Over the last decade, the venture market in Europe has moved from capital abundance to capital selectivity. Funding is still available, but investors now apply a more disciplined and structured approach to evaluating startups. This shift is especially visible for early- and growth-stage companies seeking institutional or family office investment. Metrics, governance, market focus and readiness for scale are scrutinised far more closely than during previous “easy money” cycles.
One example who has worked through this transition in practice is Alexander Kopylkov, an investor and strategist with more than twenty years of experience, including large-scale real estate projects and over a decade in venture and family office investments. He has supported 20+ European startups across artificial intelligence, advanced technologies and high-impact innovation, several of which have reached multi-million-euro valuations, IPOs and strategic exits.
Drawing on perspectives from investors like Alexander, this article outlines what professional capital now expects from startups and how founders can position themselves accordingly.
1. Reprioritisation of fundamentals
The first and most visible change is the return to financial and business fundamentals.
Whereas earlier funding cycles sometimes rewarded top-line growth at almost any cost, investors today place renewed emphasis on:
- Unit economics: Positive or clearly improving unit economics are no longer “nice to have” but a central element of the investment case.
- Revenue quality: Recurring, diversified revenue is valued more highly than one-off or highly concentrated income streams.
- Capital efficiency: Burn rate is expected to be proportionate to stage, market opportunity and traction, with a clear rationale behind major cost centres.
As Alexander Kopylkov notes, “Startups are increasingly focusing on the sustainability of their business, rather than just growth at any cost.” This is not a rejection of ambition; it is a recalibration of how risk and return are assessed.
For founders, the implication is clear: an attractive story must be supported by a credible economic model and realistic financial scenarios.
2. Clear and focused market strategy
The second key expectation concerns strategic focus. Professional investors increasingly look for companies that can demonstrate:
- A clearly defined target segment
- A specific, well-articulated value proposition
- A repeatable go-to-market model, rather than opportunistic sales
Broad, non-differentiated market definitions (“SMEs worldwide”, “all e-commerce companies”) are viewed with caution. Instead, investors prefer a sharp initial positioning with the potential to expand once a solid foothold is established.
In practical terms, founders are expected to answer in concrete terms: Who is the core customer? What problem is solved, and how is success measured on the customer side? Which channels and motions (direct sales, product-led growth, partnerships) are used to reach and convert this customer?
Investors such as Alexander Kopylkov often pay particular attention to whether the commercial strategy is systematic or dependent on a few individual relationships. Systematic strategies are easier to scale and less fragile, a point also highlighted in an exclusive report published in The Buffalo News.
3. Operational readiness and governance
A third area of focus is operational robustness and governance standards.
From an investor’s perspective, even strong products and markets can fail to realise their potential if operations are not prepared for growth. As a result, greater attention is now paid to:
- Process maturity: Critical activities (sales, implementation, customer success, product development) should be documented and managed through clear workflows, not informal arrangements.
- Team structure: Roles and responsibilities must be defined in a way that supports scaling, onboarding and delegation.
- Governance: Cap table structure, shareholder agreements, board processes and basic internal controls are examined earlier in the company’s life.
This aspect is particularly important for investors with experience in complex projects and public-market transactions. Having managed and exited large real-economy businesses before moving into venture, Alexander Kopylkov places significant weight on discipline in governance and reporting, seeing it as a prerequisite for smooth acquisitions and listings.
Startups that build these elements early have a clear advantage during due diligence and exit processes.
4. The evolving role of the investor
The expectations of investors have also changed. Capital alone is rarely sufficient as a differentiator. Founders increasingly look for partners who can provide strategic and operational support, and this guide for startup founders highlights why these deeper partnerships matter.
This typically includes:
- Structuring market entry and expansion strategies, including internationalisation.
- Advising on organisational design to support scaling.
- Preparing companies for later-stage financing, acquisitions or IPOs, including aligning metrics and reporting with future buyer expectations.
For founders, the implication is crucial:
- Investor selection should be based not only on valuation, but also on the relevance of the investor’s experience to the company’s next stages.
- Once an investor is on board, structured collaboration on strategy and governance can materially improve outcomes at exit.
5. Practical recommendations for founders
Against this backdrop, several practical recommendations emerge for teams preparing to raise capital:
- Strengthen the economic story
Ensure that unit economics, margin evolution and the path to break-even are clearly modelled and can be defended under different scenarios. - Refine positioning and go-to-market
Narrow the focus to a clearly defined initial segment with a repeatable sales motion. A precise, validated niche is more investable than an overly broad, theoretical market. - Invest in basic governance early
Clean documentation, clear shareholder structures, consistent reporting and functioning decision-making bodies save significant time and value at later stages. - Use investor expertise deliberately
Treat experienced investors not only as capital providers but as strategic partners. Regular, structured engagement on key topics (strategy, organisation, metrics, exit preparation) makes this expertise actionable.
Conclusion
Venture capital in Europe is not contracting; it is professionalising. The bar for funding is higher than during previous liquidity-driven cycles, but it is also clearer. Startups that combine strong products and markets with disciplined economics, focused strategy and robust governance are well-positioned to attract sophisticated capital.
Investors with dual backgrounds in traditional sectors and venture, such as Alexander Kopylkov, who has guided numerous European startups from early stages to significant valuations and exits, illustrate the direction in which the market is moving: towards structured, long-term partnerships between capital and companies, rather than transactional funding rounds.
For founders, aligning with these new standards is no longer optional. It is becoming a core condition for building companies that can scale, attract high-quality investors and ultimately realise their full potential.
