Startup Series C Funding Access Tightens in 2025, Investors Demand Certainty

Startup founders in 2025 face a paradoxical capital market where funding is plentiful but access has become more challenging, especially for those seeking Series C rounds. Cathy Gao of Sapphire Ventures highlights that only 20% of startups that secure Series A funding advance to Series C, as investors now prioritize certainty and leadership potential over mere growth momentum. Founders must demonstrate category leadership, clear go-to-market strategies, and undeniable demand to attract late-stage investments. Metrics such as growth and retention remain important, but investors increasingly require a convincing narrative on why a company will succeed in the future. Some startups with less stellar metrics have still secured substantial funding by effectively proving their long-term market leadership potential. Meanwhile, Strategic Equity Capital's manager Ken Wotton employs an active engagement strategy in smaller UK companies, such as Inspired, to create shareholder value through significant stakes and strategic involvement.