Section 174: The Fog Has Lifted
Your Wednesday VC Breakfast Rundown
Section 174 didn’t arrive with a bang. It crept in through the tax code, quiet, technical, and easy to miss. But once it landed, the impact was anything but subtle. Startups were forced to capitalize R&D costs that had long been expensed. And with that single shift, balance sheets cracked. Tax bills swelled. Runways shrank.
For founders, it wasn’t just a finance issue, it was an existential one. Suddenly, building required navigating new complexity without clear answers. Seed-stage startups with barely a budget were being asked to forecast like public companies. Conversations with investors turned tense. Budgets turned rigid. And the pressure mounted, not from market forces, but from policy.
Now, with new changes rolling in, the tension begins to ease. But this isn’t just a return to normal, it’s a new chapter. Understanding the implications matters deeply. Because this shift affects everyone: the solo founder trying to stay lean, the CFO managing 30 months of growth, the VC partner advising a portfolio on burn and risk.
This is where tax policy meets operating reality. This is what clarity looks like after the fog.
Here’s what changed, and why it matters.
Asepha just leveled pharmacy automation with a $4M seed round (Glasswing Ventures, Core Innovation Capital, Panache Ventures). Dr. Eunice Wu, PharmD and Can Uncu are fusing clinical pain points with AMD-grade AI muscle, 96% OCR, 3-second script latency, 71% pharmacist preference. No bots, just bespoke pharmacy agents built to run. They’re scaling fast across North America, with enterprise deployments already live and a multi-lingual Clinical Copilot on deck.
NetBox Labs snapped up $35M Series B (NGP Capital, Sorenson Capital, Headline). Kris Beevers and Jeremy Stretch are scaling their network source of truth, already powering infra at Chewy, CoreWeave, and Constant Contact. Their AI-driven infrastructure ops stack isn’t just aware, it’s anticipatory. They're building deep ITSM and AI data center capabilities to dominate the $17.4B infra automation market.
Moonvalley landed $84M more (General Catalyst, Creative Artists Agency, CoreWeave). Naeem Talukdar and a DeepMind-heavy founding crew are making licensed, cinematic AI video real, with 1080p generation, camera control, and ethics-first data training. Hollywood’s not suing, they’re signing up. Marey, their flagship model, is already driving studio-grade pipelines, think 3D in painting, pose control, and full shot design.
Zip Security raised $13.5M Series A (Ballistic Ventures, Silver Buckshot Ventures, Mantis Venture Capital). Joshua Zweig and Gabbi Merz are building zero-fluff, full-stack IT security + compliance automation for SMBs. Plug into CrowdStrike, Okta, InTune, and breathe easy. Zip doesn’t ask for time, it gives it back. Their platform turned a real-time security outage into a self-healing event, no tickets, no fire drills, just autonomous recovery on command.
BondCliQ locked in strategic capital (FactSet Research Systems Ltd). Chris White is lighting up the $8T corporate bond market with real-time pre-trade and post-trade data, backed by 40+ dealers and 70,000 quotes/day. No mystery, just precision. This is Wall Street’s missing layer. With deep FactSet integration and a MiFI DII push in motion, BondCliQ’s data stack is becoming fixed-income’s clearing lens.
GLD Shop secured a growth round (MarcyPen Capital Partners, Brand Velocity Group, H.I.G. Growth Partners). Christian Johnston and Dan Folger turned basement-made chains into a global licensed e-commerce juggernaut. Now led by David Reinke, they’re scaling into wholesale, women's jewelry, and owning their throne in fashion’s $230B sandbox. With National Basketball Association (NBA), National Football League (NFL), Major League Baseball (MLB), and DC Comics licensing locked, GLD isn’t following culture, they’re producing it in 24k.
Cobionix Corporation picked up $3M strategic (TitletownTech, Lion Investments, Dr. Paul McBeth). Matthew Sefati leads a robotics team deploying autonomous injections, diagnostic ultrasounds, and 5G haptic-enabled platforms, already live across U.S., Canada, UK. This isn’t concept. This is contact. CODI® is heading toward commercialization with FDA and Health Canada pathways underway and multi-site pilots scaling.
Cogent Security came out swinging with $11M seed (Greylock Partners, Lockstep Ventures). Vineet Edupuganti built an AI taskforce that hits CVEs at the root and learns org context on install. Not patchwork, precision ops at machine speed. Their agentic AI layer is already eliminating threat backlog inside Fortune 500 stacks with sub-second action cycles.
EndoQuest Robotics raised $39.66M Series D-2 (Crescent Enterprises, Dr. Frederic Moll, Puma Venture Capital). Eduardo F. is steering trials across Mayo Clinic, Brigham and Women's Hospital, IRCAD . Scarless surgery, FDA-aligned, and ready to rewrite GI surgery. With FDA STeP enrollment, clinical momentum, and Dr. Eric Haas on deck, EndoQuest’s surgical robotics platform is flexing medical futures.
CloudCover secured fresh funding (Argentum Capital Partners) to power its TPM and ITlifecycle management platform. Jeff Huggins built the software-first backbone now managing 250,000+ assets across 60 countries. CoverIT™ unifies contract chaos, vendor ops, and pricing workflows, already the quiet standard for global MSPs.
Helios raised $4M seed (Unusual Ventures, Lars Albright, Founders, Inc.). Joe S., Joseph A. Farsakh, and Brandon Smith are turning redtape into a data-rich GovTech OS for policy professionals. Proxi deciphers legislation, maps stakeholders, and generates memos like a Hill staffer, only faster, smarter, and never off.
The Difference Card scored a strategic growth investment (Stone Point Capital). Joseph Donovan and team are slashing employer healthcare costs by 19.6% year one, real math, real time. With $1.8B in savings delivered and 90% retention, they’re reshaping health spend into a controllable, data-backed asset.
GT Medical Technologies, Inc. added $16M to its Series D (FemHealth Ventures, Warren Point Capital). Per Langoe and Dr. David Brachman, MD are pushing GammaTile Therapy into more ORs with FDA-cleared, targeted radiation therapy for brain tumors. 1,900+ patients treated, 800+ in trials, and a sales + clinical pipeline that’s pure velocity.
Collate raised $10M Series A (Venrock, Unusual Ventures, Karman Ventures). Suresh Srinivas and Sriharsha Chintalapani built OpenMetadata into the open-source standard for data governance. With 4,500+ GitHub stars, 10K+ community Slack users, and 350% YoY growth, they're not managing metadata, they're redefining it.
Decile Group raised $14M seed (Draper Associates, Javelin Venture Partners, Geek Ventures). Adeo Ressi and Mike S. just launched Start Fund, a platform that creates institutional-grade VC funds in under 24 hours, zero fees upfront. Formation, back-office, compliance, admin, all baked into a software layer. The disruption isn't coming. It's here.
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