Comment by claytongulick
3 days ago
I have so many thoughts about this, I'm not sure where to start.
Doing a raise has always been weird, there are lots of things that impact it, and different players in PE have totally different theses and motivations.
As a founder, finding the right investment partner has always been one of the most important and difficult things.
As a rule of thumb, I recommend to founders that only about 50% of the value of the investor is their cash investment. In many cases, less than that.
The things that are at least as important are their advisors (who open doors for you), their portfolio companies that can partner with you, and the alignment of their thesis and worldview.
I don't see any of that as having really changed much recently, other than a tightnening of capital for non-AI companies, but I suspect we're going to see a big shift there over the next 18-24 months, as the pressure from the LPs to deploy stays the same, but fingers get burnt from this bubble.
Also, don't forget family offices and industry VCs (Optum Ventures, etc...) that have a lot of these features built in to their structure, not just the fund.
It's not our first fundraise, and not our first startup. But something _is_ distinctly different this time. People are no longer willing to wait for years and are betting on nebulous claims in hopes of a huge payout.
And I feel that this goes far beyond the usual VC risk-taking.
I think society at large is increasingly hitting a gambling mindset fueled by algorithms murdering everyone's attention spans and dopamine receptors. Life is also expensive and it's NOT getting cheaper. Combine thag with endless stories of the rich and powerful getting away with heinous acts and most people have stopped caring. They stop caring about the future, they stop caring about any kind of long term thinking, because why would they?
Interesting, I'm curious about the changes - I know AI has drawn most of the pump & dump sharks, just like crypto before it, but there were always a set of responsible holdouts that resisted fad-tech for real value opportunities.
Are you seeing a difference there?
Yes, we are working with responsible VCs: endowments and large well-established companies in the field.
It's as if the whole industry is suffering from a high fever. This is purely my personal vibe, perhaps others might chime in with their subjective opinions.
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