2026-11-02 08:07:16
Temporal or structural? That’s a question many pose about the growth of the largest venture capital firms into multi-multi billion dollar investment managers and the increasing concentration of dollars in outlier companies regardless of their stage. For purposes of this post I’m going to argue it might not matter, because (a) we’re definitely not returning to cottage industry status regardless and (b) any ‘correction’ will likely take place over a period of time broader than a single fund cycle of deployment. That is to say, the semi-truck is hurtling down the highway with such force and velocity that its speed is going to remain the same for a while, whether it hits some obstacles in its path or finds itself unmolested.
There are many venture capitalists embracing the notion of consensus investing right now, some with glee, others with a ‘it’s the game on the field’ shrug. Regardless, the incentives at an individual level are very much pushing in this direction. Try as we might, Satya and I have failed to get excited about leaning into an full blown ‘access’ strategy for Homebrew – that is, put our supporting checks into anointed companies while remaining stage agnostic and totally indifferent to whether you get to help out/learn along the startup. It’s just not why we got into this business. Doesn’t mean we don’t find ourselves involved with some of these ‘rocketships’ but it’s a byproduct of our strategy, not a change in our strategy.
At the same time, it’s increasingly difficult to be truly non-consensus, which to me means, you are not only participating in a funding round that’s far from ‘oversubscribed,’ but that you are willing to fund the subsequent round(s) as well. My observation is there’s not enough diversity of investment interest among major VCs for you to take a company you’ve backed to market and get it funded if it isn’t in (or edging close to) the mainstream consensus buy box. So if you really want to play in this non-consensus world as an early stage institutional VC you need to (a) be willing to over-concentrate your funds in a few companies by writing multiple checks and/or (b) help them access investment capital which isn’t coming from traditional venture firms [or find the minority of these who have a prepared mind for something different].
That’s why I stress ‘pre-consensus’ to many emerging managers – can you be a click ahead of the bigger firms, but not too far ahead? Your pre-seed or seed investment needs to ‘ripen’ into consensus within 6-24 months and if you can nail this motion, you’ll have epic returns (or at least markups). What percentage of skillful pre-consensus is actually being early to a trend versus having the ability to incept a trend? My opinion is it’s biased towards the former, but the latter is non-zero – especially if you’re backing founders who can spin a narrative and sell well alongside your own similar efforts.
Is this a framework? A mindset? Simply semantics? I don’t know but I’ve been stressing it to people who ask me whether there’s anything to do besides be a consensus investor these days.
2026-11-02 06:53:53
Today I’m wondering if a period of extended shakiness in the AI market would lead to government intervention as equity or debt buyer of last resort? Certainly can see folks believing it’s in the national interest to own parts of these companies [in particular Anthropic, OpenAI, maybe some neoclouds/inference players]. The ‘golden share’ with Intel and others creates some recent precedent. Nonzero chance in my mind.
2026-10-12 22:26:27
Early stage funds have grown to the size where they want/need to exercise their pro rata rights in multiple rounds. This is a change.
The potential for ‘outliers’ being 10x, 100x bigger than last cycle also means Series B, C etc aren’t *just* 5-10x upside bets. They’re still 20x, 50x, 100x potential in the best case scenarios.
The names also have hot secondary markets so you feel like you are buying pro rata shares that you can flip if needed. It’s becoming a trade as much as an investment.
There are also lots of Fund of Funds, SPV Vehicles, etc that will help a smaller fund take/monetize their pro rata when their core fund can’t support it and/or the return profile of the round doesn’t fit the fund’s mandate. These didn’t exist at this scale even just a few years ago.
Rounds are coming faster and faster so more successive rounds are occurring within a fund’s initial investment period versus being ‘out of cycle’
So expect more potential pro rata conflicts, not fewer, going forward.
There are also large firms who have traditionally been quite aggressive with founders about doing their pro rata when they want, relationship/round dynamics be damned, so this isn’t just about smaller managers.
2026-10-05 06:59:17
Mercury is a leading banking++ software platform for businesses (disclosure: happy small investor in the startup). I’ve found their CEO Immad Akhund to be a thoughtful leader, so was excited to see his recently published “Principles of Writing” to steer communications at Mercury, especially in the face of AI usage. Immad credits Clay’s Varun Anand for the inspiration which I too found to be worthy of review in an earlier post:
I’ll re-publish his opening here, but read the whole thing!
Principles of Writing at Mercury
1. Writing is thinking: Spending time on writing is not wasting time, it helps you process ideas, analyze problems, and explore solutions.
2. Less writing is better: Good writing is concise, which makes it easier to understand.
3. Reading should be easy: If >2 people will read your writing you should spend extra time making your writing good + digestible + clear etc. It is not fair for people reading to do work that the writer could have done for them.
4. Writing is expression: Your writing will be taken as an expression of your identity, so give it the care it deserves and be authentic.
5. Writing is important: Writing is the main way we communicate internally at Mercury, as a remote-first firm. We frame important discussions, and document thought processes and ultimate decisions, with our writing.
2026-09-25 03:40:57
Giving at least a courtesy reply to every initial cold email received was a longstanding goal of mine, especially when they were from entrepreneurs or folks trying to break into tech. The ROI in this commitment was always questionable (although we found at least one great investment this way), but it came down more so to values: when someone clearly put the effort into trying to reach me, I wanted to respect them. People did this for me in various ways and I would pay it forward! The evangelism even extended to preaching repeatedly that the power of a good cold email should never be underestimated. But now in 2026 I might need to discard this principle, and it’s because of AI slop.
“Hi Hunter – You’ve written about [non existent blog post, or something I did write that the LLM misunderstood] and your investments in [often the most random of our portfolio companies] makes you an excellent candidate for our current fundraise.”
Of course there are infinite variations of this, but the number of clearly AI-authored and automated cold pitches has increased so dramatically in the last few quarters that reviewing emails from senders I don’t recognize has gone from moderately enjoyable to just awful. What’s even sadder is these folks are poisoning the channel for people actually doing thoughtful outreach. A digital tragedy of the commons?!!?
How to solve this? Well, since my email client Superhuman bought GPTzero I assume some sort of “send AI emails to spam” option is coming but (a) I’m worried about false positives and (b) this seems like a cat and mouse game. Do we need to rethink some version of sender reputation scoring at an individual level (ie how to determine that the sender is of interest to me by some measure – so you don’t need an intro, but you do need a footprint)? This is more nuanced than general spam filtering.
Until then, I’ll try my best.
2026-09-14 01:59:19
“I don’t know if AI is going to destroy humanity. Neither do you. But here’s what I do know: It’s very difficult to have a sober conversation about this when there’s so much money at stake.”
per usual, very much appreciate Dan Primack’s sensibilities here
