Is Your 2-Year-Old Startup Plan Still Valid?

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Dear subscriber, imagine meeting a startup founder you invested in 6 years ago. This founder spent 5 years writing code to solve the hard technical problem of autonomous driving. The business model was unique, and the technical moat¹ was solid. But then, preparing for a funding round, they opened up the investor deck — and found the world had completely changed.

I’ve recently been talking with several people who run GP funds and do angel investing, and I keep hearing that they’re completely redoing their investment reviews, or that startup investment trends have fundamentally shifted. I’ve even heard that some funds have already gotten LP approval to pull out of their weakest portfolio companies at the next round — taking the loss — and redeploy that capital into AI companies. This isn’t just something I’ve heard secondhand — it’s also a real story that Lean Startup²’s founder Steve Blank recently shared on his blog. His conclusion is blunt: “Most startups over 2 years old already have an invalidated business plan.” Today, let’s talk about why this is happening — and what we should take away from it.

🌊 VC Money Is Flooding Into AI

Let’s start with the numbers. According to a report the OECD published this past February, 61% of global venture capital investment in 2025 — $258.7 billion (about ₩370 trillion) — went to AI companies. That’s more than double the 30% share in 2022, in just 3 years. What’s even more striking is the concentration within that figure. Mega-deals (investments of $100 million or more) accounted for 73% of total AI investment, and deals of $1 billion or more alone made up nearly half. Massive rounds like OpenAI’s $40 billion round and Anthropic’s $13 billion round are what’s pulling up the overall numbers.

Korea is no different. According to The VC’s data, the share of domestic AI investment expanded from 9.4% in 2022 to 23.6% in 2025 — and surpassed 45% in Q1 2026. Data from Hyeoksin-ui-sup (“Innovation Forest”), a Korean startup-data platform, points the same direction. According to Innovation Forest, AI’s share of domestic startup investment rose from 27.9% in 2024 to 31.7% as of August 2025, and by deal count, AI/deep-tech/blockchain has taken the No. 1 or No. 2 spot almost every month. Total investment in 2024 was 1,416 deals worth about ₩6.7564 trillion, and even as the total number of deals falls, the tilt toward AI keeps intensifying. Fewer deals but more money means capital is concentrating on a handful of AI companies while everyone else struggles more.

These numbers tell a clear story. Startups with nothing to do with AI now have to compete over an ever-shrinking slice of the pie. This is exactly the situation facing “Chris,” the autonomous-drone startup founder Blank writes about. While Chris kept his head down building technology for 5 years, the war in Ukraine caused the autonomous drone market to explode. According to PitchBook data, VC investment in defense-tech startups reached $49.1 billion in 2025, nearly double the $27.2 billion of the year before. 10 new unicorns emerged in this space in 2025 alone, and Anduril raised an additional $2.5 billion at a $30.5 billion valuation.

Chris’s product was a perfect fit for medical evacuation or supply transport in conflict zones — but he didn’t even know this opportunity existed. As Blank puts it, the aerial-platform integration technology Chris built is still competitive. But the business model surrounding that technology needs to be rewritten from scratch.

The era when “keeping your head down and staying focused” was a startup virtue is ending. Now, keeping your head up and scanning your surroundings is a condition for survival.