UNSPOKEN: What Does the EVP × StrongRoom AI News Mean for Founders?
- Warwick Donaldson
- Mar 31
- 4 min read
Updated: Apr 10
This article kicks off a new experimental series “Unspoken” — where I unpack the capital raising stories and insights underneath the headlines, giving Australian early-stage founders the context they won’t get anywhere else.
When a $17m Raise Turns into a $70m Mess
On Thursday, 13th March, StrongRoom AI had all the signals of a startup on the rise.
They’d just announced a $17 million raise led by EVP, one of Australia’s sharpest VC firms. A valuation of $70 million. New board members. Media coverage painting them as the next category leader in pharmacy tech.
But in just two weeks, that momentum was gone.
On Friday, 28th March, StrongRoom AI was placed into voluntary administration by its board, now exploring a sale of the company.
What happened?
It all unraveled on Monday, 24th March, when the AFR reported that EVP had flagged a “potentially serious issue” and had called in police over alleged financial misrepresentations. EVP publicly stated that they were “pursuing all avenues to recover the investment.”
An industry darling turned into a cautionary tale.
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Why This Matters for Founders
At first glance, this might seem like an isolated incident. But if you’re a founder raising capital right now, this story sends a signal that’s impossible to ignore.
1. Investor Confidence Just Took a Hit
The AI gold rush is still bubbling away, but stories like this shake investor confidence especially in high-risk sectors like AI.
Many VCs are already paranoid about investing at the peak of the AI hype cycle. No one wants to be the next fund that backs an AI startup that looks great on paper but unravels later.
As a result, the bar for AI startups just got higher. VCs will likely be more hesitant, more selective, and more skeptical when evaluating AI startups so if you’re pitching an AI startup, expect longer timelines and tougher scrutiny moving forward.
2. Due Diligence Is About to Get A Little Tougher
VCs are likely already ramping up their investigative processes, especially when it comes to validating financials and customer traction. They’ll ask more questions and double-check more documents.
Realistically, this might only add an extra week or so to the process. So it’ll prob get a little tougher but nothing for most to worry about.
The Unspoken Truth: Even Top-Tier VCs Get Burned
Here’s the thing: this isn’t just another startup scandal.
What makes this particularly jarring is who’s involved. EVP is widely regarded as one of the sharpest VCs in Australia. They’ve built a quality reputation over years of successful deals, with a team that includes ex-bankers, ex-lawyers, ex-founders, and ex-auditors. These are people who know how to spot risk from a mile away.
If a firm as experienced and meticulous as EVP can get blindsided like this, it sends a clear message:
No one is immune. And if it can happen to EVP, it can happen to any investor. This means capital raising just got harder for founders.
Need Help Navigating Your Capital Raise?
Check out some of my most-read articles that break down the capital raising process for Aussie founders.
📚 Raising Capital 101
🧠 Understanding Investor Mindsets
⚠️ Avoiding Common Pitfalls
📈 Advanced Capital Strategies
💡Not sure where to start? Check out the article on The Startup Capital Raising Process it’s a founder favourite.
Final Thoughts
This StrongRoom AI situation is far from over.
But the signal is already loud and clear: The fast moving startup world is all about trust and when that is broken then confidence is dented and everyone pays the price. I think investors moving a little bit slower isn’t such a bad thing.
Your Thoughts?
Unspoken isn’t just here for the juicy scandals. We’ll also be unpacking the more “vanilla” headlines that most founders skim past without spotting the real story buried underneath.
Does this hit for you? Let me know by commenting below, liking the article, replying to this email or hitting me up on LinkedIn.
I’m thinking of making Unspoken a regular thing where I break down the stories that actually shape your fundraising journey.
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Hi - I’m Warwick Donaldson—capital raising expert, and unapologetic advocate for Australian startups. Across my career, I’ve worked on 160+ equity raises totalling over $400m. I pride myself on helping early-stage founders secure funding, avoid costly mistakes, and build investor confidence.
If you’re a founder looking to raise capital, attract top-tier investors, and build a generational business—then hit me up for a chat.
Disclaimer: Excentricity Pty Ltd, trading as CapXcentric (ABN 42 679 978 959, AFS Representative No. 001311296) is a Corporate Authorised Representative of True Oak Investments Pty Ltd (ABN 81 002558 956, AFSL 238184). The information provided in this article is intended for companies and startups and is not directed towards investors. Any statements or representations are general information only and do not take into account your personal objectives, financial situation or needs. Readers are advised to have regard to their own circumstances and consider seeking specific advice from a professional adviser before making any business decisions. No representations are made as to the accuracy, completeness, or reliability of any information provided in this article. Readers use the information provided at their own risk.