Venture capital is always evolving, and a recent State of the Industry virtual event hosted by York IE highlighted just how much the tech funding model continues to shift. The panel, moderated by York IE Managing Partner Joe Raczka, featured a candid conversation with experienced investors Christopher Mirabile (Launchpad Venture Group), John Murphy (Hyperplane), and Deepak Sindwani (Wavecrest Growth Partners).
The Barbell Effect and the Moving Series A Target
Murphy kicked things off by describing what he called a “barbell” effect in today’s market. “Capital is going in at the very early stages, more rapid growth than we’ve seen in the past… and also into companies that are already scaling quickly.” In other words, there is a heavy concentration of capital on both ends of the spectrum: very early and very late stage, with less activity in the middle.
Mirabile added that Series A has become one of the trickiest points in a startup’s journey, calling it a “yardstick that’s always moving.” He pointed out how different the bar is today compared to a few years ago. “The idea that a SaaS company growing 25 to 50% year over year with $10 million in revenue and solid customer metrics could fail was wild. Now it happens all the time.” Companies are under pressure to outperform just to stay in the game, often needing to hit metrics like the Rule of 40 to raise the next round.
Sindwani agreed, describing the current landscape as a clear case of “haves and have-nots.” A major factor, he said, is that LPs are not providing liquidity at the levels they once were, which is affecting funding across the board.
M&A Headwinds: To Build or Buy?
Mirabile also shared a compelling take on the underlying reasons for these funding headwinds. He believes the M&A market is not what it used to be. “The build-buy-partner equation has changed.” With AI and no-code or low-code tools accelerating product development, companies are more likely to build solutions in-house than acquire startups outright.
Sindwani backed that up, noting that private equity firms, not large strategics, are now the biggest buyers of software companies. These buyers are often focused on numbers, not just vision. “They’re more metrics- and analytics-driven than traditional strategic buyers.” That, combined with how quickly similar products can now be built, makes it harder for startups to stand out and secure exits.
The Bottom Line
Today’s funding environment is more complex than ever. Whether you are a founder, investor, or operator, navigating it requires more than just a good pitch or solid growth. It demands strategic clarity, standout metrics, and crisp execution.
