Capital is concentrating at the extremes and abandoning the middle. On one end: AI companies capturing premium valuations. On the other: deep tech companies with defensible physical moats. In the middle: generic software facing extinction.
AI is absorbing the entire startup economy, transforming what it means to build across all sectors.
The Dilution Gap
Physical product founders face nearly 10 percentage points more dilution by Series B than digitalproduct founders. The capital efficiency of software compounds into ownership advantage.
What Survives at the Extremes
AI Premium: Companies demonstrating AI-native time-to-value compression and winner-take-most potential
Physical Moats: Companies with defensible IP and physical-world advantages that can’t be replicated by software
The middle ground is vanishing. Generic SaaS, incremental improvements, feature-not-product companies—these face extinction.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
