The function of VCs right now is to allow small companies to compete for talent with the $T monsters. This enables activity but at a cost of overvaluation. Hard conundrum to solve.
Fascinating analysis on how venture is reshaping itself. Sequoia and a16z are becoming more like PE funds. They don’t want to just fund outcomes but they want to control them. Venture is going split into a two-tier industry and those in the middle will not be able to survive. It’s either go big or stay nimble and specialized. @Max Bray I cover similar shifts in the LegalTech sector where we’re finally seeing capital and scale converge. My latest post breaks down the biggest M&A transaction we’ve seen in this space.
“So at the early stages, there are 2831 funds looking for 13 companies per year - 1:217 odds (0.45%). Or, per fund, you have a 1/217 chance of finding one in a given year.” - I’m not sure what do you want to say here but it isn’t the odds of finding a unicorn. It just reflects the chance that a single fund can access one of the 13 companies in a given year, assuming each company only takes one fund.
Great read, Max - The timing and framing are spot on. The power shift toward founders is real, and it’s forcing funds to differentiate in ways that actually matter.
What’s interesting is how venture platforms like a16z are leaning into this shift rather than resisting it. Their platform has effectively become an operating system - funded by the ~$700M in annual fees they collected this year, and likely >$1B+ if they raise the additional $20B they’re targeting.
Those fees aren’t just overhead; they’re reinvested into a machine:
A New Media team shaping narrative and distribution
“launch-as-a-service” that gives founders plug-and-play go-to-market strategy
A deep pool of operators, network access, and cultural capital
In a world where founders have more options and more leverage, the VCs who win will be the ones who function less like financiers and more like compounders of momentum. Money gets commoditized; Distribution, narrative, and network leverage do not.
Hey readers — I just launched The Impact Report, a newsletter for founders, operators, analysts, researchers, VCs, and investors who want to understand the people and systems shaping the future of infrastructure.
Here’s the first issue if you want to check it out.
The function of VCs right now is to allow small companies to compete for talent with the $T monsters. This enables activity but at a cost of overvaluation. Hard conundrum to solve.
Love this. Amazing in fact. Your brain and ability to explain things never ceases to amaze me. Hope you’re well. Keep it coming.
Lovely to hear from you!
Fascinating analysis on how venture is reshaping itself. Sequoia and a16z are becoming more like PE funds. They don’t want to just fund outcomes but they want to control them. Venture is going split into a two-tier industry and those in the middle will not be able to survive. It’s either go big or stay nimble and specialized. @Max Bray I cover similar shifts in the LegalTech sector where we’re finally seeing capital and scale converge. My latest post breaks down the biggest M&A transaction we’ve seen in this space.
https://harshithviswanath.substack.com/p/breakdown-of-clios-acquisition-of
“So at the early stages, there are 2831 funds looking for 13 companies per year - 1:217 odds (0.45%). Or, per fund, you have a 1/217 chance of finding one in a given year.” - I’m not sure what do you want to say here but it isn’t the odds of finding a unicorn. It just reflects the chance that a single fund can access one of the 13 companies in a given year, assuming each company only takes one fund.
you might enjoy this https://open.substack.com/pub/goodscience/p/the-slow-cancellation-of-innovation?r=d2jq2&utm_medium=ios
If you’re interested, we’ve released a piece about the share of women in senior-level DeepTech investing.
We mapped 134 specialist and generalist funds across Europe and identified 379 people from Principal to Partner.
Out of the 379 people, 72 are women. That's ~20%.
https://thebigbyte.substack.com/p/senior-female-deeptech-investors
Great read, Max - The timing and framing are spot on. The power shift toward founders is real, and it’s forcing funds to differentiate in ways that actually matter.
What’s interesting is how venture platforms like a16z are leaning into this shift rather than resisting it. Their platform has effectively become an operating system - funded by the ~$700M in annual fees they collected this year, and likely >$1B+ if they raise the additional $20B they’re targeting.
Those fees aren’t just overhead; they’re reinvested into a machine:
A New Media team shaping narrative and distribution
“launch-as-a-service” that gives founders plug-and-play go-to-market strategy
A deep pool of operators, network access, and cultural capital
In a world where founders have more options and more leverage, the VCs who win will be the ones who function less like financiers and more like compounders of momentum. Money gets commoditized; Distribution, narrative, and network leverage do not.
Hey readers — I just launched The Impact Report, a newsletter for founders, operators, analysts, researchers, VCs, and investors who want to understand the people and systems shaping the future of infrastructure.
Here’s the first issue if you want to check it out.
https://substack.com/@gabrielvito/note/c-177360489?r=1jb6v8&utm_source=notes-share-action&utm_medium=web
在中国的风险投资行业，这个趋势正在发生，由于人民币市场的绝大部分LP资金来源已经是国资/国资相关的资金，那些“大型风险投资基金”本质上已经是政府职能的某种外延……