Hard lessons European investors faced in 2025 - Part II

After exploring the major successes European investors had in 2025, a few days ago, it became clear that 2025 was equally defined by recalibration.

Behind the momentum and large rounds, 2025 imposed stricter rules. Liquidity was tighter. Expectations were higher. Follow-on funding required stronger proof points. Speed without defensibility faded quickly. Investors adjusted expectations around scalability, valuation, and long-term defensibility. Fundamentals moved back to center stage.

In this section, European investors share the lessons that changed how they evaluate, support, and back companies going forward.

Speed became the deciding variable 

As AI reduced technical and financial barriers to entry, it also accelerated market dynamics. In 2025, speed shifted from an operational advantage to a strategic requirement. Product development cycles have shortened significantly, enterprise procurement processes have accelerated, and competitive windows have tightened. 

Time-to-market became a decisive variable: incremental delays often translated into lost positioning, regardless of technical quality. In many cases, execution timing outweighed marginal product superiority.

As Viktor Minchev, Investment Principal at Eleven Ventures, observed:

“Long enterprise sales cycles were never attractive at early stages, but at least everyone played by the same rules. Enterprises are now racing to try and adopt AI - long sales cycles might mean you are not solving a truly critical problem. 

Companies can win not because of unbeatable technical differentiation, but because they are two or three weeks ahead of the next best competitor. As a pre-seed investor, speed is hard to price and even harder to benchmark. The good thing is that you only need to sign a value correctly a few times, and you can be greatly rewarded.”

The middle market is getting squeezed

If capital were concentrated at the company level, the same dynamic began to play out among funds. Scale, specialization, and brand increasingly defined competitive advantage. The broad, generalist model, once common across early-stage venture, faced mounting pressure in a market that rewarded clarity and edge.

As Tichomir Jenkut, Partner, Presto Tech Horizons, mentions:

1. “Mega-platform funds that are not price-sensitive at all at the Seed stage, and can later provide their portfolio winners with massive follow-on capital (Sequoia, a16z, General Catalyst).
2. Highly specialized early-stage funds with deep domain expertise, enabling them to move early and decisively within their niche (Sofinnova Partners in health and biotech, First Momentum in deeptech, Presto Tech Horizons in defense and security).
3. Funds with an exceptional flywheel brand that has become self-reinforcing, giving GPs unparalleled access to founders and deal flow (Earlybird, Bek Ventures, Credo Ventures).

Generalist funds without scale, specialization, or brand gravity will find it increasingly difficult to compete.”

If speed and capital concentration defined the surface of 2025, volatility defined its undercurrent. Market pressure exposed weaknesses quickly. Companies that appeared strong during expansion cycles often struggled once growth slowed or conditions shifted.

Secondaries are now more competitive markets

As secondaries became a standard tool in venture portfolios, another reality became clear: access is not evenly distributed. Liquidity may have improved, but much of the capital in the secondary market continued to flow toward a small group of highly visible companies and funds. That concentration raised prices and intensified competition.

As Rando Rannus, General Partner of Siena Secondary Fund explained:

Capital follows a good narrative and scaling strategy

If concentration defined company funding and secondaries, it also shaped both startup and fund-level fundraising. In 2025, capital clustered tightly around a small number of highly visible deals, leaving less oxygen for companies operating outside the spotlight.

As Daniel Gockler of Nesprit Ventures explained: 

“At the same time, the VC fundraising environment for first- and second-time funds did not ease in 2025. Securing LP commitments remains a highly fragmented, grind-heavy process, often requiring disproportionate effort for incremental progress.”

The lesson connects directly with earlier observations about fund archetypes and competitive secondaries. Just as only certain fund models may sustainably attract capital, and just as secondaries crowd around top names, startup fundraising is increasingly narrative-driven and concentrated. Performance alone is not always enough; visibility and positioning shape outcomes. 

At both the company and GP level, raising capital has become less about broad access and more about standing out in a crowded, selective market. As Dan Mihaescu, Founding Partner at GapMinder, shared similar lessons on this:

“The hardest lesson of 2025 was a reminder that stress reveals fundamentals very fast.

Across the market, we saw companies that looked strong on the surface struggle once conditions changed. Rapid growth or strong early traction often hid fragile unit economics, unclear ownership of sales, or leadership gaps. When volatility hit, these issues surfaced immediately.”

Hype doesn’t equal defensibility

If earlier cycles rewarded speed and positioning, 2025 demanded proof. Nowhere was that clearer than in AI. Early excitement translated into fast rounds and crowded categories, but momentum alone did not hold. As competition intensified, differentiation thinned, and many companies struggled to convert early interest into durable traction.

Patricia Pastor, General Partner at NextTier Ventures, also shares similar patterns:

“Investors learned to demand real execution: revenue, repeatability, and measurable impact. In fact, over 95% of enterprise AI pilots failed to deliver measurable business value.”

At the same time, the intensity of the AI race made durability even harder to maintain. Sarah Finegan, Associate Partner at Antler help us connect the dots:

“The amount of capital flooding the space and the speed at which competitors can move means that execution advantage can disappear quickly.”

Local ecosystems need more structure

As expectations rose for founders and funds, the same standard began to apply to ecosystem builders. In 2025, it became clear that supporting tech entrepreneurship is not a side initiative; it is an operational commitment that requires scale, systems, and sustained resources.

As Thanos Paraschos, angel investor and Managing Director at Startup Greece, shared:

“If you want consistent investor-ready founders and stronger pipelines, the ecosystem builder (and often the investor) must run with the discipline of a startup: clear KPIs, repeatable processes, and funding that matches the ambition. Good intentions and hustle aren’t enough when the bar for execution keeps rising.”

A fundable company is not the same as a good one

One of the clearest lessons of 2025 was the gap between operational strength and fundability. In tighter markets, strong traction and solid fundamentals did not automatically translate into successful raises. Narrative clarity, timing, and positioning became decisive variables.

As Mircea Ghita, Principal at Metis Ventures, mentions: 

“Assuming the next round will ‘just happen’ proved dangerous, pushing us to focus much earlier on capital efficiency and milestone discipline.”

Another hard lesson for founders in 2025 was how dramatically the Series A bar has moved, not only in the US, but increasingly across Europe. Here, Martina Vitezova, Managing Partner at Next Play and Chief Strategy & Value Officer at Everbot, adds:

“AI-native companies have reset the benchmark for speed and scale, which means even strong non-AI businesses are being measured against a different curve. Whether this is a structural shift or a cycle-driven distortion is still an open question.”

Additionally, in 2025, raising capital required more than execution; it required strategic storytelling and careful pacing. Follow-on rounds were no longer assumed; they had to be earned. 

Macro economics also influenced how capital was raised. As Dr. Jan Engels, Senior Investment Manager at HTGF observed:

“While total funding volumes remained high and selective deals reached record sizes, the average startup faced a higher risk of liquidity constraints. 

Bridge rounds became more common and, in many cases, the norm rather than the exception.”

Exits and M&As are never as simple as they look

In a tougher market, mergers and acquisitions came back into focus. Some founders saw them as a faster path to scale. Others turned to them when fundraising became uncertain. But 2025 reminded many investors that there are no shortcuts when it comes to integration.

As Adam Radzki, Angel Investor & Chief Growth Officer at HearMe, mentions:

Behind every deal announcement sits months of heavy lifting. Aligning incentives, merging cultures, integrating tech stacks, redefining roles, and rebuilding go-to-market strategies all demand far more energy than most teams anticipate.

How to prepare for better fundraising in 2026

If the past year reset expectations, then 2026 is poised to elevate them even further. While capital remains available in the market, it is now more concentrated, analytical, and less forgiving. Investors are increasingly looking for clarity in positioning, discipline in execution, and tangible evidence that companies understand their own milestones. Fundraising must no longer be treated as a standalone event separate from operations.

This is where you can use SeedBlink Core to your advantage. Don’t treat fundraising as just a series of meetings and deck revisions; embrace it as a managed campaign that drives results. With a dynamic, shareable company profile, you can replace traditional static presentations and engage investors more effectively. 

Organize your investor discovery by sector, stage, and geography to ensure that your outreach is targeted and relevant. Track interest and feedback in a single, easy-to-navigate platform, giving you visibility over your momentum and addressing any gaps in real time.

As we enter a market where follow-on rounds can no longer be assumed, and investor attention is limited, being well-prepared becomes a significant competitive advantage. Founders who approach 2026 with a clear pipeline, defined milestones, and structured investor engagement will operate with greater control and credibility.