The venture capital landscape has shifted dramatically from the days when growth at any cost—often referred to as “blitzscaling“—was the ultimate goal. With abundant capital available, start-ups were primarily focused on raising funds, the belief being that rapid scale would justify the means.

Needless to say, this approach came with significant risks as the fundamentals of sustainable business models and profitability were neglected. Investors are now prioritising companies that can demonstrate a sustainable path to profitability and financial discipline with the funding tap for companies that lack those attributes being turned off, leading to numerous casualties in the start-up ecosystem.

Furthermore, this recent emphasis on profitability has led to a more latent problem –  entrepreneurs with transformational ideas that have the potential to solve global problems are struggling to secure funding. Their business ventures are simply deemed too capital intensive with the runway to profitability being too long.

The challenge for the venture capital community is to find a balance. While it is crucial to support sustainable businesses, investors must also continue to back innovative, high-risk ventures that address significant global challenges. By making calculated investments, venture capital can still drive innovation while ensuring long-term success for both start-ups and society.

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