5 or 10 years ago, startup founders used to say, “I have a great idea for a software company and I just need VC funding.” They don’t say that anymore.
Big VC funding is not required to succeed in the modern software game in the AI-first or SaaS+AI world, especially for up-and-running early-stage companies with revenue.
In the 1990s, 2000s, and early 2010s, having a dozen software engineers, a pack of expensive salespeople, and the biggest booth at the trade show generally meant you would win and become a leader that grew big fast.
It doesn’t work that way anymore.
Not for the last 10 years in SaaS, with amazing cloud technologies to build cheaper and much more efficient GTM approaches.
Big funding and brute force spending were overkill for 90% of SaaS companies that weren’t trying to create a massive platform with a $10 billion exit.
It’s showing up the same way in the AI-first and SaaS+AI races.
It didn’t have to be that way. Big spending could have been a serious advantage again.
But it isn’t.
Not for 90% or more of software companies and entrepreneurs.
- You don’t need dozens of engineers to get started and get real revenue.
- You don’t need to hire packs of salespeople to sell more.
- You probably aren’t building a massive infrastructure or platform play.
- Very few are trying to grow fast and sell for billions in 7-10 years, or flame out.
Even more important, it’s not so clear if and when adding VC-funding rocket fuel to a modern software company actually improves your odds of a bigger exit sooner.
Clear paths to successful growth and exits are not as obvious as they were when on-premise software transitioned to SaaS 10 years ago.
VCs know this. They know big funding doesn’t improve your odds in the early game.
Early-stage VC funding has not increased since 2019, as Crunchbase reports every quarter.
That’s not a bad thing.
Most VC funding in software tech is going into big infrastructure, platform plays, or later-stage AI rockets that need more rocket fuel. There aren’t too many of those.
And there’s an explosion of software startups, all over the world.
Savvy, smarts, niche focus, customer closeness, and fast iteration are what’s required. Funding doesn’t help there.
And your VC-funded competitors don’t have as much of an advantage as you think.
That’s how I see it this year in the software game. How do you see it?
