Startup investing fundamentals hold firm amid AI boom

By Arjay L. Balinbin, Associate Editor

MADRID — Artificial intelligence (AI) may be dominating conversations across the technology sector, but Silicon Valley investor and entrepreneur Kim Perell said startup investors continue to focus on the same fundamentals that have long guided investment decisions.

At a media roundtable on Wednesday at South Summit Madrid 2026, co-organized by IE University, Ms. Perell said investors still look closely at market opportunity, management teams, differentiation, and scalability when evaluating startups.

“I look at how big the market is. I also look at the team,” she said. “Then I think about what you’re building and whether it has unique differentiation and scale.”

Ms. Perell, who has founded nine companies and invested in more than 100 startups through investment and brand-building company 100.co, said entrepreneurs should not lose sight of business fundamentals.

Asked what advice she would give founders in emerging startup ecosystems such as the Philippines, she said entrepreneurs should be willing to adapt as markets evolve.

“I think the advice for every founder is to start,” she said. “And be okay to pivot.”

She cited examples of successful technology companies that achieved growth only after changing direction from their original concepts. YouTube, for instance, began as a video-dating platform before becoming the world’s largest video-sharing website. Social media platform X, formerly Twitter, emerged from Odeo, a podcasting startup that pivoted after Apple entered the podcasting market.

“As a founder, you believe it should be X, but if the market dictates you should do something differently, you should be flexible and agile to move with the market,” she said.

Ms. Perell also stressed the importance of mentorship, describing the lack of guidance as one of the biggest mistakes she made during her early years as an entrepreneur.

“I made the mistake of thinking I could do it alone, and I couldn’t,” she said.

She encouraged founders to seek advice from experienced entrepreneurs and investors, saying mentors can help startups avoid common pitfalls and accelerate growth.

“It doesn’t matter what country you’re in. Finding great mentors is key to your success,” she said.

Her remarks come as entrepreneurs from emerging markets seek greater visibility in the global startup ecosystem.

South Summit founder and President María Benjumea said Asia remains one of the world’s strongest innovation regions and continues to produce increasingly sophisticated technologies and startups.

“Asia is incredibly strong. The technology coming out of the region is impressive, and many Asian countries have vibrant innovation ecosystems,” she said in an interview.

She said startups from the region should continue expanding beyond their domestic markets and strengthen links with international investors, corporations and entrepreneurial networks.

“What is important is helping startups expand internationally, gain visibility, connect with investors, and become part of the global ecosystem,” she added.

Four startups from Asia were selected among the Top 100 finalists in this year’s South Summit Startup Competition: South Korea’s HISTRANGER and Singapore-based Omnishelf, Ailytics and Peris.ai. The broader Middle East was represented by Turkey’s OneNewOne and Israel’s Tissue Dynamics.

For governments seeking to strengthen startup ecosystems, Spain’s Minister for Digital Transformation and Public Service Óscar López said policy support remains essential.

Asked what advice he would give countries looking to replicate Spain’s rise as one of Europe’s leading startup hubs, Mr. López pointed to three key areas: startup-friendly taxation, supportive regulation, and public investment.

“First of all, taxation,” he said. “Second, we created a good regulatory framework.”

Mr. López said Spain’s startup law helped create a more favorable environment for entrepreneurs and investors, while government support has helped accelerate the growth of new businesses.

“Then, public investment,” he said. “We have made huge efforts investing in new startups and helping new startups.”

However, he said governments should not rely solely on tax incentives to stimulate entrepreneurship.

“All the discussion is what you do it for,” Mr. López said. “If you reduce taxes to generate more investment, then, at the end of the day, that’s going to generate more growth.”

Looking ahead, he said Spain’s digital transformation strategy extends beyond startup policies and includes investments in education and digital infrastructure.

“It is not only a question” of attracting startups, he said, adding that Spain’s future competitiveness depends on innovation and education.

“We’ve invested hundreds of millions of euros in infrastructure,” Mr. López said. “There are many things there. Not only taxation.”