Episode Overview

In this July 2025 episode of Marks on the Markets, we dive deep into the venture capital landscape with two battle-tested VCs who've weathered the storm from COVID boom to AI revolution. 

Key Themes Explored

The "Quiet Freakout" Phenomenon

• Why even well-funded startups are secretly terrified about the next 6-18 months
• How AI has created a "boxing match during an earthquake" for entrepreneurs
• The unprecedented uncertainty facing venture founders in 2025

The Great Liquidity Crisis

• Why LPs haven't seen distributions in years and what it means for new funding
• The IPO market's slow reopening and what it signals for exits
• How the DPI (distributions to paid-in capital) drought is reshaping the industry

AI's Seismic Impact

• Why this technological shift dwarfs previous internet revolutions
• The emergence of AI-native companies and what it means for traditional software
• Why we're likely underestimating AI's transformative power

The Hardware Renaissance

• How software commoditization is driving investment toward "hard tech"
• The rise of American dynamism and defense technology startups
• Why friction is becoming the new competitive moat

Faith-Driven Innovation

• Learning from social media's mental health failures
• Why Christian entrepreneurs feel called to shape AI's development
• Biblical frameworks for understanding technology's role in society

Standout Quotes

"Everybody is quietly freaking out. You might have money in the bank, you might have venture backers, and yet everybody's quietly freaking out because you just don't know what's going to happen in three months, six months, three years." - Jake Thomsen

"We are on the precipice of what could be the biggest series of technological changes in human history... more radical than at any point in history." - John Coleman

"I continue to believe we are much more likely to underestimate the impact of AI than we are to overestimate it." - Rob Go

"We kind of missed the boat in social media... We can't miss the boat with AI. Believers have to step in." - Jake Thomsen

Deep Dive Segments

The Venture Market Transformation (03:22-15:36) Jake Thomsen provides a masterclass overview of venture's roller coaster ride from pre-COVID normalcy through the 2021-22 bubble, the 2022 crash, banking crisis, and today's AI-driven uncertainty.

Four Forces Reshaping Early-Stage Investing (15:36-25:00) Rob Go breaks down the industry's permanent structural changes: maturation and concentration, Y Combinator's dominance, mega-fund competition, and the AI supercycle's 20-30 year horizon.

The Optimist vs. Realist Debate (25:00-35:00) John Coleman makes the bull case for venture while Rob and Jake wrestle with ground-level challenges, exploring the disconnect between macro optimism and micro struggles.

Hardware's Moment (35:00-45:00) Why the pendulum is swinging from pure software plays to capital-intensive "hard tech" solutions, and whether this represents a fundamental shift or temporary trend.

Faith and Technology (45:00-49:07) A powerful discussion on how Christian entrepreneurs are approaching AI development with lessons learned from social media's unintended consequences.

Guest Profiles

Jake Thomsen - Partner at Sovereign's Capital, focusing on faith-driven founders and early-stage ventures. Previously worked in venture capital and strategic consulting.

Rob Go - Co-founder and Partner at NextView Ventures, a seed-stage VC firm. 15+ years in venture capital with investments spanning consumer, enterprise, and frontier tech.

Key Takeaways for Investors

1. The Power Law is Real: Top quartile VCs still dramatically outperform public markets, but the gap between best and worst performers has widened to 2,000+ basis points.
2. Timing Matters: We're in the infrastructure phase of the AI revolution—similar to early internet days where enabling technologies capture initial value before applications flourish.
3. Defense Through Friction: As software becomes commoditized, companies with hardware, services, or regulatory moats may prove more defensible.
4. Liquidity Patience Required: The venture asset class needs patient capital as exit timelines extend and public market windows remain selective.
5. Values-Driven Advantage: Founders building with clear ethical frameworks may have competitive advantages in an AI-dominated future.

Resources Mentioned

• Hallow (Catholic prayer app)
• "God Looks Like Jesus" by Greg Boyd
• All-In Podcast
• Y Combinator
• Reindustrialized Conference (Detroit)

Connect with Our Guests

• Jake Thomsen: Sovereign's Capital
• Rob Go: NextView Ventures