What Investors Really Want: Insights from Sophia Kleshchuk

Raising capital isn’t just about valuation caps or aggressive growth projections. Having worked on both product development and go-to-market strategy, I’ve seen that successful fundraising depends far more on transparency, adaptability, and a grounded understanding of what’s actually needed to scale.

Clarity is non‑negotiable

Investors don’t back vague plans. A line item like “growth expenses” isn’t enough. Be precise: show exactly how the funds will be allocated — whether that’s marketing, product development, key hires, manufacturing, or legal. A clear use-of-funds breakdown signals operational discipline and thoughtful planning.

Many funding rounds fall apart not because the idea lacks potential, but because the plan lacks clarity. Include a straightforward table showing your projected burn rate, runway, and how that changes across different funding scenarios. It’s a small detail that builds big confidence.

Founders must pivot — wisely

Investors value passion — but they value market awareness and flexibility even more. Founders who cling to their original vision despite poor market signals come off as unrealistic.

Take Netflix, which started as a DVD rental-by-mail service before transitioning into a streaming giant, and then again into a global content producer. Moonfruit, once a website builder, changed its product direction entirely after observing user behavior, eventually leading to its acquisition.

Even Slack began as an internal tool for a failed gaming company before pivoting into one of the most widely used workplace communication platforms.

These cases show that being willing to shift direction based on real market feedback isn’t a red flag — it’s a strong signal of founder maturity and product intuition.

Don’t confuse aggression with ambition

In one pitch I reviewed, the founders proudly claimed they had a strong relationship with an industry leader and planned to form a strategic partnership. But just a few slides later, they outlined a long-term goal to “replace” that same company.

That kind of language raises red flags. Investors appreciate ambition — but they also value strategic thinking and long-term relationship building.

Signaling that you intend to “eat” your partner may come off as naive or overly aggressive. Hustle is good, but too much bravado can undermine your credibility. Show that you know how to build alliances, not burn bridges.

Investors differ — know who you’re pitching

Not all capital is the same. Early-stage angels might bet on a compelling founder story and lean execution. Institutional VCs want clean capitalization tables, regulatory foresight, and quantifiable traction.

Customize your narrative and emphasis depending on who’s in the room. Startups raising $500K shouldn’t use the same deck they would for a $50 million round.

Market data to sharpen your pitch

Venture capital is rebounding — but not evenly. In the first half of 2025, U.S. startups raised $162.8 billion, a 76% year-over-year increase, driven largely by the AI boom.

Globally, AI deals made up 20–30% of total deal volume, yet captured over half of all VC dollars — highlighting the surge in AI-led mega-rounds.

But while startup funding rose, VC fundraising declined. Firms raised only $26.6 billion across 238 funds in H1 2025 — a 33.7% drop from the year prior. In other words: there’s less dry powder on the table, and funds are being more selective.

That means your pitch needs more than vision. Investors today are backing fewer startups — and favoring those with real traction and AI-native strategies.

The founders who win in this market are pragmatic, capital-efficient, and show exactly how investment translates into sustainable growth.

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(Featured image by Vitaly Gariev via Unsplash)

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