I've raised VC and bootstrapped. Considering everything that's happened with AI in the last few months, I'd never raise VC again. Here's what I'd do instead: Find an angel willing to invest enough to give you two years of runway. Give up 20%, maybe more if that's what it takes. Use that money to build, not to hire a big team or rent an office. The math works differently than it did five years ago: - A decent computer can run an open source model good enough to build almost anything - One person with AI can do what used to take an engineering team of ten - You don't need money for tools anymore, just enough to survive while you find product-market fit The moment you take that angel check, you already know there's no more coming. So you build like your life depends on revenue. To be clear, this isn't true for every business. If you're building something that genuinely needs hundreds of millions before it can even prove itself (deep tech, hardware, anything physical), VC is still the only path. But for the vast majority of tech companies being built right now, that's the play. Founders raising bigger rounds are making the same bet, just with more zeros attached and less incentive to generate revenue and become default alive.
John Wang
1w
In the era of AI Operating Systems, the goal isn’t to build a giant company—it’s to build a giant system run by a tiny, lethal team. With AI Employees handling the heavy lifting, 1 founder with 2 years of runway can disrupt entire legacy verticals. Bootstrapping/angel-funding is the new scale.
Been thinking heavily about this lately. I don’t think I to hire people in order to validate or even sell a product anymore. Not more than one person, at least. Like you say, unless you explicitly DESIRE to function off continuous funding rounds until an acquisition or IPO, a strategic angel offers more value than a random VC anyways.
Nick Taylor
1w
If you have a good product market fit, and with today's tools you still can't get traction, maybe it's not for you lol Any search/ deep research can help you find a tool to solve your problem. While AI is crushing and authenticity always wins, these niche AI startups are offering a ton of value if you use the right tools, especially when you can get them to talk to each other via recursive loops.
Eduardo Mussali the part this misses for me on the services side: the one person plus AI model is great for building fast, but it gets tested hardest after the sale, not before. Established brands buying automation don't just want it built, they want someone accountable when it breaks at 2am. A two year runway doesn't automatically solve for that.
I think the bigger shift isn’t VC vs. angel. It’s runway financing vs. milestone financing. Two years of cash can still make a company slow, regardless of who wrote the cheque. Raise enough to prove one important thing then let customer revenue decide what happens next.
Good advice overall Eduardo Mussali, but one thing I would improve: rather than "Use that money to build..." I’d recommend using that money wisely for GTM/distribution, that should be founders #1 priority currently.
One VC advantage this misses: easier access to follow-on capital. Once the model works and speed matters, that funding path becomes an asset, not a distraction.
Neil Ruaro
1w
what’s the incentive for the angel to invest though Eduardo Mussali? revenue share? small acquisition? or smth else entirely?
Any thoughts on why software companies are still able raise massive amounts of cash when knowledge work has become largely marginalized?
The big question I chatted with some folks yesterday was: since everyone can use AI to build, the moat might be in hardware where investment is larger. I often wonder if in the AI era, it's the investment / money can be a moat. Best would be to have a product that requires 3 specialized robots to build, and in a way that doing it at scale is impossible, so bigger robot shops can't compete with you