Rainer Schwarz

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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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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Founders, only you, your team and your investors should own shares in your startup❗ I see so many early teams giving away equity to service providers, tech agencies, coaches, lawyers, fundraising consultants, media, or even “work for equity” deals with people who are not real employees. I get why it happens. In the early days, paying with equity feels easy. Cash is tight. You want to move fast and get help. But here’s is the hard truth: 👉 Equity is the most expensive currency you have. 👉 Every extra name on your cap table makes your life harder later. 👉 Future investors will care. A LOT. When you give away slices to anyone outside founders, team, or investors, you lose control & (a lot of) money. Here’s a simple structure: ✅ Founders: reserve equity for yourself (with founder vesting!) ✅ Team: use an option pool to incentive core team members ✅ Investors: money for equity & use pooling structures for angels Everything else - services, advice, legal, agency work - you pay for. If you can’t afford it, find a way to earn your first money. Get creative. But keep your cap table CLEAN. P.S. At a later stage, it could be an option to consider giving important advisors a small amount of shares. #startups #investments #venturecapital

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LTV:CAC is broken. I want to introduce a new framework for tracking unit economics especially for AI-native companies that may not have a traditional seat based pricing model: CAC Yield. I've written about this before, we should remove LTV:CAC from our vocabulary. It's based on static, point-in-time averages that don't capture the constant change happening in our businesses. CAC Yield can offer such a clearer and more dynamic view of unit economics, especially for variable pricing models. It's a simple concept - each month we make discrete investments in sales and marketing and we can measure the return on those investments by month per each cohort. And it's measurable in month 2, 15, or 43. CAC Yield can be used across any pricing model or time span. In this article, I break down: 💡 Why LTV:CAC is broken 💡 How CAC Yield works 💡 What healthy (and unhealthy) yield curves looks like 💡 Benchmarks to guide going faster or slower 💡 How to deal with lumpy CAC and variable sales cycles We’ve also included a free spreadsheet template so you can start tracking CAC Yield for yourself with your own data. https://lnkd.in/e9ucsShd #CACYield #StartupMetrics #GTM #SaaS #ScienceOfScaling #Stage2Capital

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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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