Deep technology takes patience, and software-as-a-service is adapting to artificial intelligence, not dying. Those are the central takeaways from a recent conversation with a managing director at Dell Technologies Capital, a firm that has deployed $1.8 billion across the enterprise stack since 2012 and closed six major exits in late 2025 alone.
Betting on Founders and Timing
Deep-tech startups often face timelines stretching seven to fifteen years before the market catches up to what they are building. Evaluating these companies requires betting on the founders first. Technical brilliance matters, but emotional intelligence matters just as much. Founders need the agility to recognize when they are wrong and the willingness to accept input from outside perspectives.
Keeping a deep-tech startup alive through long development cycles demands financial discipline. Overspending kills more startups than slow markets. It also requires strong co-investor partnerships willing to fund the journey over many years.
First-mover advantage cuts both ways. Category creation requires enormous effort to educate a market that does not yet understand the product. Later entrants often benefit from the groundwork the first mover laid. Category disruption, however, rewards the first mover. Disrupting an existing multibillion-dollar category with better technology gives early entrants a genuine edge.
SaaS Will Transform, Not Vanish
AI will change how software is built, consumed, and priced. The per-seat model is fading. Consumption and outcome-based pricing will replace it. But SaaS incumbents hold two fundamental advantages: brand recognition and existing customer relationships. Companies like Salesforce and ServiceNow are not anonymous startups fighting for attention. They have long-standing contracts and distribution networks.
Smart incumbents will embrace AI, shift their pricing, and transform their products. Those that cannot build the technology fast enough will acquire AI startups to get it. This creates a clear mutually beneficial path: AI startups gain the distribution they struggle to build alone, and incumbents gain the technology they need to survive the transition.
Distribution Over Technology
The deciding factor for AI startups is distribution. Many founders have disruptive technology. Few have the go-to-market machinery to reach customers at scale. Startups that figure out distribution first will win their categories, even if their technology is slightly inferior to competitors with better models but weaker market reach.
Proving Revenue Durability
Investors are also shifting how they evaluate revenue. Traditional recurring contracts are giving way to what Dell Technologies Capital calls "re-occuring" revenue: uncontracted project-based work where customers return for second and third engagements without signing long-term deals. Startups raising Series A or B rounds need to demonstrate this repeat engagement pattern. Showing that a customer completed one project in October, returned in January, and came back again in March proves stickiness far better than a single large pilot.
The venture landscape is evolving rapidly. Deep-tech founders need patience and discipline. SaaS companies need to adapt their models. AI startups need distribution above all else. The winners will be defined by how effectively they reach the market and prove that their customers keep coming back.