What does it take to build a venture-backed company today?

The venture landscape has changed significantly over the last few years.

Capital is more concentrated, investors are becoming more selective, AI is changing how quickly companies can be built, and founders are facing a higher bar when it comes to proving that their business can reach venture scale.

For the latest episode of Nothing Ventured, our founder and CEO Aarish Shah sat down with Adam French, Partner at Antler and former operator and co-founder of Scalable Capital, to explore what is changing across venture capital and what it means for founders building companies today.

Building outside London

Geography remains an important part of the UK startup ecosystem.

Around 25 to 30% of Antler’s UK applications come from outside London, reflecting the depth of entrepreneurial talent across the country. Founders are building ambitious businesses in the North West, Scotland and other regions, while much of the venture ecosystem remains concentrated around London.

Access to information has become easier. Founders can learn about fundraising, hiring and building a company from almost anywhere. The harder part can be accessing people who have actually been through it and can help founders understand how the ecosystem works in practice.

That density of founders, investors and experienced operators can make a meaningful difference. Being around people facing similar challenges creates opportunities to share knowledge, challenge assumptions and build relationships that can continue well beyond an accelerator programme.

For the UK to build more venture-scale companies, connecting that wider pool of founders with the people and networks around venture capital will remain important.

What makes a company capable of scaling?

The conversation also touched on one of the biggest questions in venture: what separates a company with potential from one capable of becoming a major outcome?

There is no simple formula. Venture capital operates around a small number of companies generating a very large proportion of returns, which means investors are looking for businesses with the potential to grow significantly beyond their initial market.

For founders, that creates a need for clarity around the problem they are solving, the size of the opportunity and the path to building a much larger company.

It also changes how founders should think about their early decisions. Building a long list of features may be technically easier than ever, particularly with AI, but that does not automatically create a stronger business.

AI is changing how companies get built

AI has dramatically reduced the time and cost involved in building software.

That creates huge opportunities for early-stage companies, while also making product discipline more important. When adding another feature is relatively easy, it can become tempting to build everything at once.

The stronger starting point is still understanding a specific, important problem and building something that solves it well.

As companies grow, the challenge becomes deciding where to put limited capital and team capacity. AI can accelerate product development, but founders still need to decide which problems are worth solving and which opportunities deserve investment.

Data can inform venture, but the outliers are difficult to predict

The scale of data available to investors has also changed.

Antler receives around 150,000 applications globally, creating a substantial dataset around founders, businesses and the factors that emerge during its investment process.

There is a natural temptation to use that data to identify patterns in successful companies. The difficulty is that venture investing is heavily driven by outliers. The companies that generate exceptional returns may share characteristics with previous successes, while also looking very different from them.

That makes judgement and time spent with founders particularly important. An application can provide useful information, but seeing how a team thinks, responds to problems and develops an idea over time gives investors another layer of insight.

A more concentrated funding environment

Venture capital is also becoming increasingly concentrated.

A smaller proportion of companies are attracting a larger share of available funding, while breakout businesses are raising increasingly substantial seed rounds. That creates a different fundraising environment for early-stage founders.

The implications extend beyond fundraising itself. Founders need to understand how much capital they actually require, what milestones that capital needs to fund and what evidence they will need before approaching investors again.

Runway, burn, growth and unit economics become increasingly important as the funding environment becomes more selective.

For founders building towards venture scale, understanding the numbers early can help connect day-to-day spending with the bigger decisions around growth and fundraising.

Building through a changing market

The venture ecosystem will continue to evolve. AI is changing how companies are built, capital is becoming more concentrated, and founders have access to more tools and information than ever before.

The challenge is turning those changes into a coherent strategy.

For early-stage companies, that means staying close to the problem being solved, understanding the scale of the opportunity, building with discipline and keeping a clear view of the financial resources required to get to the next stage.

Those fundamentals give founders a framework for making better decisions as the market around them changes.

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