Quick Facts
- 82% of startups that survived one year had a strong go-to-market foundation in their pitch deck, per LvlUp Ventures data.
- More than 78% of founders applying to LvlUp are using AI in at least one aspect of their startup.
- Debt financing carried 63.9% of all disclosed funding dollars in Q2 2026, signaling a major shift away from equity-only capital strategies.
A New York venture firm has reviewed more than 25,000 startup applications and found that the rules for winning at the seed stage have fundamentally changed. Aaron Golbin, co-founder and general partner at LvlUp Ventures, published findings this week that point to four clear patterns separating fundable companies from the rest.
LvlUp received more than 15,000 applications in 2025 alone and reviewed more than 2,500 in a single recent month. The firm is on pace to track over 2 million data points on U.S.-based startups by the end of 2026.
GTM Is Now a Survival Signal
Of all the variables LvlUp tracked, go-to-market strategy proved to be the strongest predictor of a startup staying alive. Close to 82% of applicants still in business one year later had a strong GTM foundation in their deck.
Golbin argues that a better product no longer drives breakout growth on its own. The companies gaining ground are building distribution systems first, testing distinctive marketing channels early, and treating focused execution as a durable competitive advantage.
Non-Dilutive Capital Goes Mainstream
Equity financing remains common, but Golbin says it is no longer the only strategic option at the seed stage. LvlUp recently provided $1 million in growth capital to a portfolio company that needed immediate funding to expand its team and infrastructure. Raising the same amount through equity, Golbin wrote, would have taken months and carried significant execution cost.
The firm is now writing non-dilutive financing checks on a near-weekly basis. That activity reflects a broader market shift. Debt financing accounted for 63.9% of all disclosed funding dollars in Q2 2026, according to data cited in the article.
The broader seed market is also getting more selective. The median U.S. seed round now stands at around $3 million, three times larger than in 2018. More than half of all seed dollars last year went into deals of $10 million or above, while deal counts have fallen since the 2021-2022 peak.
AI as Infrastructure, Not Experimentation
More than 78% of founders applying to LvlUp are using AI in some part of their business. But Golbin says most are doing it wrong. Companies fail when they bolt AI tools onto fragmented workflows rather than designing intelligent systems from the ground up.
The most successful approach, per LvlUp’s data, starts with rapid prototypes to identify real market signals before committing to a full build. Founders who treat AI as core infrastructure rather than a feature addition show stronger operational clarity and more defensible products.
What This Means for Founders
The bar to raise a seed round has moved. A product, a team, and a pitch deck were enough a decade ago. Today, investors expect evidence of distribution thinking, a credible financing strategy that goes beyond equity, and AI that is built into the product architecture from day one.
LvlUp’s portfolio reflects that shift. Golbin grew the firm’s portfolio to 30 companies worth a combined $500 million in under a year. The fund posted an internal rate of return of approximately 116% over the past year, with a multiple on invested capital of 2.16. The firm is ranked No. 7 globally and No. 4 in the U.S. by PitchBook for 2025.
For software founders preparing to raise, the data is direct: distribution strategy and capital structure are no longer secondary concerns. They are the pitch.
Read more: What 25,000 Startup Applications Reveal About The New Rules Of Seed-Stage Startups