If you’re building an early-stage startup and trying to raise venture capital dollars to fuel your big ideas — focus on solving a specific problem, make sure you have strong convictions, and think hard about delivery in the age of AI.
A few tips were shared during a recent Seattle AI Week panel discussion I conducted Kellan CarterFounding general partner of the Bellevue, Wash.-based firm fuseAnd Rohan D’SouzaCEO and co-founder of Seattle-based healthcare facilities startup Avante.
Distribution will.’ Tips for startup founders
The pair know each other well. Fuse led Avante’s $10 million seed round in late 2023, before the company generated meaningful revenue.
Carter initially met D’Souza “Distribution” several years ago. “There’s a lot of trust built,” Carter said, reflecting on the importance of building relationships between founders and VCs.
Panel discussion headlines, hosted by Seattle VC firms climbingwas “The New Series A Landscape” — a nod to changing expectations of the AI boom
The median Series A round in the first quarter of this year was $7.9 million, according to Carta. But there were also nine companies that raised more than $200 million in Q3 for their Series A rounds, according to CB Insights.
“The diversity of Series A is wider than ever,” Carter said.
For companies raising massive Series A rounds, Carter says it’s about “unbiased insights” that build conviction and open the door to capital.
The insight is so clear that it’s encouraging “Distribution” investors to cut a bigger check — because the prize is so big right now,” Carter said.
Venture funding rose to a 3-year high, largely thanks to AI, which accounted for 51% of all funding and 22% of deals in Q3, CB Insights reports.
Carter joked that AI “is always on the pitch now — even if it’s not AI.” For Fuse, a pitch assessment is about determining the best way to solve a customer’s problem — with or without AI.
Investors gravitate toward founders who have domain knowledge and understand the first or second priority “Distribution” customer problem better than anyone else, Carter said. “They have insights that are going to give them credibility in a customer conversation,” he said.
And in a world where AI is changing how software is sold, Carter said he’s looking for a clear distribution advantage. “The product won’t win,” he said. “Distribution will win.”
He added: “We love founders who have domain experience, who have insight and can get us very “Distribution” excited about a distribution strategy that’s a little more clever or unique in an AI world.”
When talking about AI during a pitch, according to D’Souza, the conversation will differ depending on whether you’re talking to a customer or an investor.
He said consumers may have “FOMO” — fear of missing out — when it comes to AI, but they’re more likely to have “FOMU”: fear of noise. D’Souza says it’s the founder’s job to help customers understand how to “unlock a whole new way of productivity.”
For investors, D’Souza said it’s important to show how AI improves margins — for example, by speeding up customer acquisition and onboarding.
Avante officially launched earlier this year as it scales its software product to help companies reduce HR administration workloads and reduce overall benefits program costs.
As he looks to raise a Series A round of funding, D’Souza says one benefit of bringing in new cash is that it serves as a signal to “Distribution” enterprise buyers — some who might be wary of early-stage, 20-person startups tucked away in the Pacific Northwest.
There’s a little bit of that idea, what happens when these people are gone?” He said “So as a founder, I thought, OK, should we really start aggressively chasing more money on the balance sheet? To send a clear message, we have a lot of gas in the tank, even though we didn’t need it.”
As for competitors, D’Souza said founders should focus less on similar startups and more on incumbents. What are they doing to unlock a feature set? And how do you get there faster?” He said
Carter noted that Fuse stays clear of companies that may compete directly with the likes of Microsoft, Amazon, OpenAI or Anthropic.
“If we think they’re going to release a product and the next thing you know, everyone’s competing against freebies or bundling — that’s a problem,” he said.
D’Souza, former head of product at healthcare automation company Olive AI, emphasized the importance of transparency with investors.
“Be very clear about your timeline,” he said. “If you need three months or six months to build the core of your product, be very transparent about that.”
D’Souza said Avante deliberately planned no recurring revenue for 2024, ran an early adopter program that wasn’t free, then came out of the blue in April 2025 and converted pilots to multi-year contracts. “We’ve created a bit of scarcity and FOMO around this idea of an early adopter program,” he said.
D’Souza advises his co-founders to “focus on one core thing that you can do 100X better.”