I don’t know about you, but I am tired of the polite lies in the startup world.

We go to networking events. We drink warm beer. We tell each other that "investors are just waiting for the right opportunity" or that "the market is just a bit slow right now." We tell founders that if they just build a great product, the money will come.

It is all nonsense.

At our latest Rare Founders event, I decided I had enough of the fluff. I invited Ken Thomas from Backfuture VC to tell us the truth. Not the LinkedIn truth. The real truth.

Ken is a Principal at a fund that actually writes checks. He sees thousands of decks. He knows what is happening behind closed doors. And what he shared was brutal. It was uncomfortable. And it is exactly what you need to hear if you want to survive in 2026.

Here is the reality of fundraising right now.

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For a long time, we had this romantic idea of the "Pre-Seed" round.

The story went like this: You have a brilliant idea. You have a nice slide deck. Maybe you have a co-founder who looks smart. You go to a VC, pitch your vision, and they give you £200,000 to go and build it.

Ken made it very clear: That world is gone.

If you are operating on 2021 logic, you are already dead. In the US, maybe you can still raise on a dream and a handshake if you went to Stanford. But here in the UK and Europe? Forget it.

The definition of "Pre-Seed" has changed. Today, investors expect traction. They expect revenue. They expect you to have proven that people actually want what you are selling.

I asked Ken specifically about this because I see so many founders confused. They say, "But Vasili, how can I have revenue if I haven't built the product? And how can I build the product if I don't have the money?"

This is the "Chicken and Egg" excuse. And frankly, nobody cares.

We live in a world where AI has collapsed the barrier to entry. You can build an MVP in a weekend. You can create a landing page in an hour. You can automate a service with no-code tools for almost zero cost.

Because it is so easy to build, the value of "building" has gone down. Just having a product is not impressive anymore.

Ken said something that every founder needs to print out and stick on their wall:

"If you are waiting for funding to build, you are probably not going to get funded."

Investors are looking for people who will "chew a hole through a wall" to get what they want. If you are not even nibbling on the wall before you have the money, why would they believe you will suddenly become aggressive after they give you a check?

It costs you nothing to speak to a customer. It costs you nothing to get a Letter of Intent (LOI). It costs you nothing to validate your idea.

If you come to a VC today and say, "I am just building right now, I am not focused on sales," you are waving a giant red flag. You are telling them you are a hobbyist, not a business owner.

We all know AI is the only thing people are talking about. But there is a dangerous trap here.

A lot of founders are building what Ken calls "Wrappers." You take a model like GPT-4, you put a nice interface on it, and you sell it as a "copywriting tool" or a "legal assistant."

Wrappers are done.

The horizontal plays are dead. You cannot compete with the big models. The barrier to entry is too low. If you can build it in a week, so can 10,000 other people. And more importantly, OpenAI or Google will probably build your feature into their core product next month and kill your business overnight.

So, where is the smart money going?

Ken talked about the "unsexy" verticals. The boring stuff.

He gave an example of a company they invested in that works in air cargo.

Think about that. Air cargo. It is not cool. It is not sexy. It is not something you talk about at a dinner party.

But that is exactly why it is valuable.

The chances of a generic tech bro building a great AI product for air cargo logistics are basically zero. You need deep domain expertise. You need to know the problems. You need to know the customer.

If you are a "tech person" building tools for other "tech people," you are in a danger zone. Tech people are promiscuous customers. They try your tool, they get bored, they switch to the next one on Product Hunt. There is no loyalty.

But if you solve a boring, painful problem for a B2B company—like post-sales onboarding in manufacturing—that revenue is sticky. They don't want to switch. They just want the problem to go away.

If you are building AI, stop trying to revolutionize "strategy" or "creativity." Find a job that someone hates doing, and make it go away.

This is the darkest secret in the London ecosystem right now.

There are a lot of VCs walking around who are essentially zombies. They look alive. They act alive. They take meetings. They sit on panels. They ask for your data room.

But they have no money.

They are "warehousing" deals. This means they are listening to your pitch and keeping you warm, just in case they manage to raise their own fund in six months. They are using you to show their potential investors that they have "deal flow."

You are not a potential investment. You are bait.

I asked Ken how a founder can spot these zombies so they don't waste their time. His answer was simple, but most founders are too polite to do it.

Ask them: "When was the last time you wrote a check?"

You have the right to ask this. It is a business meeting. You are selling equity; they are buying it. You need to qualify your buyer.

If they start stuttering, or they say, "Oh, we have a few things in the pipeline but we haven't announced them," push harder. Ask for a month.

If their last investment was 12 months ago, run.

They are not deploying capital. They are wasting your time. And in fundraising, time is the only resource you cannot get back.

Don't let them string you along. If they aren't writing checks, they aren't investors. They are just spectators.

We also talked about the structure of the market itself.

There is a weird shift happening. The big funds are getting massive. They have "war chests" of cash. They need to write huge checks to move the needle.

On the other end, you have a lot of small, emerging managers and micro-funds.

But the middle? The middle is dying.

Ken explained that the funds in the £50m - £100m range are getting squeezed out. They can't compete with the giants on the big deals, and they are too slow for the small deals.

For founders, this means you need to be smart about who you target.

If you are raising a Pre-Seed or Seed round, look at the smaller players. Look for the funds that can move fast. They might not lead the round. They might say, "We will commit £100k if you find a lead."

That is fine. Stack those checks. Get a syndicate going.

Do not obsess over the brand-name funds that are too big to care about your £500k round. Go where the hunger is.

Finally, we talked about the pitch deck.

I see founders spending weeks on this. They obsess over the font. They obsess over the colors. They write paragraphs of text explaining their "philosophy."

Here is the hard truth from Ken: He doesn't read it.

Investors are clearing their inbox. They are looking for a reason to say "no" so they can move to the next email.

Ken looks for four things. That’s it.

If he can’t answer those four questions in two minutes of scanning, he deletes the email.

He mentioned seeing decks that are "tombs" of text. Paragraphs and paragraphs.

Nobody is reading your novel.

If you cannot explain your business in two sentences, you don't understand your business.

And please, for the love of God, use some design sense. We live in 2026. You have Canva. You have AI design tools. There is absolutely no excuse for a deck that looks like it was made in Microsoft PowerPoint 95.

If your deck looks lazy, investors assume you are lazy. If you don't care about the presentation, why would you care about the product?

I know this all sounds depressing.

But there is good news.

Ken believes 2026 is actually a great time to raise. The "freeze" of 2023 and 2024 is thawing. LPs are starting to release cash. Term sheets are flying around again.

But the bar is higher. The free money era is over. The "tourist founders" are leaving the building.

If you are real, if you are building something that actually solves a problem, and if you have the grit to get traction without waiting for permission—there is money out there for you.

Just don't expect it to be easy. And don't expect it to come without a fight.

If you want to hear more of these insights directly from the source, without my sarcasm (okay, with a little bit of my sarcasm), you should watch the full recording.

It is rare to hear an investor speak this honestly. Take advantage of it.

✅ If this was useful, pass it on. You know a founder who is still building generic AI wrappers. Send this to them. Show them where the real money is going.

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