This week on the startup to scaleup journey:
- The negotiation you lose before the term sheet arrives
What if the most consequential negotiation in your next funding round takes place weeks before the term sheet arrives - and you're the only person in the room?
Most founders imagine the real negotiation begins when the offer lands. But by the time a formal term sheet is produced, the decisive moves have usually already been made.
Experienced investors do not write a term sheet and then negotiate it. They probe, weeks in advance, on valuation, on board composition, on the shape of the round - testing how the founder reacts, looking for the zone where agreement is likely.
Only when they believe they have found terms the founder will accept do they commit them to paper. By that stage, the document is not an opening position. It is a verdict.
The negotiation that matters most, then, is the one that happens in this soft phase - and much of it happens not across the table at all, but inside the founder's own head. It is shaped by the instincts that govern every investor interaction: the desire to be liked, to be fair, to keep momentum, to not seem difficult. These instincts feel like virtues. They are rewarded almost everywhere else in life. In early-stage fundraising, they are precisely what sophisticated investors are trained to recognise - and to use to their advantage.
This is the uncomfortable territory this week's piece enters. For founders who have done this before, or who are working with advisors who have, much of what follows will already be familiar. But for the majority undertaking an early-stage round for the first or second time, something worth understanding is in play. At every layer of the negotiation - mental framing, internal dialogue, the specific words spoken - the default founder instinct runs in the wrong direction. And the discipline of running the other way is what separates those who preserve leverage from those who quietly surrender it...
This week on the startup to scaleup journey:
- Why VCs now fund what they once rejected
What if the reasons VCs rejected your startup five years ago are precisely why they'll fund you today?
The venture capital playbook has been turned inside out. For a decade, mainstream investors chased frictionless markets, viral growth loops, and zero marginal cost distribution. Hardware was "too capital-intensive." Regulated industries were "too uncertain." Complex institutional sales were "too slow." These weren't just seen as messy challenges - they were disqualifying factors that sent founders to the reject pile.
But when AI agents can rebuild entire startup portfolios in 24 hours, software alone offers no protection. The characteristics that made businesses unfundable in 2021 may be exactly what makes them defensible in 2026. As we explored in February's newsletter, hardware and proprietary data have emerged as two of the deepest moats in the AI era. Today, we examine the third and perhaps most underrated for DeepTech founders: the mess itself...
This week on the startup to scaleup journey:
- A great investment proposition isn't enough to get you funded in 2026
Every successful fundraise depends on three things: targeting the right investors, developing a strong investment proposition, and executing an effective campaign. These pillars haven't changed in the sixteen years Duet has been advising early-stage companies. What has changed - dramatically - is their relative importance.
A decade ago, developing the proposition was the hardest part. Understanding what investors wanted (the specific investment criteria) was genuinely difficult. The information wasn't public. Founders who could articulate their opportunity through an investor's lens had a meaningful edge. A reasonable weighting of relative difficulty across our three factors might have therefore been: 30% investors; 40% proposition; 30% campaign.
Today, based on patterns observed across more than seventy client engagements and recent shifts in the market, our assessment shows these weightings have significantly changed:
Investors: 30% → 45%
Proposition: 40% → 10%
Campaign: 30% → 45%
The visible landscape of self-help support that has erupted in recent years - podcasts, newsletters, LinkedIn posts, pitch deck templates etc. - relates almost entirely to the proposition-building pillar, the factor that now matters least as the knowledge gap has reduced. The problem is that founders absorb this content, assume most of the hard work is done, and walk into a process they're unprepared for. The illusion is that fundraising has become easier – but of course we all know that it hasn't.
The key to increasing the probability of funding success now sits heavily within the other two pillars: targeting the right investors and executing an effective campaign. By sharing our understanding of how these have changed we hope founders will be better prepared to conquer the funding challenge of 2026...
This week on the startup to scaleup journey:
- The funding transition that catches most first-time founders off guard
You raised your first round. Angels backed you. A small privately backed fund came in alongside them. These investors moved on personal conviction - they believed in you, they shared your vision, and they made their decisions quickly. The money landed, the cap table took shape, and the business started to move.
Now you're preparing for your next round, this time with a VC. Your ask is bigger, but your story is sharper. You've made clear progress, and you know how to pitch. Why would the outcome be any different this time?
Because the person across the table answers to a completely different set of pressures. They aren't deciding whether they believe in you. They're deciding whether they can build an investment case that will survive the scrutiny of colleagues whose job is to find the holes.
If you don't understand those pressures before you walk in, you will spend months in a process that was never going to close...
This week on the startup to scaleup journey:
- Why brilliant engineers struggle as CEOs - and the identity shift that changes everything
What happens when the person who built the breakthrough technology isn't naturally suited to scale the company around it?
It's a question that haunts every technical founder approaching their first serious funding round. You've solved the hard engineering problem, proven the technology works, and assembled a believing team. But now investors are asking different questions - about market timing, competitive positioning, commercial strategy - and your instinct to dive deeper into technical details isn't serving you anymore.
The problem isn't that you need to learn "business skills." It's deeper: transitioning from technical founder to CEO is a fundamental identity change that requires you to redefine your value proposition entirely.
Most brilliant engineers never make this shift successfully because they approach it as a skill-building exercise rather than an identity evolution...
This week on the startup to scaleup journey:
- The AI compliance deadline you think doesn't apply to you
Do you use predictive analytics in your SaaS product? Route optimisation in your logistics platform? Computer vision in your hardware? If so, you may well be building an AI system under EU law - whether you call yourself an "AI company" or not.
And if you’re a UK founder thinking "EU law doesn't apply to me" - think again. The EU AI Act applies to any company placing AI systems on the EU market, regardless of where that company is incorporated. It is about where your customers are, not where you are based. If you have European users, you are in scope.
Why does this matter? Five months from now, the Act's full compliance requirements for high-risk AI systems are scheduled to become enforceable. Penalties can reach up to €35 million or 7% of global annual turnover. Investors are already factoring this into due diligence. Enterprise buyers are asking about regulatory readiness before signing contracts.
The startups most at risk are not the ones building "AI-first" products. They are the ones who have integrated AI into part of their solution and assumed none of this applies to them.
