For early-stage companies, venture capital funding is often romanticised as a gold standard. A sign that your company means something and is on the right path. But we raised £20 million without a single venture capitalist. That meant no Sand Hill Road or time-consuming pitch decks at partner meetings, which have no guarantee of any success. Above all, it meant we didn’t have to give up a single board seat to people who have never built anything.
Instead, more than 70 UK investors backed us because they believed in what we’re building – not because a VC brand told them to. And there are two hard truths here.
The first is that most VCs have never built or successfully exited a company, shipped a product or sat on a support call at 11 pm, wondering why the integration is broken. They have mainly come up through banking, consulting and analyst programmes, meaning they provide opinions instead of real-world experience.
The second is, in 2026, in the age of AI, their model is dying. Here, I outline five reasons why, before explaining how we used our own AI agent to raise the money.
Five reasons the model is dying
1. Having money to build a product is far less important. There’s no need to raise millions of pounds to build software anymore. With AI, the cost of software development is now a fraction of what it used to be.
2. The real product of VCs is their rolodex – they can deliver introductions to various customers, talent and other investors. But the internet and LinkedIn killed that advantage years ago, and AI agents are delivering the final blow. With these tools, founders can build their own network. VCs just haven’t admitted or acknowledged this yet.
3. The talent pool giving you advice on how to scale is very mixed. The VCs who exited successfully as founders outperform career VCs with their portfolio success rate by 7%. The ones who failed as founders are a further 4% behind career VCs. But the successful founders still only have a success rate of 30%. Do you need their “strategic guidance”?
4. Just under half of senior VCs make at least one successful deal, according to Stanford University research. They need billion-dollar exits to return their fund, so it doesn’t matter if a founder’s company is profitable, sustainable or changing an industry. They’re looking for lottery tickets and know the majority of their portfolio companies will fail. Rather than a strategy, they gamble with someone else’s chips. This shows the incentives are broken.
5. The moment you take VC money, your choices shrink to four: sell, IPO, raise again, or die. That’s it. The optionality you used to have around the development and direction of the company is significantly reduced. A blank canvas is traded for a straitjacket.
Using an AI agent to raise funding
AI agents are already having a big impact in sectors like customer service. They’re able to perform a set of automated actions for humans to achieve an objective with minimal input. However, most people might not have considered using AI agents for investment. But they can be a game-changer.
We recently raised nearly £20 million. To do this, we created our own bespoke AI agent to raise the money and put it to work. It called high-net-worth investors on our behalf, qualified them and then booked the meetings for us. And not only did we build the product, but we used it to fund itself. If that doesn’t tell you VCs are optional, nothing will.
The result of this process was more than 70 investors, and not a single board seat was surrendered. Consequently, we don’t have to work with investors telling us to “move fast and break things” while they sit in Mayfair waiting for their 2 and 20. We’ve kept control, and we’ve kept our ability to build something that actually works for customers, not a fund’s IRR model.
The new agentic investor model
Many AI founders right now will probably still believe that they need VC funding. The truth is, they probably don’t. The tools are available to build world-class products with lean teams, reducing the need for huge sums of investment, and if your product is good enough, customers will buy it. Most importantly, the capital exists outside of VC if you’re willing to do the work.
It’s about time founders stopped romanticising venture capital. With the right AI tools and strategy, they can start building without giving up control.
By Luke Sartain, CEO and Founder of Narwhal Labs
