Startups Category
How Smaller Funds Can Access Top Deals In A Competitive Market
By Andrew Gershfeld For a long time, smaller venture funds leaned on the same advantages: speed, flexibility and deep sector expertise. Conventional wisdom held that while big firms moved slowly, smaller ones could act swiftly, write early checks and provide highly targeted support in a narrow space. That story no longer holds up. Big funds have learned to play smallAndrew Gershfeld The largest firms now look less like monolithic institutions and more like multidisciplinary studios. They hire domain-specific advisers, create sector-focused practice groups, and develop detailed post-investment playbooks, offering the same “tailored” value propositions that once distinguished niche funds, and with more resources. The numbers underline the tilt. In 2024, 30 funds captured close to 75% of all venture dollars. Researchers also found that 74% of persistent VC success comes from better deal flow after early wins. Once a firm builds credibility, it gets preferential access to the most promising startups, and the cycle reinforces itself. Why early access matters more than expertise Money looks the same to every founder. Expertise can be purchased — whether through consultants, advisory boards or strategic hires. What cannot be replicated is the trust built before a round becomes competitive. That is where smaller funds still have an opening. The real advantage is not expertise but access — specifically, early access. By the time a startup is widely circulating its deck, the outcome already favors whoever has been in the room with the founder from the get-go. One clear example is Initialized Capital’s early bet on Coinbase. In 2012, out of a $7 million debut fund, the firm wrote a $300,000 check into the crypto exchange’s seed round, when most investors dismissed the sector as fringe. By the time of its IPO in 2021, that stake was worth $2.4 billion. What set Initialized apart was being in the room early before the deal became obvious. What successful small funds are doing differently Some smaller funds are already adapting. They no longer think of themselves as check-writers waiting for polished pieces. Instead, they operate as active participants in a founder’s journey well before the company raises institutional capital. That shift shows up in specific behaviors. Smaller funds are mapping relationships with accelerators, angels and operators months ahead of a raise. They spend time in communities where founders are still testing ideas. They make introductions — to customers, hires and partners — at a moment when those introductions can change a company’s trajectory. They also mobilize their portfolios. Founders are often the best scouts, and funds that cultivate reciprocal relationships expand their reach in a way no spreadsheet of leads can. Even in competitive areas like AI or biotech, smaller funds can differentiate by serving as a bridge to strategic players. A warm introduction to Nvidia, Microsoft or a top-tier research lab validates a startup long before an institutional round is announced. These are the kinds of moves that earn trust before the larger firms even notice the opportunity. The mindset shift What it comes down to is mindset. Smaller funds can no longer think of themselves as investors selling capital. They need to act as nodes in a network: connecting earlier, engaging more personally, and maintaining persistence long after a term sheet is signed. In today’s market, competition for quality deals has never been fiercer. The firms that succeed won’t be the ones who claim they are faster or more specialized. They will be the ones who build trust before capital is even on the table. Smaller funds can still win, but only by rewriting the playbook altogether. Andrew Gershfeld is a general partner at Flint Capital, a VC firm investing in early-stage startups in AI, cybersecurity and digital health, and helping them expand into the U.S. market.
AI Is Gorging On Venture Capital. This Is Why ‘Physical AI’ Is Next
By Alberto Onetti From venture capital to AI capital? Silicon Valley continues to set the pace for global innovation. In 2025, scaleup investments reached $111 billion. Of that, a staggering $103.5 billion — 93% of the total — went into AI. In a nutshell, “VC investments” in Silicon Valley now essentially mean “AI investments.” For every dollar invested in technology, 93 cents flow into AI. The artificial intelligence sector is literally gorging on venture capital. These are just some of the findings of our latest report, “Physical AI. Shaping the Market of the New Possible,” created by Mind the Bridge alongside Crunchbase and unveiled at our latest Scaleup Summit in San Francisco earlier this month. Whether this proves to be a bubble or a long-term global trend is still unclear. As Crunchbase News Senior Data Editor Gené Teare pointed out at the opening of the summit: “We are two to three years into a new investment cycle. Despite the billions raised by foundation model companies, we are still in the early stages of funding to AI, which will shape the next two decades.” What is clear is that Silicon Valley is betting everything on AI. And when the world’s biggest “casino” goes all in, it’s hard to imagine the game ending any other way. Physical AI: The next leap in the AI revolution But within AI, there are multiple waves. The first major wave was generative AI. After the billion-dollar rounds of OpenAI, Anthropic and Inflection AI in 2023, capital concentrated around just a handful of foundational model players. By 2025, OpenAI ($40 billion) and Anthropic ($13 billion) alone absorbed the lion’s share of the $80 billion invested in the sector. The lower figures of 2024 did not mark a slowdown, but rather a physiological pause after these gargantuan rounds, with players focused on scaling operations and deploying the capital already raised while waiting for the next big wave. And that new wave already has a name: physical AI. Robots that can think, rather than simply execute preprogrammed commands, are becoming reality. The ambition is clear: to move AI beyond the screen and into the physical world. In just nine months of 2025, scaleups in this field have already raised more than $16 billion. Leading the way are Meta’s large-scale investment in Scale AI — a platform focused on training data for real-world applications in autonomous mobility, AR/VR and robotics — as well as Figure AI’s new $1 billion round for humanoid robotics, and Neuralink’s $650 million raise for brain-computer interfaces. This new physical AI wave — born from the convergence of generative AI, autonomous agents and the real world — opens up an almost limitless range of industrial applications. With tens of billions of dollars already flowing into the sector, physical AI carries the promise of revolutionizing manufacturing and beyond. If the trend holds, as I believe it will, Silicon Valley may be at the center of a new transformative cycle: from thinking machines (generative AI) to acting machines (physical AI). AI’s heavy hitters Generative AI scaleups account for 15% of companies but 45% of the capital invested historically in AI scaleups. Meanwhile, the emerging physical AI vertical seems to be following a similar trajectory: 254 scaleups (9% of the total) have already absorbed 18% of all AI funding. These dynamics highlight two key points: Silicon Valley: A century of reinvention Once again, Silicon Valley confirms itself as the undisputed epicenter of global innovation. Over the past century — starting with early defense-related investments in the 1930s and 1940s — it has been the cradle of groundbreaking technological transformations that reshaped the global economy: from integrated circuits and personal computers to the internet, mobile, cloud computing, social media and nowadays AI. Brace yourself for disruption. For more insights on Silicon Valley and physical AI, see Mind the Bridge’s reports, available for free download here. Alberto Onetti Alberto Onetti is chairman of Mind the Bridge and a professor at University of Insubria. He is a serial entrepreneur who has started three startups in his career, the last of which is Funambol, among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects — venture clients, venture builders, intrapreneurship, CVCs — with large multinational companies, as well as advising and training on this subject. Onetti has a column on Sifted (Financial Times) and several other tech blogs. Related Crunchbase query: Related reading: Illustration: Dom Guzman
Legal Tech Investment Hits All-Time High With Filevine Funding
Funding to legal tech startups has hit a record high in 2025, driven by investor enthusiasm for AI’s potential to bring more automation to the legal profession. Per Crunchbase data, companies in the legal and legal technology sectors have raised just over $2.4 billion so far in 2025 in seed through growth-stage funding. With over three months left in the year, it’s already the highest annual total on record. Filevine snags $400M A giant funding announcement this week played a big role in pushing the totals higher. Filevine, a provider of legal practice management software, announced Tuesday that it closed on two previously undisclosed rounds totaling $400 million 1. Insight Partners led the first round and joined Accel and Halo Experience Co. to co-lead the second. Founded in 2014, Salt Lake City-based Filevine has expanded its platform over the years to cover more tasks for legal practices. Use cases touted on its website include time tracking, billing, case management software and secure document management, among others. Filevine plans to use the funds in part to continue expanding its AI capabilities. The company said it counts nearly 6,000 customers and 100,000 users. Other big fundraisers, and plenty of seed deals too Several other startups have also closed on sizable funding this year, including: Notably, however, the boom in legal tech venture funding isn’t only about big rounds for prominent unicorns. The intersection of AI and legal work is one of the more active areas for seed funding, a trend we first observed last year and that has continued into 2025 as well. Nothing mysterious here For those seeking an explanation for why legal tech funding is on the rise, there is an obvious one that comes to the fore. In essence: Much legal work is boring and repetitive, which makes it well-suited to offload more tasks to AI. In fact, among all professions impacted by artificial intelligence, legal work is expected to be one of the most affected by automation. In one oft-cited Goldman Sachs report, analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload. On another side note, in addition to being repetitive, legal work also tends to be expensive, as anyone who has hired a lawyer can probably attest. While it remains to be seen whether AI will reduce the cost of legal services, it should at least free up time for lawyers and support staff to put their billable hours to the most productive use. Related Crunchbase query: Related reading: Illustration: Dom Guzman
The rise of retail investors in secondaries, and why delayed IPOs will become the norm
Retail investors are increasingly shaping the secondary market. In Q4 2024, platforms like EquityZenreportedthat 86% of total transaction volume came from retail participants—an eye-catching shift as tools like Forge and EquityZen promise broader access to private shares. But does more access mean more opportunity, or more risk? Today onEquity, Rebecca Bellan is joined byJared Carmelof Manhattan Venture Partners to dig into what he calls a “once-in-a-generation opportunity” in secondaries, why he’s not crazy about the increase of retail investors, and how secondaries provide a “pressure relief valve” that could keep startups private well past their startup years. Listen to the full episode to hear more about: How MVP has worked to “institutionalize” secondaries out of the Wild West of investing.Why “informational asymmetry” makes some secondary offerings a raw deal for retail investors.How a sluggish IPO market is catalyzing a robust secondaries market that creates a liquidity flywheel for VC.And Jared’s prediction that in a few years, the secondaries feedback loop will delay IPOs up to 20 years. How MVP has worked to “institutionalize” secondaries out of the Wild West of investing. Why “informational asymmetry” makes some secondary offerings a raw deal for retail investors. How a sluggish IPO market is catalyzing a robust secondaries market that creates a liquidity flywheel for VC. And Jared’s prediction that in a few years, the secondaries feedback loop will delay IPOs up to 20 years. Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday. Subscribe to us onApple Podcasts,Overcast,Spotifyand all the casts. You also can follow Equity onXandThreads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodeshere.
Cast your vote: Help shape the TechCrunch All Stage agenda
TechCrunch All Stageis just around the corner — and you get to help shape the agenda. From a competitive pool of applicants, two of the six visionary finalists are one step away from leading a roundtable session on July 15 at SoWa Power Station in Boston. Your vote determines who makes it. Audience Choice voting closes May 2 at 11:59 p.m. PT.Choose wisely — you only get one shot. While you’re at it,grab your ticket now to save up to $210and lock in your spot for the winning sessions — some of the most tactical, founder-focused conversations of the day. Don’t miss your chance to connect, learn, and scale smarter. Finalist sessions Building team intelligence: How product-led innovation transforms collaborative problem-solvingJeff Chow, Chief Product and Technology Officer, Miro AI can automate, but it can’t replace the magic of a well-connected team.Jeff Chow, Miro’s CPTO, shares how to design products that don’t just streamline tasks but also supercharge collaboration. From boardroom strategies to product blueprints, he’ll show how inclusive, human-first design turns communication chaos into high-performance teamwork. What venture investors are looking for in AI investment targets in enterprise startups in 2025Darrell Etherington, Head of Network and Sourcing, OMERS Ventures AI hype is everywhere — but enterprise buyers want more than just buzzwords.Darrell Etheringtonof OMERS Ventures offers a rare insider’s take on what actually gets enterprise-focused AI startups funded in 2025. Discover what today’s investors demand, and how your pitch can rise above the noise. How I created a $40 million business from my kitchenMike Kurtz, Founder, Mike’s Hot Honey From pizza slice to pantry staple,Mike Kurtztook a homemade recipe and turned it into a $40 million cult brand. In this spicy session, he’ll break down how he sparked a movement with zero marketing budget, proving that great taste and word-of-mouth hustle can go a long way. From fundraising to IPO: How to build a PR & marketing engine that drives growthNikki Parker, EVP, Marketing and Communications, Insight Partners Great products don’t sell themselves — especially when you’re chasing growth and an IPO.Nikki Parkerfrom Insight Partners reveals how to architect a high-impact PR and marketing machine that commands attention, earns trust, and drives exponential value. If you’re ready to scale, this session is your playbook. Thriving with anxiety: How startup founders can turn fear, pressure, and self-doubt into their greatest advantageDr. David H. Rosmarin, Associate Professor, Harvard Medical School Startups are pressure cookers — and anxiety comes with the territory. But what if it could be your edge?Dr. David Rosmarin, a leading Harvard psychiatrist, shares how founders can reframe fear and stress into clarity, confidence, and decisive action. Come for the science, stay for the mindset shift. Mistakes startups make and hacks when raising money from VCsHyuk-Jeen Suh, General Partner, SkyRiver Ventures Pitching VCs? There’s a fine line between a compelling story and a costly misstep.Hyuk-Jeen Suhof SkyRiver Ventures pulls back the curtain on the mistakes that stall fundraising — and the smart, scrappy hacks that actually work. If you want to land your next round, don’t miss this one.
Troubled startup CaaStle is now facing two new lawsuits and more allegations
CaaStle, the embattled fashion startup whose board of directors accused its founder, Christine Hunsicker, of financial misconduct, is starting to face lawsuits from a partner and a supplier over missed payments and more allegations of fraud. Asfirst reported by Axiosand by suits seen by TechCrunch, CaaStle is being sued by P180, a vehicle it launched to invest in companies that used CaaStle technology, and by EXP Topco, an apparel company that says CaaStle never paid it after reaching a settlement for copyright infringement. A representative for CaaStle did not immediately respond to TechCrunch’s request for comment. TheP180 suitalleges, “Nothing about CaaStle was true.” The lawsuit claims that CaaStle tried to hide details of its income and financial stability from P180. “It then fraudulently induced P180, among other things, to raise capital and take out multiple loans in the expectation that P180 would acquire viable assets, which P180 ultimately did,” the suit alleges, adding that CaaStle also tried to force the two to merge. The suit goes on to say that because P180 believed it was misled, its “investors took full control of the board,” the suit continues. “P180 has been harmed in excess of $58 million and seeks recovery of those proceeds, rescission of contract, and unwinding of corporate ties between itself and CaaStle.” Meanwhile, EXP Topco is also suing. Italleges that CaaStle breacheda settlement agreement by not paying fines after reaching the settlement over alleged copyright infringement. And Axios is alsoreporting on rumors of a possible class-action lawsuitagainst an investment firm that brought CaaStle retail investors, although it didn’t report the name of the investor. Axios first reported the news of CaaStle’s financial troubles a month ago. Hunsicker, the company’s founder, resigned from the board and stepped down from her role as CEO when the company said it was investigating allegations of financial misconduct. The company is exploring bankruptcy and secured $2.7 million in financing to help that process, Axios further reported. CaaStle raised over $530 million total, with its last round raised in 2019 at $43 million, PitchBook estimates. In April, the board confirmed to TechCrunch that its financial circumstances were so dire at that time that it had to furlough employees. Should that whole $530 million be gone, this would be one of the largest startup fraud cases in recent history. In comparison, Frank, the student loan application startup, was purchased by JPMorgan for $175 million. Frank’s founder, Charlie Javice,was found guilty of fraud last month. TechCrunch spoke to two former employees who said they were not surprised to hear that the company had financial troubles, though they didn’t witness any of the alleged fraud. One former employee, who asked to remain anonymous, doesn’t recall the company holding updates about its financial health or how well it was doing. “I think everyone laughed it off and was like, ‘Oh, we probably don’t make any money,” the employee told TechCrunch. When asked for a reaction to the fraud allegations, this person said, “I don’t think anyone expected it.”
Deel officially agrees to be served legal papers in Rippling’s lawsuit
HR tech giant Deel says it has formally accepted to be served legal documents in its ongoing court battle with rival Rippling in Ireland. This ends weeks of suspense afterRippling’s bailiffs couldn’t find Deel’s execsto serve them — only for Deel’s CEO and top lawyerto turn up in Dubai. Deel CEO Alex Bouaziz, along with Deel lawyers Asif Malik and Andrea David Mieli, all agreed to accept service through Deel’s Irish law firm today, Deel confirmed to TechCrunch. Deel Inc., which is Deel’s U.S. entity, was already served on April 16, an affidavit filed by Rippling this morning in Irish court shows. “Today in court in Dublin Hayes Solicitors agreed to accept service on behalf of all four parties,” a Deel spokesperson told TechCrunch. In the affidavit filed this morning, Rippling repeated that it hadn’t been able to serve Bouaziz, Malik, and Mieli, detailing its efforts to do so in France and Italy. For example, Rippling hired French bailiffs to serve Bouaziz at a listed address in Paris on April 10, but only stumbled upon a relative who told them Bouaziz was in Dubai. On April 15, TechCrunch reported Bouaziz was in Dubai, with Deel not responding to requests for comment at the time. However, 10 days later,Deel told TechCrunchthat Bouaziz “lives in Israel” and was only in Dubai for a few days to celebrate Passover. TechCrunch asked Deel if it can clarify where Bouaziz is currently located, but Deel declined, citing privacy reasons. Deel slammed the idea that its executives have been avoiding getting served, despite Rippling’s failed attempts to do so through various process servers. “It’s a misrepresentation that anyone was avoiding service and that narrative was clearly being used as a public smear tactic,” Deel’s spokesperson said. Deel told TechCrunch that Malik’s move to Dubai had been planned for over a year, well before Rippling’s lawsuit. Regarding Andrea David Mieli, whom Rippling said in their affidavit they had been unable to serve in Italy, Deel said he lives and works from home in Italy and was available. The lawsuit centers on Rippling’s claims that Deel bribed one of its employees in Ireland, Keith O’Brien, to spy on its internal affairs on behalf of Deel. And O’Brien himself testified that he had been spyingin a lengthy affidavit. After weeks of silence, Deel is very publicly fighting back, filing a countersuit in the U.S. last week, making various accusations against Rippling, including that it cultivated its own insider inside Deel. In response, Rippling CEO Parker Conradtook to Xto post, “Nowhere does Deel dispute our central allegation — that@Bouazizalexpersonally recruited a spy to steal rippling’s trade secrets, and personally directed the theft.” Rippling did not respond to a request for comment.
Vote for the session you want to see at TechCrunch All Stage on July 15
We’ve been blown away by the overwhelming response to speak atTechCrunch All Stageon July 15 at SoWa Power Station in Boston. After thorough consideration, we’ve selected six standout finalists. The power to choose who will take the stage and share their startup scaling expertise is now in your hands! This Audience Choice voting will be open until May 2 at 11:59 p.m. PT. You get one vote, one speaker — make it count! Meet the finalists Get to know the six exceptional Audience Choice finalists and their proposed sessions, and vote for the speaker you think should take the lead in their own roundtable session. Building team intelligence: How product-led innovation transforms collaborative problem-solvingJeff Chow, Chief Product and Technology Officer, MiroWhat venture investors are looking for in AI investment targets in enterprise startups in 2025Darrell Etherington, Head of Network and Sourcing, OMERS VenturesHow I created a $40 million business from my kitchenMike Kurtz, Founder, Mike’s Hot HoneyFrom fundraising to IPO: How to build a PR & marketing engine that drives growthNikki Parker, EVP, Marketing and Communications, Insight PartnersThriving with anxiety: How startup founders can turn fear, pressure, and self-doubt into their greatest advantageDr. David H. Rosmarin, Associate Professor, Harvard Medical SchoolMistakes startups make and hacks when raising money from VCsHyuk-Jeen Suh, General Partner, SkyRiver Ventures Building team intelligence: How product-led innovation transforms collaborative problem-solvingJeff Chow, Chief Product and Technology Officer, Miro What venture investors are looking for in AI investment targets in enterprise startups in 2025Darrell Etherington, Head of Network and Sourcing, OMERS Ventures How I created a $40 million business from my kitchenMike Kurtz, Founder, Mike’s Hot Honey From fundraising to IPO: How to build a PR & marketing engine that drives growthNikki Parker, EVP, Marketing and Communications, Insight Partners Thriving with anxiety: How startup founders can turn fear, pressure, and self-doubt into their greatest advantageDr. David H. Rosmarin, Associate Professor, Harvard Medical School Mistakes startups make and hacks when raising money from VCsHyuk-Jeen Suh, General Partner, SkyRiver Ventures