Defy VC’s Medha Agarwal on Betting Against Hype and Backing Founders Early

Medha Agarwal, general partner at Defy, has sat on both sides of the venture capital table. Before becoming an investor, she built companies herself, raising money and learning firsthand how investors evaluate businesses.

That experience now shapes how she backs founders at the earliest stages, often before they have a finished product or proven business model. Her approach is built around conviction, personal relationships and a willingness to invest in ideas that others may overlook.

“I love connecting people who I think could benefit from a mutual conversation,” Agarwal said. That instinct, combined with her experience as a founder, ultimately pulled her into venture.

From Founder to Early-Stage Investor

Agarwal began her venture career about 12 years ago, starting as an intern before moving into full-time investing. She later relocated from the East Coast to the Bay Area because she believed the strongest founder relationships were built in person.

“It felt like I had to be out here in the epicenter of the tech universe,” she said, describing the value of running into entrepreneurs at coffee shops, events and social gatherings.

After working at several venture firms, she joined Defy three years before the interview to support founders at the earliest stages of company building. Defy announced her appointment as general partner in November 2023, highlighting her background as both an operator and investor. 

Why Defy Bets on the Founder First

The firm typically invests at the first check stage, often before a startup has achieved product-market fit. The firm often leads rounds and stays closely involved after investing.

“We link arms with the founders and are in the trenches together,” Agarwal said.

For her, investing means more than providing capital. Founders need someone they can call when a major customer is at risk, a key hire is not working out or a co-founder relationship becomes difficult.

“What I hear often is, ‘Thank you for listening and being there,’” she said, describing the importance of being a trusted partner to founders.

That support matters because company building rarely follows a straight line. “Even if you’re a home run success multiple times over, the journey is not linear to get there,” Agarwal said.

AI Is Changing How Early Startups Get Built

Agarwal believes AI is allowing founders to accomplish more with smaller teams and less capital, creating opportunities for investors to back companies even earlier.

“In this world of AI, you can accomplish so much more with fewer people and less capital” she said.

That shift means Defy is open to working with founders who are still testing an initial thesis rather than waiting for a fully formed product because founders can make so much more progress on capital raised.

But Agarwal is not convinced AI creates an opportunity for every startup. Strong foundational models can make previously impossible products viable, while also eliminating the differentiation that once made specialized software valuable.

“The need for another tool is where the relative difference between a specialized tool and foundational models has narrowed,” she said.

For startups, the challenge is proving that their products offer lasting value beyond what general-purpose AI can already do.

Why Defy Is Willing to Be Misunderstood

Defy tries to avoid following investment trends simply because everyone else is participating.

“We try not to get caught up in hype,” she said. Instead, the firm asks from first principles whether a founder can build something large and differentiated, even when the market does not yet recognize the opportunity.

That approach also shapes how Agarwal evaluates founders. She looks for founder-market fit, a unique insight and the ability to push and iterate quickly.

“Do we believe that this founder has amazing founder market fit in this category and they have a right to win?” she said.

The firm still studies the market, but believes the founding team is what ultimately matters as markets and technologies evolve.

From an Idea to a Live Product

One recent milestone she highlighted was Agentiq, a Defy portfolio company that allows fans to invest in professional athletes’ future earnings.

The company raised $4 million and launched publicly in October 2026, according to the firm. 

Agarwal said the investment began with the founders’ combined experience in fintech and sports, along with their belief that fans should have a way to participate financially in the athletes they support.

She called the launch especially rewarding because the team had to build its product, recruit athletes and navigate the regulatory requirements associated with offering an investment security.

For Agarwal, those milestones capture what early-stage investing is about: backing a team before the outcome is certain and supporting through the difficult steps required to bring an idea to market.

The Long Game

Agarwal hopes Defy will be known for investing in category-defining companies and standing by founders through both setbacks and success.

Her philosophy is straightforward: capital matters, but conviction, trust and the ability to adapt can matter just as much.

In an AI-driven market where products can be built faster than ever, the firm's edge comes from identifying the founders who understand a problem deeply enough to build something enduring.