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Capturing the attention of investors, particularly in the venture capital community, may be harder than ever. Closing a funding round is even more challenging. So how can founders raise VC funding in the current environment? Reid Hoffman, Stacy Brown-Philpot, and Aileen Lee have a few suggestions.
Hoffman is the founder of LinkedIn and chairman of venture capital firm Village Global. Philpot is the former CEO of TaskRabbit and founder of Cherryrock Capital. And Lee is founder of seed investment firm Cowboy Ventures — and the person who coined the term “unicorn” for startups. The trio gathered recently at the 2025 Masters of Scale Summit to discuss the current funding environment and how companies can stand out when they’re trying to fundraise. Here are their tips.
Demonstrate a Plan to Scale
“Series A, the bar has moved,” said Brown-Philpot. “The honest truth is you showing up with 6,000 customers is not enough. You have to show me the potential of how do I get to 60,000 and 600,000, and on what pace can you do that? Before, there was always the assumption that the next round would take care of that. That’s gone now. You have to demonstrate that sooner, a lot sooner.”
Have a Product Ready
For new startups, Lee added, if you don’t have a product ready to show, don’t bother knocking on VC investor doors.
“A lot of times people needed money at seed to build the product,” she said. “Now there are so many tools to help you build the product, if you come and you haven’t actually tried to build something yourself and you haven’t actually … shown your ingenuity and your hustle to do more with less, you’re already taking yourself off the field.”
Be Realistic
Founders who are in talks with investors also need to take a more realistic approach to funding, the investors said. The current environment is not one in which overreaching earns rewards. And how you negotiate with these early investors is often viewed as an indicator of your company’s long-term success.
Know where you are in your startup’s evolution. And don’t go into negotiations with hard demands.
“Sometimes … requests, even if you’re a hot deal, are negative signals,” said Hoffman. “Your lack of realism here implies you’re not going to be successful.”
Learn to Recognize a No
Hoffman adds that founders should learn to recognize a no, because sometimes they’re not as clear as you think, with statements from VCs like “call me back on the next round.”
“If you’re not hearing a yes, it’s a no,” he said.
Don’t Raise Too Much Funding
Raising too much money can actually be a bad thing, says Lee. Oversized early rounds make a business less capital efficient — and that can make it harder to raise the next round of VC funding.
“I think we have a lot of Icarus companies right now,” she said. “They’re flying pretty close to the sun.”
Yes, You Need to Show How You’re Using AI
VCs want to see founders who know how to use AI tools to help them grow. It’s a way for startups to fill labor gaps in essential roles that aren’t glamorous. (And if you can upskill your workforce to make them qualified to direct that AI, all the better.)
“AI is being pulled into actually a lot of industries that are not considered sexy industries because they can’t find the talent,” said Lee.
While all of this might be intimidating, the panel agreed that this is the right time to start a company. It’s an era of disruption, which is when entrepreneurs have an advantage and an opportunity to get ahead of older businesses.
“When we’re in these times of disruption, which obviously we are now, that means that the old power structures are no longer as firm or as strong,” said Hoffman. “The rules are shifting. So that’s when the opportunities are there, and that’s to lean in.”
The final deadline for the 2026 Inc. Regionals Awards is Friday, December 12, at 11:59 p.m. PT. Apply now.
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Chris Morris
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