OpenLP✓

Henri Pierre-Jacques @hpierrejacques

There is a confidence gap happening in venture capital right now. On one side, you have new portfolio companies growing at a pace we have never seen before. Companies are going from $0 to millions in revenue seemingly overnight, and the biggest AI companies are creating value at a scale that can make almost everything else feel small. I saw a chart recently showing that Anthropic, OpenAI and SpaceX alone could potentially generate more returns than decades of tech IPOs. Whether the exact numbers play out or not, it puts the scale of today's biggest winners into perspective. On the other side, many investors still have significant value tied up in companies from the previous cycle. Some of those companies are still growing 2–5x year over year, but they're struggling to raise capital, founders and employees are tired, and the path to the next round or exit isn't always clear. Eventually, the new companies may grow enough to outweigh the old portfolio, but we're in this weird period where both realities exist at the same time. That's creating a confidence problem for both investors and founders. You can have a company growing 5x and still feel behind. You can go from $0 to $3M to $10M and wonder why you're not moving fast enough because every week you're reading about another company going from $100M to $1B. As an investor, you can have a portfolio that is objectively performing well and still question whether it matters if you don't own one of the 3, 5 or 10 companies that ultimately define this generation. The extreme outcomes at the top are distorting our perception of what good looks like everywhere else. I don't think that means the other companies don't matter. There will be generational companies worth $10B or $25B that never become trillion-dollar companies. There will also be great funds that don't own one of the three biggest winners of this cycle. AI is here to stay, but I don't believe today's growth rates and valuation increases will continue forever. At some point th market will reset, like every cycle eventually does. The hardest thing right now is staying focused when everyone around you is talking about the outliers. For both founders and investors, the answer is the same: don't let someone else's outlier change your definition of progress. Keep building, keep investing and keep surviving. The goal isn't to win the headlines today. Its to still be building when the cycle turns. Thats where the next generation of great companies will come from.

Rob Go @robgo

It's been about a year since I wrote my post about the Existential Crisis for Seed VC's. Some updated thoughts here on the three paths forward for seed investors.

Dan Gray @credistick

The average emerging manager backs more than twice as many outlier profiles than a megafund, per investment. Pooling 5 EM portfolios increases the range of investments significantly, while the same is not true for the more homogenous megafunds. At the earliest stages, venture capital is built on discovery; innovation relies on an appetite for companies outside of "legible" categories. Megafunds' revealed preference is to dominate existing categories, rather than drive discovery. So, the market will continue to rely on small and emerging managers for discovery. Thanks to @dealroomco for letting me loose on their data to test this hypothesis. Full report available here:

Beezer Clarkson @Beezer232

👋 SF, I'm back! Just recorded my first Origins Pod from the new LGT office in downtown SF. Been a wild couple of weeks launching my son to college and a big move back to the Bay, but so happy to call this place home (again!) 🌁