Do Non-AI Startups Still Get Funding? & How AI Changes Everything in Company Building

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About this episode

The startup landscape has fundamentally transformed. AI dominates headlines, venture capital flows differently than just a few years ago, and many unicorns are worth less today than at the peak of the hype cycle. David Rosskamp, founder and Managing Partner of Magnetic, shares insights with Fabian on current challenges and opportunities in company building.

Resilience as the Foundation of Successful Companies

Despite all technological upheavals, the fundamental principles of entrepreneurship remain constant. "The fundamental principles of sustainable company building haven't changed," explains Rosskamp. Resilience becomes the decisive factor – especially in times of overheated markets and volatile valuations.

Companies must now more than ever focus on efficiency and long-term stability. This means: deploying capital efficiently, not blindly chasing every tech wave, and creating a solid foundation that can weather difficult market phases.

AI as Horizontal Technology: Opportunity and Challenge

Artificial intelligence isn't an isolated technology for a few industries – it's a "horizontal technology" that will penetrate every sector. For startups, this represents both opportunity and threat.

The opportunity: Founders can leverage AI to develop products faster and conquer markets. Development cycles shorten, new business models emerge, and existing industries get disrupted.

The challenge: When everyone has access to similar AI tools, differentiation becomes harder. Startups must think beyond pure technology and develop real competitive advantages.

The End of Simple Defensibility?

A central question occupies many founders: Does the classic USP still exist, or has everything become copyable? The answer is nuanced. While technical features can be replicated faster, other lines of defense remain:

• –Network effects: The more users, the more valuable the product becomes
• –Unique datasets: Proprietary data as competitive advantage
• –Operational excellence: Execution often makes the difference
• –Customer loyalty: Strong relationships are hard to copy

Rapid product development alone is no longer sufficient. Companies must build and continuously strengthen multiple lines of defense.

Fundraising in the New Reality

The venture capital market has changed dramatically. While capital seemed unlimited in 2020/21, today there's a significantly more rational valuation culture. Many former unicorns are experiencing down rounds – their current valuations are below peak levels.

For founders, this means:

• –Efficient capital deployment becomes more important than growth at any cost
• –Due diligence becomes more thorough, investors more selective
• –The balance between "how much is right" and "I'll take whatever I can get" needs readjustment

Lessons from Down Round Reality

Down rounds are painful but often necessary corrections of inflated valuations. Rosskamp shares his perspective on how it feels when your own company faces a down round and what lessons can be learned.

The most important insight: Valuations are just snapshots. What matters is the long-term building of a sustainable, profitable company.

Investment Strategy: Focus Over Breadth

Magnetic has consciously focused on just nine assets – an unusual strategy in times when many funds spread their portfolios widely. This concentration allows for deeper involvement in each investment and creating real added value.

Fund Building 2015 vs. 2025

Rosskamp reflects on the differences in building a venture capital fund between 2015 and today. The landscape has fundamentally changed – from available capital amounts to investor expectations to the business models being valued.

The Question of Personal Branding

Rosskamp's perspective on personal branding is also interesting. While many VCs today focus heavily on their personal brand, he pursues a different approach. The focus lies on working with portfolio companies, not on personal visibility.

Conclusion: Back to Basics

Despite all changes, one truth remains: Successful companies are built by teams that understand and implement fundamental business principles. AI, new fundraising realities, and changed market conditions are important factors – but they don't replace the necessity of creating real customer value and building a resilient company.

The most important message for founders: Use the new tools and opportunities, but never lose sight of the fundamentals. Efficiency, customer focus, and long-term thinking are more important today than ever.