Trends Shaping Early-Stage Investing: Key Takeaways from Leading Investors Top VCs decode the evolving early-stage investment landscape, sharing insights on fundraising, founder traits, sector trends, and the path to sustainable growth.
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The world of early-stage investing is evolving at an unprecedented pace, driven by emerging trends and technologies that are reshaping how capital is deployed. At the Tech and Innovation Summit 2025 in Bengaluru, leading Indian venture capitalists (VCs) shared their insights on what's next for startups and investors alike.
The Challenge of Early-Stage Fundraising
Raising capital is one of the toughest hurdles for startups, especially in the early stages when they lack substantial proof of success. Investors at the summit highlighted key factors they consider when backing young brands.
"We invest in Series A and B, focusing on companies with initial revenue or customer traction," said Kanika Mayar, Partner at Vertex Ventures South East Asia & India (VVSEAI). "The first thing we evaluate is market potential—can this company hit USD 100 million in revenue in 4–5 years? Next, we assess the founder's fit with the market and the real drivers behind customer payments."
For those investing at an even earlier stage, technology and differentiation play a crucial role. Shubham Sandeep, Managing Director at pi Ventures, emphasised: "We invest in deep tech at the seed and pre-Series A stages. A strong tech or IP moat, validated beyond a concept, is critical."
What Makes a Great Founder?
Investor success often hinges on spotting exceptional founders early. Romit Mehta, VP at Lightspeed Partners, noted: "Great founders create markets. We assess whether they have unique insights and exceptional distribution skills."
Founders' character and resilience are equally important. Murali Krishna, Managing Partner at Inflexor Ventures, explained: "Startups reflect their founders. Grit, intellectual honesty, and leadership are the key traits we look for."
On the financing side, Krushant Pandya, VP at BlackSoil, stressed that "execution matters more than the idea. High frequency and strong retention—like what we've seen with Zomato and Zepto—are strong indicators of success."
Unicorns: The Myth vs. Reality
The billion-dollar startup dream is alluring, but investors caution against chasing valuations over building real businesses.
"Unicorns are mythical," said Kanika Mayar. "Instead of chasing valuations, founders should focus on building valuable, profitable companies."
Others believe unicorns emerge naturally when strong fundamentals align. Murali Krishna stated: "No one can spot a unicorn early on. It only becomes evident at Series B or C when companies raise large capital rounds." Romit Mehta added: "Building a unicorn is unnatural—it takes aggressive, relentless founders."
What's Hot in 2025?
Investors at the summit identified key sectors poised for growth:
- Kanika Mayar sees opportunities in consumer brands, AI-powered software, and clean energy.
- Shubham Sandeep highlights deep tech sectors like quantum computing, space, semiconductors, and defense.
- Romit Mehta is bullish on AI-driven automation, new-age commerce, and global consumer tech from India.
- Murali Krishna focuses on AI-powered healthcare and energy efficiency.
Debt Financing on the Rise
Startups are increasingly turning to debt financing for sustainability. Krushant Pandya explained: "Debt is now used for fintech lending, working capital, and acquisitions, ensuring startups have cash flow-backed sustainability."
On profitability, investors agreed that strong unit economics are key. Murali Krishna pointed out: "VC funding should drive expansion, not cover product losses." Romit Mehta added: "Profitability depends on context—Zepto proved that strong retention can make profitability inevitable."
As the early-stage investment landscape evolves, founders and investors alike must focus on market potential, strong leadership, technological differentiation, and sustainable growth. Whether building unicorns or simply scaling efficiently, success lies in the ability to adapt and execute with precision.
