The "game on the field" is to go stratospheric or explode on the pad. Nothing in-between is ideal. No patience for somebody pursuing their life's work; just a rat race for ARR that turns technology into a hamster wheel that spins ever faster while going nowhere. This attitude resulted in a remarkable immolation of capital in 2018–2022, and is arguably worse today. There is simply not enough intellectual bandwidth relative to the amount of capital in VC right now.

Founders, stop telling VCs you’re only going to raise one round, maybe one more, and then never need capital again. It sounds capital efficient. To a VC, it can sound like you don’t understand how venture works. VCs are investing in companies they believe can compound quickly, attract more capital, raise at higher valuations and create markups along the way. Those subsequent rounds help validate the investment, establish new pricing and give funds something tangible to show LPs long before an exit. If your pitch is “we’ll raise $3M, become profitable and never need another dollar,” you may be describing a great business. But you’re not necessarily describing the type of company the venture model is built to fund. And the other problem is simpler: investors probably don’t believe you anyway. If the company grows as quickly as you’re promising, there’s a good chance you’ll eventually decide that taking another $20M to accelerate growth is rational. Capital efficiency is great. Optionality is great. Pretending you know today that you’ll never raise again usually isn’t.

There may not be many people left in 10 years who can write, or want to read, things longer than a page or two. But there will be at least a few of us, and we'll be a powerful club.

We are currently at the biggest bifurcation in early stage startup funding I’ve ever seen. I’ve had dozens of conversations over the last few weeks with founders, VCs and family offices about what is actually “fundable” right now, and the list keeps getting shorter as expectations rise. There is plenty of capital, but it’s concentrating into fewer companies. At one end, the best companies are raising bigger rounds at higher valuations earlier than ever. At the other, good companies with real revenue, customers and solid growth are struggling to raise at all. The middle is disappearing. Being a good business isn’t enough anymore. Investors increasingly want to believe you can become an enormous business, very quickly. More capital. Higher expectations. Fewer companies that qualify.

RATIONAL CAPITAL The reasonably priced 3T2D series A and B might be the best investment opportunity in the market today These companies are trading at significant discounts to public markets and what financial sponsors will pay Just need to be able to keep the companies solvent and be patient as they mature and market self-corrects In a market where VCs are paying 100x revenue and giving unicorn valuations to companies that haven’t launched a product, this is what we call good ole fashioned rational capital

1). You should never work with VCs who devote their time to dunking on startups on x. Taking money from Sheel’d fund is a hugely negative signal for the startups who do that for this reason, he is bad for the ecosystem and this behavior is a pattern of his. I’d imagine that his fund will have adverse selection because of this sort of nasty online presence. VCs who endlessly critique startups from the sidelines in public deserve no respect. 2). I don’t talk about our etf business much because we did not officially launch it yet, but it’s not that hard to understand that launching ETFs with (typically) 1/3 to 1/2 the fees of legacy incumbents for comparable products is a strategy that will lead to inflows, even if it takes some time. Clowning on us for this is like clowning on any startup for having small revenue while completely ignoring growth rate, unit economics, etc. giving investors choices at a (typically) lowest in category expense ratio is (in my opinion) a good strategy for our company. If you don’t like it, keep paying the high fees and choose other funds (there’s plenty to choose from)!

Right now, you're either: * an AI-native rocketship, which sounds fun until you realize it means being in a permanent fundraising situation at ever more scary valuations to hoover up capital and talent, and in a constant death match with other rocketships to capture customers, sacrificing gross margins; or * basically left for dead, regardless of how good a company you actually are This has been the case for a while, but feels like it just escalated a notch.

Specialist, experienced, product-first, very early stage venture firms FTW. I’ve been discussing this since I first founded @iaventures and it’s the same at @gamechangersvc: an investment from us is a commitment, a partnership to help founders get from 0=>1. Then we help them scale from there. It’s a life cycle approach that starts at the beginning. We have deep founder alignment and what happens matters to all of us. It’s all we do. It’s what we do. And we do it well.

- Platform firms spray the Seed market with high-cap call options, hoping to catch the rocket ships. - If a startup becomes a rocket ship, the Seed price matters much less than access to later rounds. - If it doesn't take off immediately, the high price will make it much harder to raise subsequent capital. - Series A activity falls, as overpriced startups are less able to experiment, pivot and test the market. - The survivors are mostly incremental products with high execution risk and little idiosyncratic risk. - The total real value of the startup world begins to fall, though the contraction is masked by overbidding. - More of the remaining value is concentrated in the portfolios of the platform firms, at inflated marks. - Performance is understood on a relative basis, so the platform firms still appear attractive to LPs. - Smaller firms are washed out of the market, victims of concentration and weaker risk appetite. - Liquidity falls, but exits get much larger which is twisted to claim the concentration is logical. - Large exits are substantially overvalued, and the companies virtually all flounder afterwards. - Innovation slows, fewer jobs are created, and less wealth is generated for pensions and retail investors. - "Tech" becomes associated with rent-seeking oligarchs rather than optimism and progress. <<< We are here. - Butlerian jihad / Luddite rebellion / Socialism.

Underdiscussed: emerging managers helping each other. LP intros, operational advice, co-hosting events, sharing intel. Meanwhile too many large fund GPs often can’t be bothered. What they don’t realize: their reputation quietly takes a hit for it.

As I was saying about venture's Nifty Fifty moment...

It’s insane that this still needs explaining. Venture capital is not efficient. There is virtually no correlation between funding and outcome even up to Series A. Heat is mostly just bidding away returns.

Fundraising is simple today: You either need to be AI with crazy growth. Or you need to be profitable. If you are a mid SaaS business doing triple, triple, double, double, you have raised your last VC dollars.