Sep 10, 2025

This trend has been especially sharp in recent times as cautious investors have looked to safer bets—and it comes with potential consequences on the ecosystem. “We're in this moment of anointing and everyone's looking for people who look like kings, they're not looking for the eighth son of Jesse,” said Rob Go, co-founder and partner at NextView Ventures . “They're looking for the big, strong person who looks like a king. That person right now looks like a repeat founder.” Across all investment stages, repeat entrepreneurs—regardless of whether their prior startups have had a successful exit—are far outpacing first-timers in every metric, from valuation to deal size, according to a PitchBook analysis. “First-time founders, it can be a microcosm for certain profiles of founders,” Go said. “Is the best talent, irrespective of background, actually getting the shot versus the same kind of person getting the shot no matter what?” Right off the bat, first-time founders find themselves behind serial founders jockeying for VC funding. And as startups grow and prove themselves, this gap continues to grow across all stages but remains pronounced at the early-stage. Unsurprisingly, this gap extends to valuations. Companies founded by serial entrepreneurs are valued anywhere from 2x to 3x more than those founded by first-timers. While initially narrow early, companies founded by serial entrepreneurs see bigger valuation growth as they progress, leaving their first-time colleagues in the dust. Taking flight Partly to blame for the widening gap are uncertainty about US trade policy and a lack of liquidity . Those factors have made VCs more risk-averse and less willing to back founders without a track record, according to investors. “What we're seeing is the famed flight to safety,” said Chris Neumann , a startup-founder-turned-VC-investor. “It's much easier to diligence someone when they have a lengthier track record. Despite US IPOs making somewhat of a comeback , a full recovery of the VC liquidity crisis remains far off. And with venture fundraising set to hit a decade low, according to PitchBook's latest Venture Monitor , it's little surprise that investors are sticking with founders with a proven track record. But investing in first-time founders also comes with benefits, Neumann said. Prior experiences aren't shaping how they approach building their companies, and they're more willing to try new things and make mistakes. And the so-called “flight to quality” may not actually yield better results, he cautions. “You're reducing to the mean in terms of performance of your fund. You're losing your edge.” The storm AI is an easy scapegoat for the widening gap between first-timers and veterans, but there is some truth to it as the cost to build AI startups is going up. “Check sizes have increased dramatically, and the fund sizes have not increased commensurately,” said Tomasz Tunguz, GP at Theory Ventures . “For some, I think it's hard to entrust a first-time founder with $22.5 million—or more—very, very early on.” And because AI companies are growing rapidly, underwriting revenue durability has become harder, he added. Underwriting a management team becomes an incredibly important component. Investors also want to know that their capital is being used well, said Hunter Walk, co-founder and partner of Homebrew . So a natural concentration and focus of capital is inevitable, he added. “[Mega-funds are] not just looking for ownership percentage in these startups, but also need places that can make productive use out of millions and millions of dollars, which of course narrows the types of founders that actually appear to matter,” he said. “In hindsight, we'll see if they're correct.”