<category><![CDATA[Ox Security]]></category>
<category><![CDATA[proteantec]]></category>
<category><![CDATA[sett]]></category>
<category><![CDATA[Simpleclosure]]></category>
<category><![CDATA[Tripledot]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12074</guid>
<description><![CDATA[The original version of this newsletter was published on Linkedin. If you’re new here, the word “Firgun” (pronounced…]]></description>
<content:encoded><![CDATA[The original version of this newsletter was <a href="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-bcupe" data-type="link" data-id="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-bcupe">published on Linkedin</a>. 
If you’re new here, the word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person. It’s the opposite of “schadenfreude” (which stands for being happy for someone else’s misfortune). Firgun is all about genuinely feeling and expressing happiness, pride, or admiration for members of our community’s accomplishments, good fortune and wins. More about Firgun and why it matters on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a>: <a href="https://lnkd.in/dg2a86p">https://lnkd.in/dg2a86p</a>
My flights to Israel were cancelled next week following the Houti’s ballistic rocket attack on Ben Gurion Airport. The fact they succeeded, makes it less likely they will stop, despite Israel’s retaliation. And the cycle continues. President Trump said this week that signs of life have been received from 21 Israeli hostages held by Ha**s in G**a. They are being kept in tunnels, in terrible conditions. It’s also been said that there’s severe risk of losing the remains of the others forever if the war continues. As the world’s attention shifts, we must not forget them. Now more than ever, we must raise our voices and demand: #BringThemHome ?? Their freedom cannot wait.
In the wider tech world, <a href="https://www.linkedin.com/company/openai/">OpenAI</a> will continued to be <a href="https://www.cnbc.com/2025/05/05/openai-says-nonprofit-retain-control-of-company-bowing-to-pressure.html?_bhlid=ddb8978cb5e4d6c228f965ef7bbaa01b0165c714">controlled by its non-profit arm</a> and transitions to Public Benefit Corporation structure. But Elon Musk is not dropping his lawsuit. The company confirmed the <a href="https://www.bloomberg.com/news/articles/2025-05-06/openai-reaches-agreement-to-buy-startup-windsurf-for-3-billion?sref=d5SufZn9&_bhlid=11c447e2e3d97b0ed1ecfb1e9febbe3c646b09d2">acquisition of AI coding</a> tool <a href="https://www.linkedin.com/company/windsurf/">Windsurf</a> for $3bn, their largest acquisition to date. Speaking of AI coding, <a href="https://www.linkedin.com/company/anysphereinc/">Anysphere</a> the company behind <a href="https://www.linkedin.com/company/cursorllc/">Cursor</a> raised <a href="https://techcrunch.com/2025/05/04/cursor-is-reportedly-raising-funds-at-9-billion-valuation-from-thrive-a16z-and-accel/?">$900M at $9 billion valuation</a>. <a href="https://www.linkedin.com/company/doordash/">DoorDash</a> is buying <a href="https://www.linkedin.com/company/deliveroo/">Deliveroo</a> for <a href="https://www.cnbc.com/2025/05/06/doordash-to-buy-uk-food-delivery-firm-deliveroo-in-3point9-billion-deal.html?_bhlid=c5f50d513c9ddfa79756bb59851ed58b056696c7">$3.9 billion</a>. <a href="https://www.linkedin.com/company/google/">Google</a>‘s Gemini 2.5 Pro completed the entire <a href="https://techcrunch.com/2025/05/03/googles-gemini-has-beaten-pokemon-blue-with-a-little-help/">Pokémon Blue game</a>. Gemini 2.5 Pro <a href="https://developers.googleblog.com/en/gemini-2-5-pro-io-improved-coding-performance/">enhanced coding and video-to-code</a> features. The company also released a new Gemini feature for <a href="https://research.google/blog/making-complex-text-understandable-minimally-lossy-text-simplification-with-gemini/#">minimally-lossy text simplification</a>. Google also made <a href="https://techcrunch.com/2025/05/01/googles-ai-mode-gets-expanded-access-and-additional-functionality/#:~:text=Google%20is%20expanding%20access%20to,left%20off%20on%20a%20search.">significant expansions to its ‘AI mode’</a> to compete with <a href="https://www.linkedin.com/company/perplexity-ai/">Perplexity</a>. Watch out startups: Google also launched a Labs experiment to <a href="https://developers.googleblog.com/en/how-its-made-little-language-lessons-to-personalize-learning/">help people learn new languages</a>… <a href="https://www.linkedin.com/company/microsoft/">Microsoft</a> introduced next-generation <a href="https://blogs.windows.com/windowsexperience/2025/05/06/introducing-a-new-generation-of-windows-experiences/">Windows AI experiences</a>. As Apple fumbles their AI integration, Microsoft unveiled a new <a href="https://blogs.windows.com/devices/2025/05/06/introducing-all-new-surface-copilot-pcs-the-surface-pro-12-inch-and-surface-laptop-13-inch/">Surface Copilot+ PCs with AI capabilities</a>. On a related note, <a href="https://www.linkedin.com/in/williamhgates/">Bill Gates</a> said he will donate <a href="https://www.forbes.com/sites/tylerroush/2025/05/08/bill-gates-will-close-gates-foundation-in-2045-after-donating-99-of-his-fortune/?">99% of his $200 billion fortune to the poor.</a> <a href="https://www.linkedin.com/company/apple/">Apple</a> partnered with <a href="https://www.linkedin.com/company/anthropicresearch/">Anthropic</a> for <a href="https://techcrunch.com/2025/05/02/apple-and-anthropic-reportedly-partner-to-build-an-ai-coding-platform/">AI-powered “Vibe-Coding”</a> and <a href="https://www.linkedin.com/company/anthropicresearch/">Anthropic</a> also <a href="https://techcrunch.com/2025/05/01/anthropic-lets-you-connect-apps-to-claude/">launched App Integrations</a> to connect more apps to Claude a new <a href="https://www.anthropic.com/news/ai-for-science-program">AI Science program</a>. 94 year old Warren Buffet is <a href="https://www.moneymarketing.co.uk/news/warren-buffett-to-step-down-as-berkshire-hathaway-ceo/">stepping down</a> from <a href="https://www.linkedin.com/company/berkshire-hathaway/">Berkshire Hathaway</a> after 60 years as CEO. <a href="https://www.linkedin.com/company/krea-ai/">krea.ai</a> launched <a href="https://x.com/krea_ai/status/1917949632069456220">GPT-PAINT</a> – now you can prompt ChatGPT visually through edit marks, basic shapes, notes, and reference images. <a href="https://www.linkedin.com/company/midjourney/">Midjourney</a> launched <a href="https://docs.midjourney.com/hc/en-us/articles/36285124473997-Omni-Reference">Omni-Reference</a> for precise image creation. <a href="https://www.linkedin.com/company/amazon/">Amazon</a> introduced Vulcan, a <a href="https://www.wired.com/story/ai-lab-amazon-launches-vulcan-a-robot-that-can-feel/?_">robot with a sense of touch</a>. <a href="https://www.linkedin.com/company/mistralai/">Mistral AI</a> claims its <a href="https://techcrunch.com/2025/05/07/mistral-claims-its-newest-ai-model-delivers-leading-performance-for-the-price/">newest AI model delivers leading performance</a> for price. <a href="https://www.linkedin.com/company/cisco/">Cisco</a> introduced a <a href="https://venturecapital.createsend1.com/t/d-i-shrhrdl-l-a/">new quantum chip</a>, opens lab facility.
Theres’ a lot more to cover, but I gotta draw the line :-)
<h2 class="wp-block-heading" id="ember560">QUOTE OF THE WEEK</h2>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The real breakthrough comes not from having new ideas but from escaping from old ones.” – John Maynard Keynes
</blockquote>
<h2 class="wp-block-heading" id="ember562">NEW FUNDING ROUNDS</h2>
<ul class="wp-block-list">
<li>Big congrats <a href="https://www.linkedin.com/in/yarden-gross-4419a242/">Yarden Gross</a> and team <a href="https://www.linkedin.com/company/orca-ai/">Orca AI</a> on your $72.5M series B to drive autonomous Maritime shipping platform!</li>
<li>Well done <a href="https://www.linkedin.com/in/neatsun-ziv-ab7394/">Neatsun Ziv</a> and team <a href="https://www.linkedin.com/company/ox-security/">OX Security</a> on your $60M series to alert only on the most critical risks in the application development and deployment lifecycle!</li>
<li>Way to go <a href="https://www.linkedin.com/in/cohen-shai/">Shai Cohen</a> and team <a href="https://www.linkedin.com/company/proteantecs/">proteanTecs</a> on the $50M in new funding, valuing the company at over $600M, to track chip performance issues remotely!</li>
<li>Congratulations <a href="https://www.linkedin.com/in/yishai-ashlag/">Dr Yishai Ashlag</a> and team <a href="https://www.linkedin.com/company/onebeat4retail/">Onebeat</a> on your $15M series A for your AI inventory management solutions for retail!</li>
<li>Awesome news <a href="https://www.linkedin.com/in/amit-carmi-8aa047219/">Amit Carmi</a> and team <a href="https://www.linkedin.com/company/sett-ai/">Sett</a> on coming out of stealth with a $15M series A (and previous $12M in seed funding) to help mobile game studios with storytelling!</li>
<li>Mazel tov <a href="https://www.linkedin.com/in/dori-yona-b8369877/">Dori Yona</a> and team <a href="https://www.linkedin.com/company/simpleclosure/">SimpleClosure</a> on your $15M series A to help companies shut down gracefully!</li>
<li>Great milestone <a href="https://www.linkedin.com/in/dr-yaniv-altshuler/">Yaniv Altshuler</a> and team <a href="https://www.linkedin.com/company/alphabiome-ai/">Alphabiome.ai</a> on your $8M seed round to identify high potential biomarkers by decoding the microbiome!</li>
</ul>
<h2 class="wp-block-heading" id="ember571">EXITS</h2>
<ul class="wp-block-list">
<li>Congrats <a href="https://www.linkedin.com/in/oliver-takach-a5499b68/">Oliver Takach</a> and <a href="https://www.linkedin.com/in/shahar-glazner-29294654/">Shahar Glazner</a> on the acquisition of <a href="https://www.linkedin.com/company/keepalerting/">Keep</a> by <a href="https://www.linkedin.com/company/elastic-co/">Elastic</a> for an undisclosed sum!</li>
<li>Congratulations <a href="https://www.linkedin.com/in/simalevy/">Sima Levy</a> and team <a href="https://www.linkedin.com/company/actusdigital/">Actus Digital</a> on the acquisition by <a href="https://www.linkedin.com/company/liveu/">LiveU</a> for an undisclosed sum!</li>
</ul>
<h2 class="wp-block-heading" id="ember576">MISCELLANEOUS</h2>
<ul class="wp-block-list">
<li>Big respect <a href="https://www.linkedin.com/in/shiff/">Lior Shiff</a> and team <a href="https://www.linkedin.com/company/tripledot-studios/">Tripledot Studios</a> on the acquisition of <a href="https://www.linkedin.com/company/applovin/">AppLovin</a>‘s gaming Studios for <a href="https://www.ft.com/content/065a2712-8f79-4b0c-9aa3-eff9276d316e">$800 Million</a>!</li>
</ul>
<h2 class="wp-block-heading" id="ember579">APPOINTMENTS</h2>
<ul class="wp-block-list">
<li>Kudos <a href="https://www.linkedin.com/in/adi-gozes-06a16115/">Adi Gozes</a> on being appointed managing partner at <a href="https://www.linkedin.com/company/and-ventures/">AnD Ventures</a>!</li>
</ul>
<h2 class="wp-block-heading" id="ember582">LINKS FOR YOUR BROWSER</h2>
<h3 class="wp-block-heading" id="ember583">ISRAEL</h3>
<ol class="wp-block-list">
<li>Israel’s <a href="https://www.linkedin.com/company/lightricks/">Lightricks</a> <a href="https://www.calcalistech.com/ctechnews/article/r1ckyydxle">releases open-source model for AI video.</a></li>
<li><a href="https://www.calcalistech.com/ctechnews/article/rk65ifngge">“We’re looking at another year or two of pain and uncertainty before a new growth cycle begins”</a></li>
<li><a href="https://www.jewishnews.co.uk/emily-damari-says-pulitzer-board-failed-humanity-over-prize-to-writer-who-described-hostages-as-killers/">Freed hostage Emily Damari says Pulitzer Prize board ‘failed humanity’</a></li>
</ol>
<h3 class="wp-block-heading" id="ember585">GLOBAL</h3>
<ol class="wp-block-list">
<li><a href="https://finance.yahoo.com/news/nvidia-ceo-jensen-huang-sounds-035916833.html?s=31&guccounter=1">Nvidia CEO Jensen Huang Sounds Alarm As 50% Of AI Researchers Are Chinese</a>, Urges America To Reskill Amid ‘Infinite Game’</li>
<li><a href="https://www.cnbc.com/2025/05/08/warren-buffetts-top-advice-for-young-people.html">Warren Buffett’s top advice for young people helps you ‘learn how to be successful at life’—and has nothing to do with money</a></li>
</ol>
<h3 class="wp-block-heading" id="ember587">VC CAFE/ REMAGINE</h3>
<ol class="wp-block-list">
<li>Yesterday we shared our <a href="https://www.linkedin.com/company/remagine-ventures/">Remagine Ventures</a> newsletter including two new investments in Israeli stealth startups… I invite you to <a href="https://www.linkedin.com/pulse/remagine-ventures-monthly-pulse-remagine-ventures-z9uve">check it out</a> and subscribe!</li>
<li><a href="https://www.vccafe.com/2025/05/06/how-venture-capital-firms-are-changing-in-2025/">How Venture Capital Firms are changing in 2025</a> – including examples from <a href="https://www.linkedin.com/company/lightspeed-venture-partners/">Lightspeed</a>, <a href="https://www.linkedin.com/company/general-catalyst/">General Catalyst</a>, <a href="https://www.linkedin.com/company/sequoia/">Sequoia Capital</a> and more.</li>
<li><a href="https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/">The “AI First” Company – CEOs signal a new paradigm shift</a> – including the ‘leaked’ memos of the CEOs at <a href="https://www.linkedin.com/company/shopify/">Shopify</a>, <a href="https://www.linkedin.com/company/fiverr-com/">Fiverr</a>, <a href="https://www.linkedin.com/company/duolingo/">Duolingo</a> and <a href="https://www.linkedin.com/company/box/">Box</a></li>
</ol>
<h2 class="wp-block-heading" id="ember590">MEDIA OF THE WEEK</h2>
Israel ranked top in R&D spend as part of GDP in 2023 (sadly, I’m not sure it’s still the case)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFsk9znZ7_M2Q/article-inline_image-shrink_1500_2232/B4EZa0deQdHIAU-/0/1746784348021?e=1752105600&v=beta&t=1dmgvKDOANWQcLoXIeg6ktX4LygK-mKP_RW2wu0kgKs" alt="Article content"/></figure>
With the American economy facing uncertainty, IPOs stalled, exits delayed, and returns to LPs shrinking, traditional VC is under pressure. As a result, alternative models like PE are gaining traction. (<a href="https://www.ivc-online.com/Portals/0/RC/Investors%20Report%20(MAF)/IVC-GNY-KPMG_INVESTORS_REPORT_2024_final.pdf?_atscid=7_134353_307291760_3081353_0_T3tdxjzdwdahps8dpcp&ver=2025-03-02-140130-537">source</a>: <a href="https://www.linkedin.com/company/ivc-data-and-insights/">IVC Data and Insights</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGaRTlOlym-uw/article-inline_image-shrink_1500_2232/B4EZa0eGmkHkAc-/0/1746784512931?e=1752105600&v=beta&t=spHnj-8AWDRtnTMmAyQ8GSCGpT-xfzJPjDEJ7p4_WIM" alt="Article content"/></figure>
Global startup investment +5% YoY to $321B in 2024, 2.5x over 10 years (<a href="https://news.crunchbase.com/venture/venture-capital-growth-10-years-2014-2024-data/">source</a>: <a href="https://www.linkedin.com/company/crunchbase/">Crunchbase</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHaw2IaryRquA/article-inline_image-shrink_1000_1488/B4EZa0YQUNHcAU-/0/1746782979919?e=1752105600&v=beta&t=D9GCAi4X06vTbs71cJnobSZrZmkgFrAFEC5uxBxXcdo" alt="Article content"/></figure>
U.S. startups received 56% of global VC funding in 2024 (<a href="https://news.crunchbase.com/venture/venture-capital-growth-10-years-2014-2024-data/">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQE8PZ0HkA1e1A/article-inline_image-shrink_1500_2232/B4EZa0YlqfHcAU-/0/1746783067272?e=1752105600&v=beta&t=bk_emUVoH8fB3XApI6ykLoBaMMBl8E0YtPsGrznsbm8" alt="Article content"/></figure>
Who gets the most traffic in Generative AI? Your first guess is probably correct.
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQH9hnvd1rFoCw/article-inline_image-shrink_1500_2232/B4EZa0cINyHoAU-/0/1746783995295?e=1752105600&v=beta&t=9hmGqCk1CTgRJ4Oga2tK9BTvawUY6fMOkwLXNZGp6C0" alt="Article content"/></figure>
A Survey of AI Agent Protocols (<a href="https://media.licdn.com/dms/document/media/v2/D4E1FAQGEX5OgViSaHg/feedshare-document-pdf-analyzed/B4EZaXRu.lHYAY-/0/1746294740993?e=1747267200&v=beta&t=kZ3AjxGVZLywF378HjkBea5Tae_okm6C3LCe6jh_jWA">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGLlp8xG3vz3g/article-inline_image-shrink_1500_2232/B4EZa0b96KGcAU-/0/1746783953167?e=1752105600&v=beta&t=8mDyq4KsuUZi2b6Z-bLYWjSTwL1u3nXUDZK63DkcYkM" alt="Article content"/></figure>
The founding partner of <a href="https://www.linkedin.com/company/8vc/">8VC</a> on Q1 2025 State of Venture Update (<a href="https://www.alexkolicich.com/p/q1-2025-state-of-venture-update">source</a>).
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFwqpFd-2Dzkg/article-inline_image-shrink_1000_1488/B4EZa0X6.5HIAQ-/0/1746782892420?e=1752105600&v=beta&t=s-QN6p0BrRxd1IwXKnvTHkpr9DoYKU3-8L2IzfuaN70" alt="Article content"/></figure>
What are the service sectors most likely to get disrupted by AI? <a href="https://www.linkedin.com/company/venrock/">Venrock</a> research concludes that Legal, Insurance and Wealth Advisory are very vulnerable (<a href="https://www.venrock.com/insights/the-great-legacy-extinction-ais-20t-takeover-of-professional-services">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFVwDVCAAohGg/article-inline_image-shrink_1000_1488/B4EZa0cX5uHIAQ-/0/1746784059739?e=1752105600&v=beta&t=N0gnLyi6kmDj67bl52qAx_CbHvmX4KUZZeVYglRwsBo" alt="Article content"/></figure>
How much money do companies raise in each round? based on latest data (mostly US transactions) by <a href="https://www.linkedin.com/company/carta--/">Carta</a>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFhgGj7id-zKw/article-inline_image-shrink_1000_1488/B4EZa0c772HoAU-/0/1746784207257?e=1752105600&v=beta&t=qg1XKp_JCBOl8o00hKUZGuSZDg_AE-yB-dTmCwnhh98" alt="Article content"/></figure>
AI startups disrupting drug discovery. Research by <a href="https://www.linkedin.com/company/scale-venture-partners/">Scale Venture Partners</a> (<a href="https://www.scalevp.com/insights/the-future-of-biological-foundation-models-and-value-creation-in-ai-driven-drug-discovery/">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFnywHQ9QsbnQ/article-inline_image-shrink_1000_1488/B4EZa0dPVTHoAQ-/0/1746784286911?e=1752105600&v=beta&t=RXu6G9HIoOV_ht47E1dvvEQuwzbc6fXzPmlG0xjZVG4" alt="Article content"/></figure>
The companies enabling the humanoid robots to become a reality. <a href="https://www.linkedin.com/company/morgan-stanley/">Morgan Stanley</a>‘s ‘Humanoid 100’ list (<a href="https://advisor.morganstanley.com/john.howard/documents/field/j/jo/john-howard/The_Humanoid_100_-_Mapping_the_Humanoid_Robot_Value_Chain.pdf">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHj1r6VL0OkIw/article-inline_image-shrink_1500_2232/B4EZa0ecIDHMAc-/0/1746784601246?e=1752105600&v=beta&t=nCqE-oo3p5B5yP6ewLm-FtrHIITEEirA-fZyQsB9nu0" alt="Article content"/></figure>
Good luck to Yuval Raphael, Israel’s Eurovision 2025 representative, who survived the Nova Festival Massacre. Wish her luck as she is <a href="https://www.independent.co.uk/arts-entertainment/music/news/eurovision-2025-israel-open-letter-b2745466.html">receiving a lot of hate</a>.
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<div class="cs-embed cs-embed-responsive"><iframe title="Yuval Raphael - New Day Will Rise | Israel ?? | Official Music Video | #Eurovision2025" width="1200" height="900" src="https://www.youtube.com/embed/Q3BELu4z6-U?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
Thank you for reading. There’s a lot to celebrate in our “small” community. Keep on creating!]]></content:encoded>
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<post-id xmlns="com-wordpress:feed-additions:1">12074</post-id> <enclosure length="3512264" type="application/pdf" url="https://www.ivc-online.com/Portals/0/RC/Investors%20Report%20(MAF)/IVC-GNY-KPMG_INVESTORS_REPORT_2024_final.pdf?_atscid=7_134353_307291760_3081353_0_T3tdxjzdwdahps8dpcp&amp;ver=2025-03-02-140130-537"/><itunes:explicit>no</itunes:explicit><itunes:subtitle>The original version of this newsletter was published on Linkedin. If you&#8217;re new here, the word &#8220;Firgun&#8221; (pronounced&#8230;</itunes:subtitle><itunes:summary>The original version of this newsletter was published on Linkedin. If you&#8217;re new here, the word &#8220;Firgun&#8221; (pronounced&#8230;</itunes:summary><itunes:keywords>Firgun, Alphabiome, ivc, Onebeat, Orca AI, Ox Security, proteantec, sett, Simpleclosure, Tripledot</itunes:keywords></item>
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<title>The “AI-First” Company: CEOs Signal a Paradigm Shift</title>
<link>https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/</link>
<comments>https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Wed, 07 May 2025 10:39:41 +0000</pubDate>
<category><![CDATA[AI Agents]]></category>
<category><![CDATA[Generative AI]]></category>
<category><![CDATA[AI]]></category>
<category><![CDATA[Box]]></category>
<category><![CDATA[ceos]]></category>
<category><![CDATA[Fiverr]]></category>
<category><![CDATA[jobs]]></category>
<category><![CDATA[Mark Zuckerberg]]></category>
<category><![CDATA[microsoft]]></category>
<category><![CDATA[Shopify]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12066</guid>
<description><![CDATA[Mark Zuckerberg predicts that AI will write most of Meta’s code in 12 to 18 moths. Microsoft’s CEO…]]></description>
<content:encoded><![CDATA[Mark Zuckerberg predicts that AI will write most of Meta’s code in 12 to 18 moths. Microsoft’s CEO Satya Nadella said that AI is already writing 20%-30% of Microsoft’s code… but it’s not just coding that is getting automated. According to Goldman Sachs, <a href="https://www.cnbc.com/2023/03/28/ai-automation-could-impact-300-million-jobs-heres-which-ones.html" data-type="link" data-id="https://www.cnbc.com/2023/03/28/ai-automation-could-impact-300-million-jobs-heres-which-ones.html">300 million jobs are at risk</a> of being automated by AI, a United Nations report estimates that AI could disrupt over 40% of roles globally and <a href="https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america" data-type="link" data-id="https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america">McKinsey estimate</a>s that 30 percent of hours currently worked across the US economy could be automated.
A clear trend is emerging among major tech companies: a move towards becoming “AI-first.” This shift, heralded by CEOs like those at Duolingo, Shopify, and Fiverr, isn’t just about integrating AI tools; it represents a fundamental rethinking of how businesses operate, with significant consequences for the workforce and potentially the investment landscape.
<h2 class="wp-block-heading" id="high-profile-ceos-are-publicly-stating-their-companies-are-ai-first"> High Profile CEOs are publicly stating their companies are ‘AI-First’</h2>
Duolingo is explicitly betting on AI as a platform shift, similar to the move to mobile in 2012. CEO Luis von Ahn announced in a companywide email that Duolingo would become “AI-first”. This means rethinking much of how they work, as minor tweaks to systems designed for humans won’t be sufficient. As part of this strategy, Duolingo plans to gradually stop using contractors for work that AI can handle.
Here’s the memo he shared with employees:
<figure class="wp-block-image size-large"><img data-recalc-dims="1" fetchpriority="high" decoding="async" width="1006" height="1024" data-attachment-id="12068" data-permalink="https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/gpo_ik7xyaazzgp/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?fit=1460%2C1486&ssl=1" data-orig-size="1460,1486" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Gpo_iK7XYAAZZgP" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?fit=295%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?fit=1006%2C1024&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP-1006x1024.png?resize=1006%2C1024&ssl=1" alt="" class="wp-image-12068" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=1006%2C1024&ssl=1 1006w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=295%2C300&ssl=1 295w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=768%2C782&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=80%2C80&ssl=1 80w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=380%2C387&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=800%2C814&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?resize=1160%2C1181&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Gpo_iK7XYAAZZgP.png?w=1460&ssl=1 1460w" sizes="(max-width: 1006px) 100vw, 1006px" /></figure>
AI use will also become a factor in hiring and performance reviews, and headcount will only be approved if a team cannot automate more of its work. While von Ahn states the move is not about replacing employees (“Duos”) but about removing bottlenecks to allow them to focus on creative work and real problems, it <a href="https://www.theverge.com/news/657594/duolingo-ai-first-replace-contract-workers" data-type="link" data-id="https://www.theverge.com/news/657594/duolingo-ai-first-replace-contract-workers">undeniably impacts the future of contracted work</a> and the criteria for internal roles. Duolingo sees AI as crucial for scaling content creation and building new features like Video Call, which were previously impossible, bringing them closer to teaching as well as human tutors.
Shopify CEO Tobi Lütke has implemented a new hiring policy that prioritises AI over human hires. In a memo shared publicly, Lütke stated that teams must demonstrate why their needs cannot be fulfilled using AI before requesting additional resources. This approach is part of Shopify’s commitment to integrating AI into its operations. This shift follows significant layoffs at Shopify in recent years, including 20% of staff the year prior and quiet layoffs in customer service. While some see this strategy as potentially extreme or a PR stunt, it reflects the growing adoption of AI for efficiency.
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<div class="embed-twitter"><blockquote class="twitter-tweet" data-width="550" data-dnt="true">I heard this internal memo of mine is being leaked right now, so here it is: <a href="https://t.co/Qn12DY7TFF">pic.twitter.com/Qn12DY7TFF</a>— tobi lutke (@tobi) <a href="https://twitter.com/tobi/status/1909231499448401946?ref_src=twsrc%5Etfw">April 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</div></figure>
Micha Kaufman, founder and CEO of Fiverr, issued a stark warning about the “coming AI jobocalypse”. His message to staff and freelancers is clear: “<a href="https://www.entrepreneur.com/business-news/fiverr-ceo-says-ai-will-take-your-job-heres-what-to-do/491198" data-type="link" data-id="https://www.entrepreneur.com/business-news/fiverr-ceo-says-ai-will-take-your-job-heres-what-to-do/491198">AI is coming for your job</a>“. He explicitly states this applies to a wide range of professions, including programmers, designers, product managers, data scientists, lawyers, customer support representatives, salespeople, and finance personnel. Kaufman emphasizes that tasks previously considered ‘easy’ will disappear, ‘hard tasks’ will become the new easy, and ‘impossible tasks’ will become the new hard.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
You must understand that what was once considered an ‘easy task’ will no longer exist; what were considered ‘hard tasks’ will be the new easy, and what were considered ‘impossible tasks’ will be the new hard.
<cite>Micha Kaufman, Fiverr CEO</cite></blockquote>
To survive this “AI onslaught,” he suggests becoming exceptional and staying afloat by mastering the latest AI in your domain, studying prompt engineering, proactively pitching ideas, and creating opportunities rather than waiting for them.
<div class="wp-block-image">
<figure class="aligncenter size-large"><img data-recalc-dims="1" decoding="async" width="565" height="1024" data-attachment-id="12067" data-permalink="https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/whatsapp-image-2025-05-07-at-07-54-27-1/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?fit=799%2C1448&ssl=1" data-orig-size="799,1448" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="WhatsApp Image 2025-05-07 at 07.54.27 (1)" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?fit=166%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?fit=565%2C1024&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1-565x1024.jpeg?resize=565%2C1024&ssl=1" alt="" class="wp-image-12067" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?resize=565%2C1024&ssl=1 565w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?resize=166%2C300&ssl=1 166w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?resize=768%2C1392&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?resize=380%2C689&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-05-07-at-07.54.27-1.jpeg?w=799&ssl=1 799w" sizes="(max-width: 565px) 100vw, 565px" /><figcaption class="wp-element-caption">Read Micha’s <a href="https://x.com/michakaufman/status/1909610844008161380" data-type="link" data-id="https://x.com/michakaufman/status/1909610844008161380">full memo on X</a></figcaption></figure></div>
<h2 class="wp-block-heading" id="the-proof-is-not-in-the-pudding-yet">The Proof is not in the pudding… yet</h2>
While companies are racing to adopt AI and restructure operations around it, the actual economic impact of AI remains limited. In a recent experiment by Carnegie Mellon called <a href="https://arxiv.org/pdf/2412.14161" data-type="link" data-id="https://arxiv.org/pdf/2412.14161">TheAgentCompany</a>, advanced AI agents placed in a virtual startup environment were tested for task performance. The result? The top agent (based on Claude’s 3.5 model) completed only 24% of its assigned tasks. Researchers concluded there’s still a large gap between AI’s benchmark performance and its ability to carry out real-world jobs reliably.
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="537" data-attachment-id="12069" data-permalink="https://www.vccafe.com/2025/05/07/the-ai-first-company-ceos-signal-a-paradigm-shift/screenshot-2025-05-07-at-11-04-02/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?fit=1202%2C630&ssl=1" data-orig-size="1202,630" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Screenshot 2025-05-07 at 11.04.02" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?fit=300%2C157&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?fit=1024%2C537&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02-1024x537.png?resize=1024%2C537&ssl=1" alt="" class="wp-image-12069" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=1024%2C537&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=300%2C157&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=768%2C403&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=380%2C199&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=800%2C419&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?resize=1160%2C608&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-07-at-11.04.02.png?w=1202&ssl=1 1202w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">“Overall, the agent performance on TheAgentCompany is still low and a majority of tasks are failed” (<a href="https://arxiv.org/pdf/2412.14161" data-type="link" data-id="https://arxiv.org/pdf/2412.14161">source</a>)</figcaption></figure>
Much of the current push feels driven more by pressure to appear innovative and cut costs than by proven AI productivity gains. For many businesses, sweeping AI integration without clear ROI could do more harm than good. Another approach that is rising is the hybrid approach: rather than AI replacing people (and jobs) it’s seen as a power multiplier. 
Aaron Levie, CEO at Box, sees a middle ground, where AI is turbocharging employees with AI Agents. He shared an internal memo publicly which describing how enterprises going “AI-first” will see AI Agents working 24/7 across the business. This means knowledge work, historically confined to specific hours, will get done continuously, accelerating business decisions and enabling more effective outcomes. He notes that he personally uses AI agents to kick off research tasks in the evening and wakes up to the work completed, compressing hours of work. This concept implies that “knowledge work stops sleeping”.
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<div class="embed-twitter"><blockquote class="twitter-tweet" data-width="550" data-dnt="true">Here’s what I shared with Box internally last night about being an AI-first company. We’re focused on transforming how we work with AI to ultimately move faster, iterate more quickly, get out of busy work, and serve customers better. <a href="https://t.co/1PH74k4Hfy">pic.twitter.com/1PH74k4Hfy</a>— Aaron Levie (@levie) <a href="https://twitter.com/levie/status/1917970814441607623?ref_src=twsrc%5Etfw">May 1, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</div></figure>
<h2 class="wp-block-heading" id="uncharted-territory-ahead">Uncharted territory ahead</h2>
There’s no doubt in my mind that implications of rising automation for jobs are profound. The warnings from CEOs like Kaufman and the policies at Duolingo and Shopify underscore the potential for AI to replace tasks and even roles, particularly those that are repetitive or considered ‘easy’. 
For Venture Capital, this pervasive shift implies changes in the landscape for investment. The need for new infrastructure and tools for AI agents, and the potential for complex infrastructure around distilling large AI models into more efficient forms all point to potential areas of significant growth and investment. 
In conclusion, the “AI-first” announcements from companies like Duolingo, Shopify, and Fiverr are not isolated events but reflections of a broader, accelerating trend. Companies are fundamentally restructuring operations around AI capabilities, leading to significant implications for the workforce, demanding adaptation and upskilling. While this presents challenges regarding job displacement, it also creates opportunities for those who can effectively work with and build AI technologies. For investors, this transformation signals a need to understand how AI is redefining industries and identify the technologies and business models that will thrive in this new “AI-first” era.]]></content:encoded>
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<slash:comments>0</slash:comments>
<post-id xmlns="com-wordpress:feed-additions:1">12066</post-id> <enclosure length="2145769" type="application/pdf" url="https://arxiv.org/pdf/2412.14161"/><itunes:explicit>no</itunes:explicit><itunes:subtitle>Mark Zuckerberg predicts that AI will write most of Meta&#8217;s code in 12 to 18 moths. Microsoft&#8217;s CEO&#8230;</itunes:subtitle><itunes:summary>Mark Zuckerberg predicts that AI will write most of Meta&#8217;s code in 12 to 18 moths. Microsoft&#8217;s CEO&#8230;</itunes:summary><itunes:keywords>AI Agents, Generative AI, AI, Box, ceos, Fiverr, jobs, Mark Zuckerberg, microsoft, Shopify</itunes:keywords></item>
<item>
<title>How Venture Capital Firms are Changing in 2025</title>
<link>https://www.vccafe.com/2025/05/06/how-venture-capital-firms-are-changing-in-2025/</link>
<comments>https://www.vccafe.com/2025/05/06/how-venture-capital-firms-are-changing-in-2025/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Tue, 06 May 2025 15:04:09 +0000</pubDate>
<category><![CDATA[Private equity]]></category>
<category><![CDATA[venture capital]]></category>
<category><![CDATA[A16Z]]></category>
<category><![CDATA[andreessen horowitz]]></category>
<category><![CDATA[general catalyst]]></category>
<category><![CDATA[insight ventures]]></category>
<category><![CDATA[lightspeed venture partner]]></category>
<category><![CDATA[Sequoia Capital]]></category>
<category><![CDATA[thrive capital]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12060</guid>
<description><![CDATA[Venture Capital as an asset class is in a tough spot. Based on the Q1 2025 Pitchbook-NVCA Venture…]]></description>
<content:encoded><![CDATA[Venture Capital as an asset class is in a tough spot. Based on the <a href="https://pitchbook.com/news/reports/q1-2025-pitchbook-nvca-venture-monitor" data-type="link" data-id="https://pitchbook.com/news/reports/q1-2025-pitchbook-nvca-venture-monitor">Q1 2025 Pitchbook-NVCA Venture Monitor</a>, Venture fundraising in Q1 2025 dropped sharply, with only 87 funds raising $10B, as capital concentrates in top geographies and LPs increasingly back fewer, more established managers. With exits stalled and liquidity constrained, the venture landscape appears to be recalibrating around a new baseline of selectivity and caution. I covered some of these struggles in Jan 2025 in my post “<a href="https://www.vccafe.com/2025/01/09/the-concentration-of-venture-capital-money-in-2025/" data-type="link" data-id="https://www.vccafe.com/2025/01/09/the-concentration-of-venture-capital-money-in-2025/">The concentration of venture capital in 2025</a>“.
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="441" data-attachment-id="12063" data-permalink="https://www.vccafe.com/2025/05/06/how-venture-capital-firms-are-changing-in-2025/whatsapp-image-2025-04-26-at-11-59-12-3/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?fit=1170%2C504&ssl=1" data-orig-size="1170,504" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="WhatsApp Image 2025-04-26 at 11.59.12 (3)" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?fit=300%2C129&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?fit=1024%2C441&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3-1024x441.jpeg?resize=1024%2C441&ssl=1" alt="" class="wp-image-12063" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=1024%2C441&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=300%2C129&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=768%2C331&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=380%2C164&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=800%2C345&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?resize=1160%2C500&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/WhatsApp-Image-2025-04-26-at-11.59.12-3.jpeg?w=1170&ssl=1 1170w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Fewer funds are raising fresh capital in Q1 2025, based on NVCA data (<a href="https://pitchbook.com/news/reports/q1-2025-pitchbook-nvca-venture-monitor" data-type="link" data-id="https://pitchbook.com/news/reports/q1-2025-pitchbook-nvca-venture-monitor">source</a>)</figcaption></figure>
As a result, or perhaps, as a natural evolution of the asset class, the venture capital landscape is currently undergoing significant change, moving beyond the traditional model to embrace new strategies and structures. Major firms are leading this evolution starting in the valley, but I suspect we’ll start seeing the change in Europe too.
One key shift is VC firms becoming Registered Investment Advisors (RIAs). This regulatory status allows firms like Lightspeed Venture Partners, Sequoia Capital, Andreessen Horowitz, and General Catalyst to invest a greater proportion of their capital (more than 20%) into a broader range of assets beyond just direct startup equity, such as public and secondary shares, and even cryptocurrencies. Andreessen Horowitz became an RIA in 2019, and Lightspeed recently completed the process, following suit. Lightspeed, for example, is now dedicating more capital and has hired staff specifically for <a href="https://www.ft.com/content/81ecfd39-ae5b-44af-9a13-a92c40f38a2f" data-type="link" data-id="https://www.ft.com/content/81ecfd39-ae5b-44af-9a13-a92c40f38a2f">secondary market strategies</a>.
Firms are increasingly adopting private equity-style strategies, including serial acquisitions or “roll-ups”. The focus is shifting from solely investing to actively creating and acquiring companies, often with a strong emphasis on using AI to transform these businesses. General Catalyst, now preferring the title “global investment and transformation company”, explicitly supports “A.I.-enabled roll-ups”, acquires larger stakes in startups, and even creates AI-native companies in-house.
<div class="wp-block-image">
<figure class="aligncenter size-full"><img data-recalc-dims="1" loading="lazy" decoding="async" width="800" height="881" data-attachment-id="12061" data-permalink="https://www.vccafe.com/2025/05/06/how-venture-capital-firms-are-changing-in-2025/attachment/1746482522931/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?fit=800%2C881&ssl=1" data-orig-size="800,881" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="1746482522931" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?fit=272%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?fit=800%2C881&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?resize=800%2C881&ssl=1" alt="" class="wp-image-12061" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?w=800&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?resize=272%2C300&ssl=1 272w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?resize=768%2C846&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/1746482522931.jpeg?resize=380%2C418&ssl=1 380w" sizes="auto, (max-width: 800px) 100vw, 800px" /></figure></div>
Thrive Capital is another firm <a href="https://archive.ph/uZPWB" data-type="link" data-id="https://archive.ph/uZPWB">adopting some private equity strategies</a> and is also an RIA. Earlier this week, Thrive launched a new vehicle called Thrive Holdings. This entity is specifically designed to start and acquire companies that can benefit from AI, with the intention of holding onto these assets for a long time, potentially “forever”. Thrive plans to focus heavily on operating these businesses, leveraging its team of software engineers and ties to AI companies like OpenAI. Thrive is raising about $1 billion for this initial effort, with a focus on transforming “everyday industries”.
Beyond investment strategies, firms are also diversifying into new business areas like wealth management (General Catalyst, Andreessen Horowitz) and, in a highly unusual move, General Catalyst is in the process of acquiring a healthcare system in Ohio. <a href="https://techcrunch.com/2024/06/19/general-catalyst-india-venture-highway/">General Catalyst has also purchased smaller venture firms.</a>
Looking ahead, there is speculation that some of these heavyweight firms may consider an Initial Public Offering (IPO), following the path of private equity giants like Blackstone and KKR. <a href="https://techcrunch.com/2025/02/28/general-catalyst-is-reportedly-weighing-a-potential-ipo/" data-type="link" data-id="https://techcrunch.com/2025/02/28/general-catalyst-is-reportedly-weighing-a-potential-ipo/">General Catalyst is reportedly weighing a potential IPO</a>, according to multiple sources. While other large VC firms haven’t yet taken official steps, an IPO is seen as a potential next phase for the industry.
These changes are driven by the overall growth and increasing competition within the VC landscape, as well as the perceived transformative potential of artificial intelligence. The venture capital industry is clearly in a period of significant evolution.]]></content:encoded>
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<post-id xmlns="com-wordpress:feed-additions:1">12060</post-id> </item>
<item>
<title>Weekly Firgun Newsletter – May 2 2025</title>
<link>https://www.vccafe.com/2025/05/02/weekly-firgun-newsletter-may-2-2025/</link>
<comments>https://www.vccafe.com/2025/05/02/weekly-firgun-newsletter-may-2-2025/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Fri, 02 May 2025 11:21:55 +0000</pubDate>
<category><![CDATA[Firgun]]></category>
<category><![CDATA[AI]]></category>
<category><![CDATA[Factify]]></category>
<category><![CDATA[Hardvard]]></category>
<category><![CDATA[Independence Day]]></category>
<category><![CDATA[Israel]]></category>
<category><![CDATA[Israeli startups]]></category>
<category><![CDATA[Labrador health]]></category>
<category><![CDATA[LayerX]]></category>
<category><![CDATA[lightrun]]></category>
<category><![CDATA[microsoft]]></category>
<category><![CDATA[Nyx]]></category>
<category><![CDATA[Supersocial]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12056</guid>
<description><![CDATA[The original version of this newsletter was published on Linkedin. If you’re new here, the word “Firgun” (pronounced…]]></description>
<content:encoded><![CDATA[The original version of this newsletter was <a href="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-g1e8e/" data-type="link" data-id="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-g1e8e/">published on Linkedin</a>. 
If you’re new here, the word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person. It’s the opposite of “schadenfreude” (which stands for being happy for someone else’s misfortune). Firgun is all about genuinely feeling and expressing happiness, pride, or admiration for members of our community’s accomplishments, good fortune and wins. More about Firgun and why it matters on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a>: <a href="https://lnkd.in/dg2a86p">https://lnkd.in/dg2a86p</a>
Happy 77th Independence anniversary to Israel —Yom Ha’atzmaut ??. It’s a moment of celebration and pride for a nation built on resilience, innovation, and unity. But the joy comes just a day after Yom HaZikaron, Israel’s Memorial Day, a solemn time to honour fallen soldiers and victims of terror. This powerful transition from grief to celebration is marred by the 59 Israeli hostages still held in Gaza. We must #BringThemHome ??
Israeli startups raised $531M in April 2025 across 20 announced rounds. April was also the month of Israel’s biggest exit of all time, <a href="https://www.linkedin.com/company/wizsecurity/">Wiz</a>, which made multi billion exits look small in comparison. As Israel celebrates it’s <a href="https://www.calcalistech.com/ctechnews/article/sy1gqljexg">77th anniversary</a>, it’s clear that Israeli startups are resilient and here to stay. But nevertheless, it’s a challenging period by all means, domestically (security, political, economic, talent flows) and globally (tariffs, VC slowdown).
In the wider tech world, <a href="https://www.linkedin.com/company/apple/">Apple</a> vs. <a href="https://www.linkedin.com/company/epic-games/">Epic Games</a> legal battle took a meaningful turn this week as <a href="https://mobiledevmemo.com/tim-cook-chose-poorly/">Apple was forced to drop its fees on out of the app store transactions</a>, great news for app developers worldwide. <a href="https://www.linkedin.com/company/amazon/">Amazon</a> launched Nova Premier, the company’s most advanced AI model yet — designed to both handle complex tasks and also act as a “teacher” to fine-tune smaller models to match its capabilities. <a href="https://www.linkedin.com/company/anthropicresearch/">Anthropic</a> released <a href="https://www.anthropic.com/news/integrations">Integrations</a>, allowing Claude to connect with remote MCPs to integrate additional tools — alongside new research capabilities like web support. <a href="https://www.linkedin.com/company/microsoft/">Microsoft</a> just launched three new reasoning-focused, open-weights models in its Phi family — which outperform larger rivals at complex reasoning tasks while being small enough to run on phones and laptops. According to CEO <a href="https://www.linkedin.com/in/satyanadella/">Satya Nadella</a>, <a href="https://www.cnbc.com/2025/04/29/satya-nadella-says-as-much-as-30percent-of-microsoft-code-is-written-by-ai.html?">30% of the code at MSFT</a> is AI generated! <a href="https://www.linkedin.com/company/openai/">OpenAI</a> adds shopping and is rumoured to announce big partnership with <a href="https://www.linkedin.com/company/shopify/">Shopify</a>. Forecasts <a href="https://www.theinformation.com/articles/openai-forecasts-revenue-topping-125-billion-2029-agents-new-products-gain?offer=ai-coverage-2025-299-bc-modal-lead&utm_source=substack&utm_medium=email">Revenue Topping $125 Billion in 2029</a> as Agents, New Products Gain. <a href="https://www.linkedin.com/company/google/">Google</a> places <a href="https://www.bloomberg.com/news/articles/2025-04-30/google-places-ads-inside-chatbot-conversations-with-ai-startups?embedded-checkout=true">ads inside chatbot conversations</a> with AI startups. The company also updated its <a href="https://deepmind.google/discover/blog/music-ai-sandbox-now-with-new-features-and-broader-access/">music AI sandbox</a>. <a href="https://www.linkedin.com/company/duolingo/">Duolingo</a> CEO said that the company will be ‘AI first’ and that it plans to replace contractors with AI. The company already launched <a href="https://techcrunch.com/2025/04/30/duolingo-launches-148-courses-created-with-ai-after-sharing-plans-to-replace-contractors-with-ai/?">148 courses powered by AI</a>. <a href="https://www.linkedin.com/company/meta/">Meta</a> launches new standalone Meta AI social network before chatgpt becomes one. <a href="https://www.linkedin.com/company/ibm/">IBM</a> is investing $150bn in US manufacturing over the next five years.
Here’s the latest in Chinese AI:
<ul class="wp-block-list">
<li><a href="https://www.reuters.com/world/china/chinas-xi-calls-self-sufficiency-ai-development-amid-us-rivalry-2025-04-26/">China’s Xi pushes for AI self-sufficiency</a></li>
<li><a href="https://www.linkedin.com/company/chinese-alibaba-group/">Alibaba Group</a> launches <a href="https://techcrunch.com/2025/04/28/alibaba-unveils-qwen-3-a-family-of-hybrid-ai-reasoning-models/">Qwen 3 reasoning models</a> – claims that they match or outperform OpenAI and Google in some cases</li>
<li><a href="https://www.linkedin.com/company/huawei/">Huawei</a> challenges Nvidia with <a href="https://www.hpcwire.com/2025/04/29/huawei-challenges-nvidias-ai-dominance-with-new-chip/#">new AI chip</a></li>
<li><a href="https://www.linkedin.com/company/xiaomi-technology/">Xiaomi Technology</a> unveils <a href="https://siliconangle.com/2025/04/30/xiaomi-releases-new-mimo-7b-models-deepseek-upgrades-prover-math-ai/">open-source AI reasoning model MiMo</a>, joining other Chinese tech leaders hoping to make a splash in the burgeoning AI field endorsed by Beijing</li>
<li><a href="https://www.linkedin.com/company/deepseekaiglobal/">DeepSeek</a>‘s <a href="https://epium.com/deepseek-prover-v2-neural-theorem-proving-benchmark/">Prover-V2 debuts</a>, designed to solve math-related problems.</li>
</ul>
<h2 class="wp-block-heading" id="ember2887">QUOTE OF THE WEEK</h2>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“For Israel was not created in order to disappear – Israel will endure and flourish. It is the child of hope and the home of the brave. It can neither be broken by adversity nor demoralized by success. It carries the shield of democracy and it honors the sword of freedom; and no area of the world has ever had an overabundance of democracy and freedom”
<cite>President JFK (speech in August 1960)</cite></blockquote>
(<a href="https://www.presidency.ucsb.edu/documents/speech-senator-john-f-kennedy-zionists-america-convention-statler-hilton-hotel-new-york-ny#:~:text=For%20Israel%20was%20not%20created,adversity%20nor%20demoralized%20by%20success.">source</a>)
<h2 class="wp-block-heading" id="ember2890">NEW FUNDING ROUNDS</h2>
<ul class="wp-block-list">
<li>Congratulations <a href="https://www.linkedin.com/in/ilan-peleg-5a31396b/">Ilan Peleg</a> and team <a href="https://www.linkedin.com/company/lightruntech/">Lightrun</a> on the $70M series B to bring AI-powered real-time remediation to enterprise software!</li>
<li>Way to go <a href="https://www.linkedin.com/in/or-eshed/">Or Eshed</a> and team <a href="https://www.linkedin.com/company/layerx-security/">LayerX Security</a> on your $11M series A extension as browser security becomes the new front line in enterprise defence!</li>
<li>Mazel tov <a href="https://www.linkedin.com/in/matan-gavish-6473402a/">Matan Gavish</a> and team <a href="https://www.linkedin.com/company/factifyinc/">Factify</a> on coming out of stealth with $10.3M in seed funding to enhance the security and usability of digital documents (and maybe replace PDFs!)</li>
<li>Kudos <a href="https://www.linkedin.com/in/sibulkin/">Steve Sibulkin</a> and team <a href="https://www.linkedin.com/company/biolumic-limited/">BioLumic</a> on your $8.3M series B extension to accelerate a new category of non-GMO seed traits!</li>
</ul>
<h2 class="wp-block-heading" id="ember2896">EXITS</h2>
<ul class="wp-block-list">
<li>Kudos <a href="https://www.linkedin.com/in/yankovitchgil/">Gili Yankovitch</a> and team <a href="https://www.linkedin.com/company/nyx-software-security-solutions/">Nyx Security</a> on the acquisition by <a href="https://www.linkedin.com/company/upwindsecurity/">Upwind Security</a> to expand into application runtime security! The acquisition sum was not disclosed.</li>
<li>Well done <a href="https://www.linkedin.com/in/yoav-kessler-5420bb91/">Yoav Kessler</a> and team <a href="https://www.linkedin.com/company/labrador-health/">Labrador Health</a> on the acquisition by <a href="https://www.linkedin.com/company/www-healthy-io/">Healthy.io</a> for an undisclosed sum!</li>
<li>Congratulations <a href="https://www.linkedin.com/in/yonatanrf/">Yonatan Raz-Fridman</a> and team <a href="https://www.linkedin.com/company/supersocialinc/">Supersocial (acquired by Super League – NASDAQ: SLE)</a> on the acquisition by <a href="https://www.linkedin.com/company/superleagueenterprise/">Super League</a> for an undisclosed sum</li>
</ul>
<h2 class="wp-block-heading" id="ember2901">LINKS FOR YOUR BROWSER</h2>
<h3 class="wp-block-heading" id="ember2902">ISRAEL</h3>
<ol class="wp-block-list">
<li><a href="https://www.calcalistech.com/ctechnews/article/923yvb6hw">The 50 most promising Israeli startups</a> – the annual ranking by <a href="https://www.linkedin.com/company/calcalist/">Calcalist ???????</a></li>
<li><a href="https://www.viola-group.com/violanotes/from-payments-to-personalization-how-fintech-is-reshaping-e-commerce/#">How fintech is reshaping ecommerce</a> – interesting study by <a href="https://www.linkedin.com/company/violaventures/">Viola Ventures</a></li>
<li>The final report on the <a href="https://www.harvard.edu/wp-content/uploads/2025/04/FINAL-Harvard-ASAIB-Report-4.29.25.pdf">Presidential Task Force on Combating Antisemitism and Anti-Israeli Bias</a> by <a href="https://www.linkedin.com/school/harvard-university/">Harvard University</a> – spoiler: there’s a lot of <a href="https://x.com/chalavyishmael/status/1917416248918298698?s=48&t=qx_2YP2_W_UEvY4QKvtXYQ">institutionalised antisemitism</a></li>
</ol>
<h3 class="wp-block-heading" id="ember2904">GLOBAL</h3>
<ol class="wp-block-list">
<li><a href="https://www.cbinsights.com/research/report/artificial-intelligence-top-startups-2025/?">The top 100 AI startups</a> according to <a href="https://www.linkedin.com/company/cb-insights/">CB Insights</a></li>
<li><a href="https://hbr.org/2025/04/how-people-are-really-using-gen-ai-in-2025">How People Are Really Using Gen AI in 2025</a> – update to the 2024 study by <a href="https://www.linkedin.com/company/harvard-business-review/">Harvard Business Review</a></li>
<li><a href="https://www.nytimes.com/2025/02/20/technology/ai-silicon-valley-start-ups.html">AI is changing how Silicon Valley builds startups</a> – a spotlight on <a href="https://www.linkedin.com/company/gamma-app/">Gamma</a> – I go in depth on this in my ‘Nano Unicorns’ piece on VC Cafe (below)</li>
</ol>
<h3 class="wp-block-heading" id="ember2906">VC CAFE</h3>
<ol class="wp-block-list">
<li><a href="https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/">Nano Unicorns in the Making</a> – how AI native startups are scaling revenues with tiny teams – by me on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a></li>
<li><a href="https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/">Founders need to adjust to longer cycles between rounds</a> – if you’re thinking that your seed round will last for 2 years, you might get into trouble – also by me on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a> based on data from <a href="https://www.linkedin.com/company/carta--/">Carta</a></li>
<li>ICYMI: <a href="https://www.vccafe.com/2025/04/10/the-future-of-ai-tooling-is-interoperable-mcp-and-agent2agent/">The future of AI tooling is interoperable</a> – on Agent to Agent communication and MCP</li>
</ol>
<h2 class="wp-block-heading" id="ember2908">MEDIA OF THE WEEK</h2>
Israel’s population surpassed 10 million for the first time in 2025. Here are a few other interesting facts from the <a href="https://www.linkedin.com/company/israel-central-bureau-of-statistics/">Israel Central Bureau of Statistics ????? ??????? ??????????</a> (<a href="https://www.instagram.com/p/DJHjX_usCWk/">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHxbFt7ooDiLQ/article-inline_image-shrink_1000_1488/B4EZaQqtXIGQAU-/0/1746183839177?e=1751500800&v=beta&t=sagP3CHNA3Lf6EtE-DhaPpmjHEmOScO0QG7l1kSlohA" alt="Article content"/></figure>
How fintech is shaping ecommerce, report by <a href="https://www.linkedin.com/company/violaventures/">Viola Ventures</a>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHxp44InAOpzg/article-inline_image-shrink_1000_1488/B4EZaQnnnzHMAQ-/0/1746183027761?e=1751500800&v=beta&t=V5wMIWt45KMGrk_XB9knF7U9vdjXwbq57JL8XZb1L10" alt="Article content"/></figure>
Old but gold.
Global venture is in a recalibration – Q1’25 venture fundraising numbers are out by the <a href="https://www.linkedin.com/company/national-venture-capital-association/">National Venture Capital Association</a>. Just 87 funds closed, raising $10B total.
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHzamX-WU7n3g/article-inline_image-shrink_1500_2232/B4EZaQnNncHEAU-/0/1746182921166?e=1751500800&v=beta&t=V9QbzsnaZV6sJj6zC6jYs-LijEYfpdH8zG5wpy3wQ9U" alt="Article content"/></figure>
The biggest challenge remains liquidity. The lack of liquidity in venture means fewer funds are raising money (and therefore, it will start to impact startup funding).
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHNC1tKnQZsWw/article-inline_image-shrink_1500_2232/B4EZaQnLQjHcAk-/0/1746182911441?e=1751500800&v=beta&t=QTcsnf-1nOgLYAcYxaF0UlEKcN2WKQwgBBEE77QzJSs" alt="Article content"/></figure>
GDP contracts in Q1 for 1st time since 2022 as imports surge
-0.3% in GDP in Q1 due to monumental pre-tariffs import surge, well below the average growth of ~3% in the prior 2 years.
+1.8% in consumer spending, the weakest since mid-2023.
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHOb2X_dEnnIA/article-inline_image-shrink_1000_1488/B4EZaQpcMEGQAQ-/0/1746183505053?e=1751500800&v=beta&t=531uGtsabtpw-LZ6oaDAs23oO_-8LSsGlz9VwE9GR-o" alt="Article content"/></figure>
The AI 100 by <a href="https://www.linkedin.com/company/cb-insights/">CB Insights</a> (featuring several Israeli startups) <a href="https://www.linkedin.com/company/decart-ai/">Decart</a> <a href="https://www.linkedin.com/company/briaai/">BRIA AI</a> <a href="https://www.linkedin.com/company/orca-ai/">Orca AI</a>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFj7ycpKc85gQ/article-inline_image-shrink_1500_2232/B4EZaQn1fvHMAY-/0/1746183084544?e=1751500800&v=beta&t=7IXlSdZgMMGI4tjz3XJ0-Q08GdOWNZFOWUkyOnrjSBI" alt="Article content"/></figure>
The top use cases for GenAI in 2025, and how habits have been changing in the course of a year
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFmc7X4SxKdqQ/article-inline_image-shrink_1500_2232/B4EZaQotgLHEAU-/0/1746183314051?e=1751500800&v=beta&t=xTH7pan9UD4uRklOnRb7v94sOgZD4sH2E2XrNhvnDNM" alt="Article content"/></figure>
Startup valuation pulse check across rounds based on data from <a href="https://www.linkedin.com/company/carta--/">Carta</a> analysing 1084 rounds in the past 6 months
????
* $15.2M median valuation
* 78% are under $25M
?????? ?
* $48.9M median
* About a third of rounds in this stage are valued from $50M-$99M
?????? ?
* $115M median
* Wide distribution per usual (Series B is typically all over the place). 8% under $25M, 6% over $500M
?????? ?
* $254M median
* More than half cross the $250M mark, but the lower end is fragmented
?????? ?
* $545M median
* 50% of rounds cross half a billion in valuation
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQF4T0R-JLW_Ig/article-inline_image-shrink_1000_1488/B4EZaQpAUjHMAQ-/0/1746183391021?e=1751500800&v=beta&t=HCqrkEhNcEAr5YTrFV7liaDtcOQr2yljIC5cD0vQ2Nw" alt="Article content"/></figure>
Open source toolkit for building AI agents (<a href="https://substack.com/home/post/p-152246141">source</a>)
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHy8-SQAqc2eQ/article-inline_image-shrink_1000_1488/B4EZaQpp8BGQAQ-/0/1746183561529?e=1751500800&v=beta&t=EFq8v8V-JA2WZGbnhw79YP5XfgPI7-SCN-nWGqooBhI" alt="Article content"/></figure>
Practical tips for students in the Age of AI by <a href="https://www.linkedin.com/school/stanford-university/">Stanford University</a>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEFWJ9Hjr66hg/article-inline_image-shrink_1000_1488/B4EZaQp3ScHMAU-/0/1746183616225?e=1751500800&v=beta&t=pVfRKeAGmL0AMAhMZ5cAedDl6oWYpQTMzTVb4PkDe1I" alt="Article content"/></figure>
That’s all for this week. There’s a lot to celebrate in our “small” community! Keep on Creating!]]></content:encoded>
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<post-id xmlns="com-wordpress:feed-additions:1">12056</post-id> <enclosure length="22017808" type="application/pdf" url="https://www.harvard.edu/wp-content/uploads/2025/04/FINAL-Harvard-ASAIB-Report-4.29.25.pdf"/><itunes:explicit>no</itunes:explicit><itunes:subtitle>The original version of this newsletter was published on Linkedin. If you&#8217;re new here, the word &#8220;Firgun&#8221; (pronounced&#8230;</itunes:subtitle><itunes:summary>The original version of this newsletter was published on Linkedin. If you&#8217;re new here, the word &#8220;Firgun&#8221; (pronounced&#8230;</itunes:summary><itunes:keywords>Firgun, AI, Factify, Hardvard, Independence Day, Israel, Israeli startups, Labrador health, LayerX, lightrun, microsoft, Nyx, Supersocial</itunes:keywords></item>
<item>
<title>Nano Unicorns in the Making</title>
<link>https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/</link>
<comments>https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Thu, 01 May 2025 14:34:52 +0000</pubDate>
<category><![CDATA[AI Agents]]></category>
<category><![CDATA[Nano Unicorns]]></category>
<category><![CDATA[AI]]></category>
<category><![CDATA[AI agents]]></category>
<category><![CDATA[generative AI]]></category>
<category><![CDATA[unicorns]]></category>
<category><![CDATA[venture capital]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12046</guid>
<description><![CDATA[Until recently, the thought of scaling a company to $100 million in revenue meant building a BIG company…]]></description>
<content:encoded><![CDATA[Until recently, the thought of scaling a company to $100 million in revenue meant building a BIG company with lots of employees. Rows of engineers, endless layers of middle managers, a large sales department and org charts that resembled a corporate. AI is now changing that. 
Today’s AI-native startups are flipping the script, generating eye-popping revenues with teams so small you could fit them in a single Zoom screen without scrolling. Welcome to the era of the “nano-unicorn” – where AI isn’t just a product category, it’s the secret weapon transforming how companies scale. 
The figures collected by <a href="https://palle.substack.com/p/the-1b-dollar-single-person-company" data-type="link" data-id="https://palle.substack.com/p/the-1b-dollar-single-person-company">Rule of Thumb</a> tell the story in a few compelling charts: 
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="819" height="1024" data-attachment-id="12048" data-permalink="https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?fit=1456%2C1820&ssl=1" data-orig-size="1456,1820" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="228e8639-dd73-4171-8d27-064499a65c7f_3240x4050 (1)" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?fit=240%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?fit=819%2C1024&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1-819x1024.webp?resize=819%2C1024&ssl=1" alt="" class="wp-image-12048" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=819%2C1024&ssl=1 819w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=240%2C300&ssl=1 240w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=768%2C960&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=1229%2C1536&ssl=1 1229w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=380%2C475&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=800%2C1000&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?resize=1160%2C1450&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/228e8639-dd73-4171-8d27-064499a65c7f_3240x4050-1.webp?w=1456&ssl=1 1456w" sizes="auto, (max-width: 819px) 100vw, 819px" /></figure>
<h2 class="wp-block-heading" id="small-teams-massive-impact">Small Teams, Massive Impact</h2>
The numbers are nothing short of mind-blowing. Midjourney—yes, the image generator you’ve probably used—has hit $200M in annual recurring revenue with just 10 employees and zero venture funding. Not a typo: ten people, two hundred million dollars.
Cursor reached the coveted $100M ARR milestone in under two years with a team of 20. Eleven Labs, the voice AI company making waves across tech, scaled to $100M ARR with just 50 team members.
Then there are the speed demons: Lovable and Bolt.new both crossed $10M and $20M ARR respectively in just two months with teams of 15 people each. Mercor built a $50M business in two years with 30 employees, while Aragon AI hit $10M ARR with a mere 9 team members.
And perhaps most jaw-dropping of all, SeoBotAI reached $1M ARR with a team size of… one person. A solo founder, doing what once required a small army. Below are a few more examples from <a href="https://tinyteams.xyz/" data-type="link" data-id="https://tinyteams.xyz/">Tiny Teams Hall of Fame</a> (appropriately built with Lovable by Ben Lang). 
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="638" height="1024" data-attachment-id="12052" data-permalink="https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/screenshot-2025-05-01-at-15-27-23/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?fit=1076%2C1726&ssl=1" data-orig-size="1076,1726" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Screenshot 2025-05-01 at 15.27.23" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?fit=187%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?fit=638%2C1024&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23-638x1024.png?resize=638%2C1024&ssl=1" alt="" class="wp-image-12052" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=638%2C1024&ssl=1 638w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=187%2C300&ssl=1 187w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=768%2C1232&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=958%2C1536&ssl=1 958w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=380%2C610&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?resize=800%2C1283&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/Screenshot-2025-05-01-at-15.27.23.png?w=1076&ssl=1 1076w" sizes="auto, (max-width: 638px) 100vw, 638px" /></figure>
It’s worth mentioning there’s also a less glamorous side to this phenomenon. You may have heard about 11x, a buzzy AI agent startup that <a href="https://techcrunch.com/2025/03/24/a16z-and-benchmark-backed-11x-has-been-claiming-customers-it-doesnt-have/" data-type="link" data-id="https://techcrunch.com/2025/03/24/a16z-and-benchmark-backed-11x-has-been-claiming-customers-it-doesnt-have/">recently got negative headlines</a> for featuring clients on its homepage that had been churned. Getting the revenue is one thing, keeping it is another. Some of the churn in AI startups can reach 40-50% which means that in order to grow in ARR, these companies have to continue to spend high amounts to make up for the lost revenue, hurting margins.
<h2 class="wp-block-heading" id="gamma-the-new-playbook-in-action">Gamma: The New Playbook in Action</h2>
Want to see this playbook in action? Look no further than <a href="https://gamma.app/" data-type="link" data-id="https://gamma.app/">Gamma</a>, the presentation software company recently <a href="https://www.nytimes.com/2025/02/20/technology/ai-silicon-valley-start-ups.html" data-type="link" data-id="https://www.nytimes.com/2025/02/20/technology/ai-silicon-valley-start-ups.html">profiled in The New York Times</a> for serving nearly 50 million users with just 28 employees. Not a typo—that’s fewer people than most companies have in their marketing department alone.
Co-founder/CEO Grant Lee didn’t stumble into this model by accident. He deliberately rejected the bloated-team approach that has dominated Silicon Valley for decades, where headcount growth was often mistaken for success. Instead, Gamma obsessively focuses on maximising per-person impact.
According to the CEO, Grant Lee (based on a recent <a href="https://www.linkedin.com/posts/grantslee_the-new-york-times-profiled-a-start-up-with-activity-7323361186639421440-1r6Y?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAAdXR8B__-mqUlCsQ9HrvX-xaTkR9IUFRA" data-type="link" data-id="https://www.linkedin.com/posts/grantslee_the-new-york-times-profiled-a-start-up-with-activity-7323361186639421440-1r6Y?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAAdXR8B__-mqUlCsQ9HrvX-xaTkR9IUFRA">LinkedIn post</a>):
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
This isn’t an accident. We’ve deliberately designed our organisation to maximise impact per person. Instead of creating specialist silos, we hire versatile generalists who can solve problems across domains. Rather than building management hierarchies, we find player-coaches who both lead and execute. Our team leverages AI tools throughout our workflow – Claude for data analysis, Cursor for coding efficiency, NotebookLM for customer research synthesis. These aren’t just productivity hacks; they’re force multipliers.
</blockquote>
How? First, by hiring versatile generalists who can float between problems rather than building specialist silos. At Gamma, you won’t find narrowly defined roles like “Senior Frontend Engineer specializing in React animations.” You’ll find talented problem-solvers who can tackle whatever needs fixing.
Second, they’ve weaponized AI throughout their workflow. Claude helps them analyze customer data and generate insights. Cursor makes their engineers dramatically more productive. NotebookLM synthesizes customer research that would normally require dedicated analysts.
The results speak volumes. Their growth PM didn’t just run campaigns—she built an entire self-serve analytics system using AI, eliminating the need for a dedicated data team. Their marketing lead fed thousands of customer interactions into an LLM to create richly detailed personas—work that would typically require a research department and months of interviews.
This isn’t just doing more with less—it’s fundamentally reimagining what’s possible when one smart human is armed with the right AI tools.
Below are examples of the top AI companies according to revenue by employee. According to <a href="https://www.mosaic.tech/financial-metrics/revenue-per-head" data-type="link" data-id="https://www.mosaic.tech/financial-metrics/revenue-per-head">Jason Lemkin</a>, a good revenue per employee number should be around $250-300K.
<figure class="wp-block-image size-full"><img data-recalc-dims="1" loading="lazy" decoding="async" width="800" height="992" data-attachment-id="12049" data-permalink="https://www.vccafe.com/2025/05/01/nano-unicorns-in-the-making/revenue-per-employee-ai/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?fit=800%2C992&ssl=1" data-orig-size="800,992" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="revenue per employee AI" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?fit=242%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?fit=800%2C992&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?resize=800%2C992&ssl=1" alt="" class="wp-image-12049" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?w=800&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?resize=242%2C300&ssl=1 242w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?resize=768%2C952&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/05/revenue-per-employee-AI.jpeg?resize=380%2C471&ssl=1 380w" sizes="auto, (max-width: 800px) 100vw, 800px" /></figure>
<h2 class="wp-block-heading" id="the-road-ahead-challenges-and-opportunities">The Road Ahead: Challenges and Opportunities</h2>
Let’s not paint an unrealistically rosy picture—the “nano-unicorn” model faces genuine headwinds. The AI tools today are simply not there yet. 
Perhaps most concerning is the human element: when five people are doing the work of fifty, burnout becomes a real threat. And let’s not forget the 800-pound gorillas—resource-rich tech giants that can throw battalions of engineers and billions in capital at the same problems.
Not every industry will embrace this ultra-lean approach either. Biotech still needs actual scientists in actual labs. Manufacturing requires physical presence. Heavily regulated sectors like healthcare and finance may always need compliance teams that AI can assist but not replace.
Yet the trajectory is unmistakable. Sam Altman and others predict we’ll eventually see the “one-person unicorn”—a billion-dollar company run by a single founder commanding an army of AI agents. While we’re not quite there yet (today’s AI still needs human guidance, and most founders still want human co-conspirators for the journey), the trend toward extraordinary human leverage is undeniable.
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<div class="embed-twitter"><blockquote class="twitter-tweet" data-width="550" data-dnt="true">A decade ago we would've thought a single-person-company had no chance of reaching a billion dollar valuation ? But now thanks to all this AI, it is. You heard it straight from <a href="https://twitter.com/OpenAI?ref_src=twsrc%5Etfw">@OpenAI</a> CEO <a href="https://twitter.com/sama?ref_src=twsrc%5Etfw">@sama</a> ? <a href="https://t.co/bxvAp5hYVT">pic.twitter.com/bxvAp5hYVT</a>— Alexis Ohanian ? (@alexisohanian) <a href="https://twitter.com/alexisohanian/status/1752753792058294725?ref_src=twsrc%5Etfw">January 31, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</div></figure>
<h2 class="wp-block-heading" id="the-new-gold-rush">The New Gold Rush</h2>
For investors, this shift creates both challenges and opportunities. On the one hand, it’s easier than ever to create an MVP and start generating revenues. Small teams could potentially deliver higher returns driven by unprecedented efficiency metrics. Companies generating millions in revenue with single-digit employee counts could create entirely new economic models for venture returns. On the other hand, defensibility is low, and it’s hard to predict if those early revenues are going to persist a year later with much more competition from both startups and incumbents.
 For founders, especially those without access to vast capital networks, the playing field is being levelled in ways we’ve never seen before. As a pre-seed investor I’ve seen teams of two people deliver an MVP and first revenues with paying clients. Albeit, they were very technically skilled and leveraged their rolodex, but nevertheless, it would have been much harder to do even three years ago.
For me the takeaway is: it’s time to build. The future belongs to tiny teams of extraordinary people leveraging AI to maximise their impact. It’s not about how many people you can hire—it’s about how much leverage each person can achieve with the right AI tools at their fingertips.
In this new world, the focus shifts from scaling headcount to scaling impact. From building departments to building systems. From managing people to managing technology that multiplies human capability.
The nano-unicorn isn’t just a cute startup trend—it’s the beginning of a fundamental restructuring of how value is created in the digital economy. In the AI era, small isn’t just beautiful—it’s potentially unstoppable.
And we’re just getting started.]]></content:encoded>
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<title>Founders need to adjust to longer cycles between rounds</title>
<link>https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/</link>
<comments>https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Fri, 25 Apr 2025 12:56:22 +0000</pubDate>
<category><![CDATA[Fundraising]]></category>
<category><![CDATA[Series A]]></category>
<category><![CDATA[2025]]></category>
<category><![CDATA[Carta]]></category>
<category><![CDATA[founders advice]]></category>
<category><![CDATA[Seed]]></category>
<category><![CDATA[venture capital]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=12035</guid>
<description><![CDATA[“Founders, heads up – if you’re planning to raise a VC round every 18 months, you’re planning to…]]></description>
<content:encoded><![CDATA[<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Founders, heads up – if you’re planning to raise a VC round every 18 months, you’re planning to fail these days.” 
<cite>Peter Walker, Head of Insights at Carta</cite></blockquote>
The venture capital landscape has shifted. The rapid-fire funding rounds of the recent past are giving way to a new reality: longer timelines between raises and a significantly higher bar to clear for securing your next round of capital. Founders need to understand these changes and adapt their strategies to thrive in this evolving environment.
Recent data paints a clear picture. If you’re still planning to raise a new round every 18 months, it’s time for a reality check. According to Carta data from 14,454 US startup rounds between 2019–2024, the median time between funding rounds has increased significantly as of the end of 2024:
<ul class="wp-block-list">
<li> 2.2 years from Seed to Series A</li>
<li>2.5 years from Series A to Series B </li>
<li>2.4 years from Series B to Series C </li>
</ul>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="964" data-attachment-id="12036" data-permalink="https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/whatsapp-image-2025-04-20-at-02-37-30/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?fit=1170%2C1101&ssl=1" data-orig-size="1170,1101" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="WhatsApp Image 2025-04-20 at 02.37.30" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?fit=300%2C282&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?fit=1024%2C964&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30-1024x964.jpeg?resize=1024%2C964&ssl=1" alt="" class="wp-image-12036" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=1024%2C964&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=300%2C282&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=768%2C723&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=380%2C358&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=800%2C753&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?resize=1160%2C1092&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-20-at-02.37.30.jpeg?w=1170&ssl=1 1170w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>
This lengthening of cycles is corroborated by a <a href="https://news.crunchbase.com/venture/series-a-startups-more-time-series-b-funding-xai-quantum/" data-type="link" data-id="https://news.crunchbase.com/venture/series-a-startups-more-time-series-b-funding-xai-quantum/">Crunchbase survey of U.S. companies</a>, which found the median time lapse between Series A and B rounds in 2024 reached 28 months, the longest span in over a decade.
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="525" data-attachment-id="12037" data-permalink="https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/screenshot-2025-04-25-at-13-39-54/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?fit=1142%2C586&ssl=1" data-orig-size="1142,586" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Screenshot 2025-04-25 at 13.39.54" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?fit=300%2C154&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?fit=1024%2C525&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54-1024x525.png?resize=1024%2C525&ssl=1" alt="" class="wp-image-12037" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?resize=1024%2C525&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?resize=300%2C154&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?resize=768%2C394&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?resize=380%2C195&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?resize=800%2C411&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/Screenshot-2025-04-25-at-13.39.54.png?w=1142&ssl=1 1142w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>
This is a significant stretch compared to the traditional 12–18 month fundraising cycle. And it’s not only the time period that has been elongated. It’s also that the bar is higher. If in the past the bar for startups raising a series A was $1M in ARR, it’s not so simple any more. Only 17% of startups that raised seed rounds in 2022 have made it to a Series A after two years, marking one of the lowest progression rates in recent memory.
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="566" data-attachment-id="12039" data-permalink="https://www.vccafe.com/2025/04/25/founders-need-to-adjust-to-longer-cycles-between-rounds/whatsapp-image-2025-04-06-at-21-14-19/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?fit=2030%2C1122&ssl=1" data-orig-size="2030,1122" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="WhatsApp Image 2025-04-06 at 21.14.19" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?fit=300%2C166&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?fit=1024%2C566&ssl=1" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=1024%2C566" alt="Graduation to series A at all time low" class="wp-image-12039" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=1024%2C566&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=300%2C166&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=768%2C424&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=1536%2C849&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=380%2C210&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=800%2C442&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?resize=1160%2C641&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-04-06-at-21.14.19.jpeg?w=2030&ssl=1 2030w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>
Why the slowdown?
<ul class="wp-block-list">
<li>Investors are being far more selective, prioritizing strong fundamentals.</li>
<li>Startups are focusing on profitability and extending runway, rather than chasing growth.</li>
<li>Rising capital costs and cautious market conditions are reshaping how startups grow.</li>
</ul>
For founders, getting from seed to Series A now demands more than just vision — it requires capital efficiency, solid metrics, and clear product-market fit.
<h2 class="wp-block-heading" id="how-should-founders-prepare-to-adapt-to-this-new-funding-reality">How should founders prepare to adapt to this new funding reality</h2>
While the availability of capital may be more constrained for many, founders with truly differentiated technology and clear paths to profitability can still raise money. But it’s important to plan according to the reality in the field, and not based on past anecdotes. Here’s what founders can do to navigate the current period: 
<ul class="wp-block-list">
<li>Raise Enough: Don’t undercapitalize. Budget for at least 24 months of runway, with clear growth milestones.</li>
<li>Focus on Proof Points: Show clear product-market fit, strong retention, and efficient scaling before you even think about raising your next round.</li>
<li>Own Your Journey: Control your burn. Prioritize a path to profitability (or at least breakeven optionality).</li>
<li>Play the Long Game: The “fast lane” is slower now. Success will favor patient, disciplined builders.</li>
</ul>
The days of easy money are over. In 2025, founders must adapt to a tougher, more disciplined fundraising environment.]]></content:encoded>
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