What We’d Share With Every Founder Ahead of 2025
As we reflected on the past year and looked ahead to 2025, our team kept coming back to three specific insights. If we could sit down with every founder that is starting a new venture in 2025, these are the lessons we’d tell them. And yes, AI made its way into this list…more than once :-)
Focus On What You Know, Not The Hype
Early-stage founders today face an overwhelming amount of “noise” in the startup ecosystem. While AI continues to dominate conversations — and rightly so — we’re seeing a growing number of founders rushing to do “something with AI” without addressing a real market problem that they deeply understand or bring unique expertise.
Instead of chasing the AI hype, founders should focus on applying AI to problems they know inside out and are passionate about solving. Take, for example, Elio and TrialKit from the UpWest portfolio (both 2024 investments). Both are vertical AI solutions tackling complex challenges in large, well-defined markets. Their founders are deeply rooted in the industries they serve, leveraging their expertise and unique insights to build defensible, scalable businesses.
This focus on expertise is even more important as AI becomes “just technology.” In our recent conversation with Professor Nadav Cohen, we discussed how the line between AI and technology is rapidly blurring. Before long, saying your product is “AI-powered” will be as commonplace as saying it’s “technology-powered.” The real differentiation will come from solving tangible problems with unique, thoughtful approaches — not just from using AI.
Don’t Discount The Fundamentals
Although the excitement around AI is justified, we’ve seen many founders so enamored by the technology that they overlook critical fundamentals of building a successful business. AI, as powerful and transformative as it is, is only a tool. It’s not a business model on its own for companies building at the application layer. Yet, too often, founders become overly focused on the technology itself — its potential, complexity, and buzz — while neglecting foundational aspects such as go-to-market strategy, customer acquisition, and pricing.
For example, a well-crafted go-to-market strategy will still be the difference between success and failure for many founders, regardless of the AI product they have built. We have seen this play out with Imubit and Stampli, two of our portfolio companies we backed in 2015 & 2016 respectively. Ultimately, founders must strike a balance. AI can be the spark that differentiates a product, but it’s the strategy behind it — how the product is delivered, adopted, and monetized — that fuels long-term success.
Pre-Seed Funding Can Help You Establish Stronger Foundations
For many founders, raising capital has become more challenging as the bar for fundraising continues to rise. Early-stage startups today are expected to show more traction and prove their viability sooner — expectations that can be difficult to meet at the Seed or Series A stage. This is where Pre-Seed funding plays a critical role. Unlike later stages, Pre-Seed capital typically comes with less pressure for specific metrics, giving founders the opportunity to focus on what matters most: testing ideas, validating their vision, and building a strong foundation. It’s a chance to gain early traction, sharpen your story, and ensure you’re solving real problems for your target market. For example, some of our recent investments such as Ecton and Livble, as well as our 2013 investment in SentinelOne, started with a Pre-Seed check from us in order to validate their initial offering; All successfully built strong foundations and raised several financing rounds.
If you’re still refining your vision and laying the groundwork, don’t hesitate to pursue a Pre-Seed round — even if it means working with a slightly shorter runway. Pre-Seed funding isn’t about racing ahead; it’s about creating the space to get the fundamentals right. By fundraising in this early stage, you’ll position yourself far more effectively for future raises, entering the Seed stage with a validated foundation and a clearer path to long-term success.
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This past year has been one of the most challenging we’ve ever experienced. Following October 7, 2023, Israeli founders faced unprecedented obstacles — juggling work, family, and pressing responsibilities back home alongside their business. Yet, amidst these hardships, we saw something remarkable: founders, companies, and the entire tech ecosystem rising with unshakable resilience and determination. Their strength, perseverance, and relentless drive to move forward continue to inspire us every day. We are incredibly proud to stand behind Israeli founders and support them on their journey.
Here’s to a year of bold ideas, building together, and hoping for more peaceful days ahead.