Tope Alabi

This week was tough. I had to speak to two portfolio companies, struggling to raise follow on #funding. #startups are shutting down quicker compared to before. It’s never been easier to build a product, but it’s never been harder to secure a lasting "right to win." The startup playbook is changing. The "zombie company" strategy: running for years to find fit, is becoming less viable. Founders are now in a fix - whether to make the brave, rational decision to conserve resources and start afresh for an #AI world, rather than burn capital on a path that isn't working. The mental toll of this reality is immense and often overlooked. The timeline to success is never linear. It's a series of starts, stumbles, and comebacks. To every founder in this position, keep building. #venturecapital #mentalhealth Picture Credit Eric Partaker

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YC just dropped a video that said exactly what I've been feeling: at the early stage, moats are a distraction from delivering value. We've been on hundreds of customer calls, and not once has a home service company asked about our moat. They don't care if OpenAI could theoretically build what we built. They care about one thing: will Pam answer their phones tonight when that emergency call comes in. The entire sales process is about trust and immediate value delivery. Founders get paralyzed by anxiety and spiral into questions like "What if Google builds this" or "What stops someone from copying us." Those questions assume you've already built something worth defending. Most startups die because they never create value, not because someone copied their valuable creation. Obsession with moats prevents you from building one, because you can't strategize your way to a moat in a PowerPoint deck. You build it by solving real problems better than anyone else, by talking to users obsessively at the pre-seed, seed, and even Series A stage, and by shipping solutions that meet their actual problems. The best moat is being so deeply embedded in solving customer pain that competing with you would require competitors to care as much as you do. Most won't. This our customer doing a Cactus demo on our behalf in the last conference!! Avinash Joshi Sanjeet NaikRuby Wang

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Startup teams are ~30% smaller now compared to 3 years ago—at least in SaaS, FinTech, and HealthTech, three of Utah’s most active sectors. Startups are staying leaner, longer. In that same time (not shown in this chart), average ARR at each stage has also increased. So on average, startups are smaller but have more traction when they raise — pointing to a new era of capital efficiency. 👉 What’s driving this shift? • Market pressure to stay lean? • AI + automation making small teams more powerful? • Investors rewarding efficiency over growth at all costs? How are you thinking about the “right” team size vs. traction when raising today?

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