Serban Mogos

YC’s new batch (S25) is live and investors are already swarming 🔥 Harmonic’s data highlights the 20 startups attracting the most attention. The signal is clear: this batch is dominated by AI-native and infrastructure-first companies. ▫️ Pally (YC S25) – Personal relationship management with AI insights ▫️ Avelis Health (YC S25) – AI auditing for medical claims ▫️ Motives (YC S25) – Video-based market and user intelligence ▫️ IronGrid – Insurance-backed warranties for battery storage ▫️ Imprezia – Native ad engine for LLMs and chatbots ▫️ Finto – Automated invoice processing with AI agents ▫️ Kernel – Cloud platform for web automation agents ▫️ Nottelabs (YC S25) – Framework for browser-based AI agents ▫️ BootLoop (YC S25) – AI-driven firmware development and debugging ▫️ Convexia (YC S25) – Automated sourcing of early-stage drug candidates ▫️ Closera (YC S25) – AI marketing workflows for real estate ▫️ AgentMail (YC S25) – Email API purpose-built for AI agents ▫️ Alter (YC S25) – Secure gateway connecting AI tools to enterprise data ▫️ Channel3 (YC S25) – API for AI-powered online shopping ▫️ Albacore Inc. (YC S25) – Autonomous underwater vehicles ▫️ Wedge (YC S25) – Compliance and monitoring for AI in healthcare ▫️ Halluminate (YC S25) – Testing and deployment automation for AI apps ▫️ Cactus (YC S25) – Run AI models directly on devices and wearables YC continues to be the strongest early-stage pipeline in the world. 👉 If you were writing checks today, which of these would you back? Image source: Lenny's Newsletter

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Three kinds of AI startups I’m especially excited to invest in and work with these days: 1. The Surprisingly Valuable Niche Workflow — small enough for OpenAI not to care about; big enough to make $100M per year. Sooo so many opportunities out there, from logistics to finance to healthcare to construction to manufacturing and on and on. 2. The Full-Stack Software Company — founders are realizing they can move up the value chain, to not just sell software to other businesses, but use their own software to provide end solutions to customers. Our own portfolio has inspired us here, from industrial solutions to life science to agrochemical to admin services and more. 3. The Bold Consumer Bet — it’s time for a new generation of consumer mainstays that are AI-native and fit the way people use software today. We don’t often invest in consumer apps, but we have seen great examples of this in language learning, personal finance, fashion, dating, social, messaging, etc. All three are great examples of building at new frontiers of the software-addressable economy, where advances in AI have opened up new opportunities for software founders. A good litmus test for this thesis: “If I had this idea 5 years ago, could I build it?” If the answer is no or maybe, you’re on the frontier. If you’re building something cool in one of these areas — or anywhere else on frontiers of the software-addressable economy — please get in touch with us at character.vc We’d love to learn from you. And we’d love to share how we help founders bridge the gap from possible to PMF in these categories.

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Anti-VC posts love to paint founders as victims. “The board will control you.” No, they hold you accountable and challenge your thinking. The good ones bring pattern recognition from other portfolio cos and bring perspectives you don’t yet have. “You’ll be underpaid. No liquidity." True at the start. But comp usually catches up fast if you’re performing well. And equity is the real payday, whether through an exit or a growing secondary market. If you build something people want, you’ll get yours. The real issue isn’t any of those. It’s that most founders sign up for a game they don’t fully understand. Let’s run the numbers. You raise 20 million. Investors expect at a 3x return. That’s 60 million back to them. To understand the challenge of that: Imagine paying that back that through profits alone. You’d need 20 million a year in net profit for three years straight. At 40% margins, that’s 50 million ARR. At venture-style return expectations, you’re suddenly building for a 100 million plus ARR company. Most founders don’t do this math when they celebrate their raise. It’s a problem for later. The minute you raise, you set something in motion. I’ve rarely seen a founder do a seed and just stop there. Closing one round almost immediately puts you on track to start preparing for the next. That’s what raising VC really is: the Olympics of business. The bar is higher, the odds are lower, and the effort required is extraordinary. Bootstrapping is a different game and is gaining popularity. Because: You get instant market feedback. You have a year, maybe less, to find out if people care. You live inside cashflow constraints, which is brutal but keeps you honest. VC gives you 3 to 5 years of oxygen, which is incredible, but it can also postpone the moment of truth about whether you’ve built something people really want. And that comes with a massive opportunity cost: prime career-building years, often in your 20s, 30s, and 40s. When we started Sarwa, we weren’t thinking about ARR milestones or exit math. We just wanted to build something great. I’m grateful we’re now well past 10 million ARR and working toward our first 100 million ARR. But we had no idea what we were signing up for, how big it would need to get to clear the bar. Don’t get me wrong, I wouldn’t have it any other way if we were to start over. But I’m conscious that we’ve been incredibly lucky to cross these milestones. If you raise, raise with eyes open. That’s why I’m often of the opposite view of “take every dollar,” because a dollar taken today needs to be repaid in multiples tomorrow. You don’t get to play for a 2 million business anymore. You’re playing for a 200m million exit. And according to VentureBeat, only 4% of startups ever reach 1 million ARR, and just 0.4% make it to 10 million ARR. We all think we’re the exception to those numbers. Raising VC isn’t bad. It’s a wild ride. Just know what you’re signing up for.

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Several of my portfolio companies just closed rounds in this tough market. Not because they got lucky. Because they understood how fundraising actually works. Here's the fundraising playbook nobody tells you: The Fatal Numbers: • Seed stage: ~10% get promoted to partner meeting • Of those: ~10% get a term sheet • Your odds per pitch: 1% To get one term sheet, you need 100 conversations. Maybe more if you're outside the typical pattern. Most founders pitch 10 investors and wonder why they can't raise. The ones who close? They pitch 100. But here's what kills most founders: They treat every investor equally. The 3rd Meeting Test: If you're on meeting #3 and they're still "sizing the market" - it's dead. They're being polite. Move on. VCs rarely will say "no." I watched a founder waste 3 months on an investor who kept asking for "just one more data point." Meanwhile, another fund that was excited from day one was ready to wire. The Truth About Data Rooms: No investor finds conviction in a spreadsheet. Data rooms are for confirming what they already believe. Not for convincing skeptics. One of my founders shared this: "The investors who funded us barely looked at the data room. The ones who spent weeks in it all passed." The Winning Playbook: Week 1: Cast wide. 50+ intros queued. Week 2-3: First meetings. Quick yes/no filter. Week 4-6: Double down on believers only. Week 7-8: Drive to term sheets. Track everything: • Response rates • Meeting conversion • Speed of follow-up • Quality of questions Fast no > slow maybe. The Position of Strength: My companies that raised successfully all had one thing in common: They didn't need the money yet. They raised with 6-12 months runway, not 2-3. They had leverage. They could walk away. Desperation is visible in every pitch. Confidence comes from options. The Simple Framework: Think of fundraising like dating. Wide funnel, quick qualification, then depth with the right matches. The investor who's excited after meeting one? That's your champion. The one who needs 5 meetings to "get comfortable"? They're just not that into you. My advice to every founder: Start with 100 names. Expect 10 first meetings. Fight for 1-2 term sheets. Those aren't depressing odds. That's reality. Plan accordingly. Of course, it also helps having your existing investors champion you! #Fundraising #Startups #VentureCapital #FounderAdvice #SeedFunding

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Most startup advice is written for SaaS. Deep tech is a different beast. In deep tech: Value = milestones hit, not MRR or DAUs. Steal frameworks from unexpected industries. Build a board of specialists, not a generalist guru. Assume delays — plan like it’s inevitable. Fundraising is about probability of technical success, not vanity metrics. Run multiple shots on goal to avoid binary failure. Keep optimism high, but plan with pessimism. It’s a long game. Play a different playbook.

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What's going on in the venture capital market? While we see very large, highly valued rounds for AI companies, many founders struggle to secure funding at all. 😳 I see 4 founder profiles in the market: 1️⃣ Serial founders or scale-up executives → They raise big rounds (+20m valuations) led by Tier1 VCs. 2️⃣ Founders with traction (100-200k ARR) → They usually find a pre-seed lead after multiple VC talks and then fill rounds quickly on average valuations. Only works for VC Cases. 3️⃣ Founders with little traction but competitive markets → They struggle with endless VC conversations that often lead nowhere. Better off raising angel rounds or bootstrapping. 4️⃣ Software founders bootstrapping → They build MVPs, start selling, and skip early rounds altogether—or wait for better momentum. What are pre-seed investors looking for in 2025? 👉 Proprietary data sources 👉 Strong domain knowledge (vertical SaaS is a win!) 👉 Real customer traction 👉 Deep-tech with a clear edge Fundraising strategy matters more than ever. Here’s what works: • Cluster VCs - don’t pitch your dream fund first. • Use early NOs as free feedback to improve your story. • One term sheet creates momentum - then the round fills up fast. What has been your experience raising in this market❓ #fundraising #venturecapital #investments 📸 Fabian Klima

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2009: The financial crisis had crushed fundraising. Barely any new capital went into venture funds. Yet the vintages from those years went on to deliver some of the strongest returns in history. Fast forward to today (2024/2025): Venture capital fundraising is at its lowest point in more than a decade. What does that mean? - ⁠Less money will be available to startups over the next years - The bar for raising capital goes up again: quality matters - ⁠Entry valuations will reset to saner levels --> Funds raised now are likely to outperform, just as history shows The paradox of venture: the best time to commit capital is exactly when most people hesitate. Investors (Limited Partners) should lean in now, not when the next boom makes it easy.

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