Dead Cat

I just faced off with an old foe — Mike Solana, the founder of Pirate Wires.

I’m sad to report that it was a chummy affair.

We discussed whether the New York Times as an institution should continue to exist, the state of bias in tech media, tariffs, China, and our respective media businesses.

I suspect that you’ll find it an enjoyable watch — our two worldviews collide and find they share plenty of common ground.

Somehow, I doubt this will be my last chat with Solana. We still have plenty to disagree about.

Sapphire Partners’ Beezer Clarkson — the rare limited partner brave enough to share her thoughts publicly — just joined my Substack Live to talk about her latest analysis of the state of venture capital.

You can listen to the recording in the video above. Clarkson published her findings on LinkedIn — and I’m including some of the key charts and takeaways below.

Clarkson asked whether megafunds are sucking up so much oxygen in venture capital that they aren’t leaving any room for smaller, boutique VC firms:

The traditional early-stage playbook is under pressure and I share the concern that replicating the venture returns of the past bull market looks increasingly hard (impossible?) to do.The reality is more nuanced. The market is shifting, competition is fiercer than ever, and what I see is an evolution of venture.

Thankfully, while megafunds loom large in priced seed rounds that raise $10 million or more, there seems to be plenty of room to go around among smaller deals. And even in larger deals, boutique firms still write a big chunk of lead checks.

Similarly, with Series A rounds, megafunds gobble up the largest share of the largest deals.

Clarkson concludes in her piece,

No. I don’t think venture is broken.

I get why many GPs and LPs would think it is. The odds of replicating the bull market–level returns any time soon look slim from my standpoint. Mega-funds are showing up earlier, valuations—especially for hot seed and A rounds—are stretching, and LP capital is concentrating in fewer hands.

a16z Dominates Seed & Series A

As part of the research effort, Clarkson also looked at which firms have been the most active in seed and Series A since the first quarter of 2022.

What stood out to me is just how active Andreessen Horowitz has been relative to the rest of the crowd.

On the Substack Live, we also discussed a16z general partner Martin Casado’s recent viral tweet: “The idea that non consensus investing is where the alpha is, is actually quite dangerous in the early stage. Follow on capital tends to be more and more consensus aligned.”

Give it a listen.

You heard it here first that Substack was trying to raise a substantial new round of funding.

Today, Substack announced that it had raised $100 million at a $1.1 billion valuation in a round led by BOND and TCG. The New York Times had the story.

I told you that Substack’s growing mobile application and the prospect that Substack might someday dip its toe into sponsorships were two reasons that investors were excited about what started off as a mere subscription newsletter business.

This afternoon, I jumped on a Substack Live with Substack co-founders Chris Best and Hamish McKenzie to talk about their app strategy and Substack’s approach to advertising. We also chatted about the company’s view on artificial intelligence and the anti-Trump political mood on its network.

Give it a listen.

Full transparency: I like the team at Bloomberg Beta.

I worked at Bloomberg as a technology reporter for nearly six years before I started this newsletter. During my time at Bloomberg in San Francisco I got to know the team, including its leader Roy Bahat.

So when Bahat came to me with the news that the firm is announcing its fifth fund — another $75 million fund from Bloomberg LP to back the earliest of early startups — I said he should talk about the decision exclusively on our Substack Live.

You can watch that conversation in the video included in this post. We talked about Y Combinator’s impact on startup prices, the mood among seed investors, and Bloomberg Beta’s investing philosophy.

Bloomberg Beta’s investments include Replit, Flexport, Air Space Intelligence, Lambda Labs, LaunchDarkly, MasterClass, Netlify, Shield AI, Streamlit, and Weights & Biases.

The strategy has remained remarkably consistent: invest in startups with world-changing ideas as early as possible — not to get Bloomberg customers or strategic partners — but to make sure Bloomberg stays on the cutting edge of what the startup world is building.

The team has three general partners: Bahat, James Cham, and Karin Klein.

In 2022, Bloomberg Beta raised its fourth venture fund and its first opportunity fund — $75 million each. Bahat says the firm still has about halfway to go to deploy the opportunity fund. The firm raises all its money from one limited partner, Bloomberg LP.

They aren’t painting a story of reinventing venture capital. Bahat compares it to a chef who “says they really care about cooking food.” The firm is focused on finding interesting founders early. “How many founders have become millionaires after we invested? That’s the point of pride more than rate of return.” (Bahat pegs the number of millionaires his firm has helped to create at 93.)

“We have tried to be innovative in as few ways as possible,” Bahat says. Best to leave the innovation for the startups.

I just got off a live video recording with Wing founding partner Peter Wagner. We dissected the Enterprise Tech 30 list that we published earlier today.

We talked about what companies got snubbed, who made a sudden appearance this year, what we can learn from past lists, and much more.

Give it a listen.

Just wrapped up a 30-minute conversation with Sequoia’s Andrew Reed.

We talked about what the DeepSeek drama means for private tech startups, his view on forever-private startups, the rise of venture capital megafunds, and some lessons from his time at Sequoia.

Andrew Reed is a Partner at Sequoia Capital. He is on the boards of Figma, Klarna, Bolt, Vanta, Strava, Harmonic, and Warp, among others, and led investments in Phantom, Odoo, and Zapier. Reed was previously involved with Sequoia's investments in Robinhood, Loom, and GitHub. He joined Sequoia in 2014 and is interested in creative products, developer tools and networks, cryptocurrency projects, and global internet companies.

Give it a watch!

Join me for my next live video in the app.

Waymo’s milestone — surpassing Lyft’s ride numbers in San Francisco — takes center stage in our first podcast of the new year.

Still, it’s not obvious that this translates into guaranteed scale across the country. We consider the operational headaches that come with scaling driverless fleets. One way forward for Waymo could be further collaborations with legacy rideshare giants like Uber.

We also break down Whatnot’s latest round of funding and debate whether a potential TikTok ban could give the live shopping startup a competitive advantage.

Give it a listen.

Chapters:

00:00 Introduction

01:35 Waymo's Progress and Challenges

10:21 Whatnot's big fundraise

Episode produced by Christopher Gates

The ServiceTitan IPO has been an unexpected bright spot as 2024 comes to a close.

On this year’s final episode of the Newcomer Podcast, we discuss what other startups might follow in ServiceTitan’s footsteps next year. Eric defends the controversial ratchet provision in its last funding round. And we dig into Alphabet’s big week.

We focus on startups on this show, but this week was a good reminder that the big tech firms like Alphabet and Meta can still turn out impressive moonshot technology from their research labs.

We’re bullish on a couple emerging venture capital firms — Laude Ventures and Dimension — who just closed big new funds. The megafunds may be sucking up the majority of LP dollars, but firms with a clear thesis and a standout team of high performers can still shine in this market.

Give it a listen.

Chapters:

00:00 — Reflections ahead of the new year

05:02 — ServiceTitan’s IPO and Market Sentiment

10:00 — Alphabet’s Wins and the AI landscape

15:08 — The State of Quantum Computing

19:58 — Emerging Venture Capital Trends and Final Thoughts

Episode produced by Christopher Gates

After a brief hiatus, the Newcomer podcast is back!

Madeline Renbarger has rejoined me as my co-host to help break down all of the news across venture capital and startups.

This week, we’re kicking off with a massive $693 million chip deal and Google’s huge quantum computing breakthroughs, in news that feels like flashes of Silicon Valley returning to its “silicon” roots. Still, some of this tech feels a bit too early to be exciting for a venture-backable model.

We also dig into the personnel shake-ups across the major multi-stage funds, including Brian Singerman’s step back from Founders Fund last week. Lightspeed also saw partners exit as part of a consumer investing reshuffle. And just this morning after recording, Lux Capital’s Bilal Zuberi announced on X that he was leaving to “embark on a new chapter.”

We’re excited for you to listen.

Episode produced by Christopher Gates

Brought to you by Brex

Brex knows runway is everything for venture-backed startups, so they built a banking solution that helps them take every dollar further. Unlike traditional banking solutions, Brex has no minimums and gives startups access to 20x the standard FDIC protection via program banks.

Plus, startups can earn industry-leading yield from their first dollar — while being able to access their funds anytime. If you want to make sure your portfolio companies have a place to save, spend, and grow their capital, check out Brex here.

Chapters

00:00 - Intro

01:06 - Tenstorrent’s $693 million Series D

04:44 - Google’s Quantum Computing Breakthrough

06:42 - Lightspeed’s Consumer Investing Re-org

09:24 - Brian Singerman Steps Back and Founders Fund’s Roster

14:08 - Mega-funds in Transition and Tech’s Trump Positioning

20:19 - Conclusion and Future Discussions

I’ve been spending some of the afternoon chatting with OpenAI’s now fully released o1. So far, I don’t know that it feels like the super intelligent ChatGPT 5 that we’ve all fantasized about — but it’s smart and sophisticated. The new model helped me to game out potential stories and talk through problems. And of course it wrote me a poem and told me a couple dad jokes.

It looks like the biggest improvement in the news model may be in math and coding, where OpenAI is highlighting meaningful improvements over o1-preview.

It will take some time to digest the new version of the model and see what it says about the pace of AI advancement.

Before the latest update, Max Child, James Wilsterman, and I got behind our microphones to reflect on the Cerebral Valley AI Summit and give you some of our takeaways.

(Max has already hooked up the advanced voice mode of ChatGPT to his iPhone action button. Good bye Siri, hello ChatGPT.)

Give it a listen.

Brought to you by Brex

Brex knows runway is everything for venture-backed startups, so they built a banking solution that helps them take every dollar further. Unlike traditional banking solutions, Brex has no minimums and gives startups access to 20x the standard FDIC protection via program banks.

Plus, startups can earn industry-leading yield from their first dollar — while being able to access their funds anytime. If you want to make sure your portfolio companies have a place to save, spend, and grow their capital, check out Brex here.

00:00 — Cerebral Valley AI Summit Overview

02:50 — Key Takeaways from Alexandr Wang's Talk

05:46 — The Wall in AI Foundation Models

08:57 — Dario Amodei’s Perspective on AI Progress

12:13 — Investing in AI: Insights from Martin Casado

15:06 — The Future of AI Agents and Voice Technology

17:56 — The Role of AI in Gaming and User Interaction

20:46 — AI in Enterprise: Trends and Predictions

24:03 — Challenges in Robotics and Home Automation

26:58 — Marissa Mayer on Google's Future in AI

29:51 — Final Thoughts and Future Outlook