A rebound, not a surge, shines sunlight in a gray sky.

Despite economics and bankers’ predictions, the recession did not happen. The US economy has been more resilient than expected and US households’ consumption beat expectations.

Although this sounds far away from our day-to-day lives, operating small or medium-sized companies, this is still the beginning of the snowball effect.

This drives the appetite of LPs and large investors whether to deploy more capital or not.

What’s easy to predict for our coming semester is the increase of false claims of companies pretending to build AI products in order to survive and get funded. Most investors won’t be fooled though. We know — they know — who the true players are.

Yet, we are still globally on the verge of a true AI shift in our daily lives that will be comparable to the surge of telecommunications. That’s now a given.

For the 99% of other companies, building software, marketplaces, or anything else, getting funded will remain hard. The necessity of showing a strong path to profitability at very early stages, sometimes before Series A, is a new reality. One could have thought that this would have been a prerequisite for small VCs or European VCs, but no. Unfortunately, large VCs, US VCs, and top-tier VCs do bet more on profitable companies and are ready to give high valuations to those who outstandingly combine aggressive growth and positive EBITDA. The rule of 100 has replaced the rule of 40.

So, what will happen to companies who are struggling to get both? Or even one of the two? Well, there is a high likelihood that they will stay in the 1M to 10M revenue segment for a while, transforming themselves into non-digital companies with slow growth — not dying, not skyrocketing. The other path would be for them to bet on a high return on investment, build new products with high leverage, invest in their teams to do more with less, or merge with competitors. External growth is often considered by entrepreneurs for large companies, and it should not be.

Yet, we’re seeing from the entrepreneurs surveyed in this edition that positive mindset and willingness to grow are vital. Hiring will accelerate again, budgets will increase, and ultimately this will drive more revenue and more growth. For those who invest on those fronts, H2-24 is about investment and smart bets — and payback in 2025.