Why Seed Rounds & AI Matter in Venture Capital

\"You build this thing, it has this huge moat and every extra revenue, customer, whatever it gets, increases the size and the moat puts distance between it and itself... That's what I want to put money into.\"

• Focus on building products with strong competitive advantages.
• Aim for business models that benefit from network effects.

\"If the market stumbles... you probably need... someone to sit down and have that conversation with, and that's probably your venture person.\"

• Choose investors who provide guidance during tough times.
• Investor involvement can be key when facing market challenges.

\"I don't know what AI is gonna look like 5 years from now... You have to be, you have to be on the field to even learn.\"

• Stay involved in AI developments to remain competitive.
• Be prepared to adapt as the AI landscape changes.

\"We as a venture industry have to think about how to create monopolies... We want companies with increasing returns to scale, with deep defensible moats.\"

• Develop unique advantages that competitors can't easily replicate.
• Strive for models that benefit from scale to dominate the market.

\"Whenever there's a hiccup... we're usually the ones working it. I think this is a big transition right now in the seed world. Sometimes when those calls are being made, it's not the Series A guys or the multi-stage funds that are doing the work.\"

• Partner with investors who are hands-on and supportive.
• Ensure your investors are committed to your long-term success.

\"Your best path to scale from a financing perspective is America. The rounds are bigger, chances of success are correlated with bigger round sizes.\"

• Explore fundraising in markets with larger capital availability.
• Bigger funding rounds can correlate with higher chances of success.

\"In the case of Dark Trace... we did not sell. And had we sold... we would have been a 10X fund on Dark Trace... So I think the formula that we now have is... as soon as you're out of lockup, a third of it you sell, a third of it you sell 6 months later...\"

• Implement a planned approach to selling shares after IPO.
• Timing exits can affect overall returns; learn from past experiences.

\"So if we see early traction in any one of our companies, we will figure out a way to put more capital in... we're getting closer to like 15-20% ownership pretty consistently over time.\"

• Show early traction to encourage existing investors to increase their stake.
• Building confidence through progress can lead to more funding opportunities.

\"We would have been, we are not doing foundational model deals. They're too expensive, too capital intensive, never gonna go, not a seed fund's, not a small seed fund's place to do that. And then Cusp walked in the door, which is this foundational model for material science.\"

• Founders should consider building foundational models if they solve significant problems.
• Investors may back foundational AI startups despite initial hesitations.

\"I think most of us become momentum investors in this industry. We write the check largely to get the next markup, not to build the long-term durable big company of tomorrow, and I don't think there are that many people in Europe who do those kinds of things.\"

• Founders should aim to build companies that create new categories.
• Being contrarian can lead to significant market opportunities.