‘Venture building’ bridges start-up gap

As startup funding tightens amid volatile markets, venture building is emerging as a strategic investment approach. Unlike traditional methods that focus solely on capital infusion, venture building partners work closely with startups to strengthen operations, develop scalable strategies, and drive sustainable growth.

“Venture building focuses on creating value, not chasing valuations,” says Alex de Bruyn, CEO of Let’sCreate, a South African venture building company. “It starts with the founding principle of building a strong foundation before scaling. That includes instilling the right frameworks, setting cultural norms, and defining repeatable playbooks that guide decision-making, execution, and growth.” 

De Bruyn says by focusing on core competencies and transferable skills, a well-constructed team can tackle almost any problem. It’s when these fundamentals are in place, he says, that startups become better equipped to adapt, commercialise solutions effectively, and grow sustainably. It positions them to attract larger venture capital opportunities down the road. 

“What’s happening now isn’t just a market correction. It’s a fundamental shift, where capital alone won’t guarantee survival. Venture building emphasises building real, valuable businesses, not just startups that look good on a pitch deck. And this is what nervous investors will be looking for, especially in a risk-ladden market like we have now.” 

De Bruyn says the current economic uncertainty, when added to the current investment trends, makes venture building an increasingly attractive option for startups. 

Even before the latest tariff turmoil, 2025 was shaping up to be a tough year as the number of startup failures continued to ratchet up. Data from TechCrunch showed a 26% growth in US startup failures when compared to 2023, with the trend looking set to continue. The picture was no less grim in Africa, with startup funding in the third quarter of 2024 reaching $306.4-million – a 40% drop from the year before. 

This is bad news for startup organisations as economic volatility and market corrections continue to shrink the risk appetite of investors, and longer funding cycles and reduced availability of capital make riding out the current storm more challenging. 

“The days of funding future value without clear fundamentals are coming to an end,” says de Bruyn. “Venture capitalists are waking up to the reality that taking wild bets on unproven ideas is simply too risky and the era of throwing capital at anything remotely tech-related is giving way to a more disciplined approach.

“Many startups who raised these unimaginable sums are beginning to buckle under the weight of over-optimistic projections and unvalidated business models.” 

New challenges

While the market was already tightening, the new tariffs and potential trade wars are adding complexity for startups. 

Increases in raw materials, components and services will put additional strain on already tight margins as startups are forced to either absorb the new costs or pass them on to the consumer, and thereby reduce competitiveness.

Global supply chain challenges are likely to raise their heads again and cash flow disruptions in an uncertain market will make it harder for businesses to sustain operations or expand as planned. What’s more, market access may also become an issue for those aiming to expand their geographic footprint. 

De Bruyn says that regardless of how it unfolds, the economic volatility will inevitably impact startups, and businesses can expect a diminishing risk appetite from investors. Those still willing to invest will be looking for sustainable unit economics and clear paths to profitability.

A new investment mindset

“We are seeing a clear shift away from speculative, valuation-driven funding toward more value-based, milestone-driven capital allocation,” says de Bruyn. “We are prioritising ventures that have validated real demand, even at an early stage. We’ve also observed a sharp increase in demand for non-dilutive, use-case-backed funding models, especially in B2B Software as a Service.” 

The shift is not one-sided, de Bruyn says founders are also realising that showing meaningful value will not only inject sustainability into their long-term plans, but make them more attractive to serious investors. 

“Many founders are no longer chasing inflated rounds. Instead, they’re asking: ‘How can I get to break-even faster? How do I fund the next stage of growth based on paying customers, not promises?’ That’s a mindset shift we welcome and support.” 

De Bruys says that rather than wildly inflated valuations (often based more on founders’ egos than reality), venture building partners will be looking for customer-backed growth, where businesses can demonstrate real-world traction, and where users are already paying or showing strong intent to pay for a solution. The venture builder can then step in and help shape the commercial strategy around that including help with packaging, pricing, routes to market, and recurring revenue.

“This is not your grandfather’s way of investing anymore. We’ve seen a growing appetite for revenue-share and embedded financing models, particularly with startups serving SMEs and niche verticals. This aligns with our belief that the fastest path to scalable, fundable growth is to build businesses on top of clear unit economics, repeatable distribution, and demonstrated retention.”