""It's a funky time," said Aileen Lee, founder and managing partner of Cowboy Ventures, on stage at TechCrunch Disrupt 2025. The longtime VC noted that the rules of investing have significantly shifted now that some AI companies are leaping from "zero to $100 million in revenue in a single year." However, Lee also noted that, based on her firm's research, Series A investors aren't just seeking rapid revenue growth. "It's an algorithm with different variables and different coefficients.""
""I think this game has changed, and it is changing dynamically," he said. McNeill noted that Series A investors are now applying the same rigorous standards to seed-stage startups that they previously reserved for more mature companies. "I think a lot of investors have figured out that the breakout companies, in most cases,don't have the best tech," McNeill said, about why Series A VCs are looking so closely at startups' ability to attract and retain customers. "They have the best go-to market.""
VC investment approaches have shifted because some AI companies can scale from zero to large revenue very quickly. Series A investors now evaluate a broader set of variables beyond rapid growth, including whether a startup generates data, the strength of its competitive moat, founders' past accomplishments, and the product's technical depth. Rapid early revenue often fails to guarantee follow-on funding as investors apply later-stage rigor to earlier rounds. Strong go-to-market execution frequently drives breakout success even when technology is not the most differentiated, while durable technical moats and data advantages support long-term value.
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