Thought Leadership Threads

The Evolving Landscape of Venture Capital: Are Emerging Managers DOA?
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There’s been a lot of debate lately around whether the VC ecosystem is being negatively impacted by the largest firms hoovering up LP money at the expense of Emerging Managers. The observation is real and it’s becoming increasingly clear that the venture capital industry is at a critical inflection point.
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But the phenomenon isn’t new. It’s been unfolding for years and was easy to spot. I wrote about it a few years back in a presentation titled “The Three Body Problem: Finding The New Stable Points In Venture Capital” and I’ll add a link in the replies if you’re interested in learning more.

Investors often tell Startup Founders that the distinction between success and failure often comes down to one critical factor: Speed.
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Startups exist in a unique ecosystem where time is both their greatest asset and their most formidable enemy. Every day counts in the race to validate ideas, acquire customers, and achieve profitability before running out of cash.

Fair Value Exchange: A Framework for Valuations
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One of the most critical yet often overlooked aspects of the VC backed Startup ecosystem is the exchange of value between Investors and Founders.

This concept lies at the heart of VC returns, especially relative to risk. And based on data being shared about VC performance, it’s pretty clear that it’s an important driver in the erosion of VC returns in recent years.

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There are snippets in the news every day about the how various currencies around the world are moving.

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The US Dollar is strong. The Japanese Yen is weak. The Nigerian Naira has erased its recent gains. The Venezuelan Bolivar has been crashing. Are you curious what all this means and why certain currencies are “strong” while others are “weak”?

Most outsiders don’t understand that Venture Capital is ultimately a sifting exercise. VCs meet with hundreds (sometimes thousands) of Founders every year searching for the perfect combination of a brilliant idea and an exceptional leader.

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A direct result of the “volume game” is that VCs learn to bucket Founders into a variety of personality types with many of these profiles being “un-investible”.  And just this week I encountered a common red-flag profile that led to a quick decline: The "Need to be Right" Founder.
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In the world of Venture Capital and Startups, there's an unhealthy obsession with “cycles” that's about as useful as a chocolate teapot. Investors and Founders often behave like amateur meteorologists, constantly checking which way the wind is blowing and panicking at the first sign of a storm.
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The truth is that if you're aiming to build a company that'll still be standing decades from now, worrying about whether we're in a bull or bear market right now is like fretting over a pebble when you're climbing Everest.

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In the rollercoaster world of startups, grit isn't just a nice-to-have. It's the fuel that propels companies through the inevitable tough times that precede success. But while everyone thinks they know what grit is, most definitions aren’t precise enough to be useful.

Courage? Conscientiousness? Perseverance? They all miss the mark.
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What follows is a tangible and actionable definition that I’ve found to be quite useful when advising Founders:
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Grit = Vision + Control

Each startup is a unique beast. Until it “cracks the code”, it's just a representation of a Founder’s vision embodied in a business plan.
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And a typical VC Investor will review hundreds (maybe thousands) of these unique pitches every year. Each VC has their own underwriting process, but it's not as formulaic as one would expect given the volume of work moving through the machine.


Because of the unique nature of each startup, company specific underwriting questions need to be answered for any given VC to build conviction around what the Founder believes can be built.

AI, Misinformation, and Market Manipulation

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$100 Trillion is a big number. It represents the approximate enterprise value of all the companies being traded on the stock exchanges around the world. And guess what’s really scary? Every one of these stock markets is on the verge of breaking but not a lot is being done to repair their foundations.

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The truth is that a perfect storm is brewing that combines AI-generated misinformation, social media virality, and automated trading. This cocktail could lead to unprecedented market volatility and manipulation that won’t be easy to combat. At the very least, significant damage could be done while solutions are crafted and operationalized.