People just throw out terms like network effect without knowing what that means

a really interesting new type of PE / VC / opco hybrid is going to emerge over the next 5 years that basically buys services companies and automates 98% of the work. It will be a massive industry. Think extremely well capitalised AI rollups. They'll become multi-sector because it doesn't really matter what service you're rolling up, the systems you need to build are very similar. This is basically what firms like thrive and general catalyst are already doing. Midwit PE firms that were just financially engineering upside don't have the in-house skillset to do this. You need a combination of people good at talking to instos and raising capital AND people who know how to ship excellent product very fast with AI. i think there will be a golden period of a couple of years where you can run these services companies at extremely high margin and profit, but the risk is that then the world will start to catch up and margins in every services business will erode unless they have a compelling moat eg. network effects. the upside is that the consumer will get a GREAT deal, with tons of services becoming much better, much faster AND much cheaper, all simultaneously

Instinct is currently raising @ $30b. $100M → $500M → $2.5B → $10B → ~$30B in sub 1y. If you're still not inside the private market this should be a good signal to pivot aggressively. Wealth creation is going to be heavily skewed toward private investors over the coming decade.

"I did try to retire at some point in time." Passes founder Lucy Guo joined #FortuneDaily with @Ellie_Austin_ and discussed her early attempt at retirement, her move into venture capital and what led her to want to start another company. bit.ly/4zNHPlt

I've met YC founders who told me they'll give up if they can't raise from Sequoia or a16z. They're ex-Big Tech/Quant Firms, and did YC to build clout and move up the SF social ladder. If they can't raise from Tier 1s, there's no point in downgrading their status to a Tier 2 VC. It's more rational to give up, return to their $400k jobs and try again in a few years.

.@Instinct just raised $1 billion Series C at a $10 billion valuation…with <10 employees. So naturally I had to take a deeper look at who these 9 people are. I created a list that includes: - Current position at Instinct - When they joined - All previous company experience - Education experience - LinkedIn URL - Location - Select emails These folks have a front row seat to one of the fastest growing tech companies this year. Many of them will go on to build their own startups one day. Knowing them early will be critical as every VC and angel will be vying to get in their fundraising rounds. This type of information gives anyone a HUGE advantage in staying ahead. In case you want to check it out with any other company: harmonic.ai/try cc: @harmonic_ai #harmonicpartner

What Cognition doesn’t understand is that we’re sitting on a nuclear weapon to end them Hopefully we don’t need to use it

Excited to introduce @Cosign: the curated professional network for the startup community: cosign.co Our goal is to create the following: - A comprehensive startup directory of investors, companies, and operators, including what they worked on and who they worked on it with. - Cosign graph: Who shaped your career? Who were you actually in the trenches with? Who would work with you again? Who thinks you’re someone to watch? - Durable reputation: Great endorsements happen every day on X and disappear into the feed. Cosign attaches those signals permanently to people and companies. - Discovery: Who are the best fintech angels? Which AI companies should I watch? Who are the best designers? - Intent network: Privately signal “I’d invest in them,” “I’d hire them,” “I’d work with them,” or eventually even “I’d acquire this company.” Match people when interest exists on both sides. Imagine if Wikipedia, LinkedIn, and OG AngelList had a baby. Though Cosign is a community, not a business. In order to join, you need to be cosigned. Or you can apply directly. David Booth and I started this idea 7 years ago but didn’t have the firepower to make it work. Now we do. No one has really touched LinkedIn in 20 years. Excited to take a swing. cosign.co

Why are you allowed to sell 95% alcohol in the US? This cannot possibly be useful for anything.

State of Hard Tech VC Part II Few more things I’m seeing: > The Seed → Series A gap is becoming the graveyard of hard tech. Plenty of capital to fund an interesting technical idea. Plenty of capital to fund a company that has clearly broken out. Ugly part is the $5–20M in between where you need to turn a prototype into an actual company. That requires manufacturing, hiring, facilities, qualification and customer adoption usually before the metrics look pretty. Think a lot of technically successful companies are going to die in this gap. > We may have dramatically overcorrected from “hardware is too hard” to “hardware is cool.” There are now a shit ton of companies getting funded because the technology is impressive, not because the business is. Great demo is not distribution. Successful test is not product-market fit. And a government pilot sure as hell isn’t a repeatable sales motion. Technical validation and commercial validation are two very different things. > Manufacturing is becoming the new software talent war. Finding someone who has actually taken a physical product from 100 units → 10,000 → 100,000 without blowing up quality, cost or schedule is not easy. Think we’re going to see manufacturing operators become some of the most valuable people on hard-tech cap tables. > Next bottleneck isn’t going to be capital. It’s going to be execution infrastructure. Test facilities. Skilled labor. Machine shops. Suppliers. Power. Permitting. Specialized materials. Long-lead equipment. We spent the last decade building an incredible financing ecosystem for hard tech without building the physical ecosystem required to support all the companies we just financed. > Customer concentration risk in hard tech is wildly under-discussed. Having one giant defense prime, hyperscaler, automaker or government program representing 60% of revenue looks f*cking awesome while they’re buying. Until priorities change, procurement gets delayed or the champion leaves. A $50M backlog is not the same thing as a diversified $50M revenue base. > Think we’re going to see a lot more hard-tech companies acquire old industrial businesses instead of building everything from scratch. Why spend five years recreating manufacturing capability, certifications, customer relationships and skilled labor when you can buy a 40-year-old supplier for $15M and inject modern technology + growth capital into it? Venture + lower-middle-market industrial M&A is an extremely interesting combination nobody talks about enough. > Hard tech VC itself is going to bifurcate. Writing the first $1M check and writing the $75M check are increasingly different businesses. One requires finding weird people before they’re obvious. The other requires underwriting manufacturing, contracts, capital structure and scale. Funds pretending they’re uniquely great at both probably aren’t. > The biggest mistake hard-tech investors may make this cycle is assuming the winners of the next decade will resemble the winners of the last one. SpaceX created a thousand space decks. Anduril created a thousand defense decks. Tesla created a thousand EV decks. The outsized return usually doesn’t come from identifying the 50th company pursuing the last breakthrough. Comes from recognizing the next one before there’s a category for it.

Wasn't there an international law against most weapons being allowed in space?

What if I told you that the only way to be successful in VC is to be contrarian. Would you agree?

Dario is right

At the @JoinFAI Moonshots gathering overlooking the Capitol with Ian Mair of @FAIaction, Kendrick Frankel of @wapo, @ChaseHDalton of @cognition Federal, and Chase’s friend whose name escapes me but was a delight.