Jonathan Abrams

I've written a new post about why @kentlind and I started @8bitcapital: "It’s all about connecting people" jabrams.com/its-all-about-…

One under-discussed dynamic in LP investing is the principal-agent problem The people doing the work and building conviction are often not the people making final decisions…they’re advocating to a broader committee This can create situations where the most internally defensible decision and the best long-term investment decision are not always the same thing Especially once career risk enters the equation

Just a reminder: Investors have no clue which ideas will actually work. Some of the best companies in the world were passed by hundred of investors originally because investors couldn’t see the future. look at what the "hype" was every year versus the companies that won big

If you pick up someone at the bar and get rejected, it would be weird if they then said “but how can I be helpful?” So when an investor says that to a founder they pass on, it’s equally performative and unnecessary. People who want to help you don’t preannounce that they’re going to help you — they just fucking do it. So be an adult and part ways with a simple “not a fit but good luck out there!”

This tweet single-handedly made Anthropic and OpenAI scramble and issue full statements on secondary stock deals. $500B of paper value just got wiped out overnight.

This deserves a longer form blog post but for now a thread about an idea mentioned in our Q1 LP report. We have a saying at Altos. Organize our funds around companies — not the other way around. It sounds simple. In venture, it’s almost heretical.

It’s hard to overstate the amount of fake SPVs circulating in the market right now. They have always been a controversial financing tool — with Anduril, OpenAI, Anthropic, etc fighting against them for years. If companies crack down against them as promised (cancel shares, void any transaction), people are in for a rude awakening after lock ups expire

none of the billionaires i have ever known had one of their employees holding an umbrella for them

@Rick_Zullo What could go wrong? 🤣

“Founder bets” used to happen at a $10 MILLION valuation Now, they’re happening at $10 BILLION valuations A lot of $ sloshing around at big prices with the investors applying the same rigor (or lack thereof) that would normally be reserved for seed-stage flyers

Some people started here

There’s an entire class of VCs who will only invest if a tier 1 is leading They waste a ton of founders’ time pretending to be able to lead rounds only in the hopes that a warm relationship will enable them to participate in a hot round Avoid them like the plague

@oanaolt 😱

Tonight I went to two events The first one frankly was depressing (at least for me it was) Emerging managers(lots) and LP (few) mixer This is what the room looked like

It’s fascinating how few talented people want to focus entirely on super early stage investing anymore. Not long ago, it was where everyone wanted to be. Now, it’s mostly mega growth, or multi stage with a bit of seed and pre seed mixed in. For most, it’s probably too much effort relative to writing large checks into scale up companies. Times have changed.

43 years ago today, one of the best early multiplayer games ever was released: M.U.L.E. Most games in the 80s were single-player experiences. Some offered a two-player option. M.U.L.E. was the earliest to introduce a true four-player option. The auction system was brilliant, and so was the bidding for each plot of land. Very basic principles of supply and demand, beautifully packed into a game. It was also a great example of blending real-time and turn-based gracefully, getting the best out of both styles. I still consider it one of the best games of that early to mid 80s era. Ozark Softscape created some wonderful games; one of the true pioneers of the 8-bit era. The heart and soul behind Ozark Softscape was always Danielle Berry Bunten Berry, and she always put a strong emphasis on the importance of a multiplayer option, quote: "No one ever said on their deathbed: Gee, I wish I had spent more time alone with my computer." - I am sure everyone agrees that playing against your friends is infinitely more fun than against the computer.

On April 22, 1993, students Marc Andreessen and Eric Bina from the University of Illinois programmed one of the first web browsers with a graphical interface. #InternetHistory

The reality described in this article is bleak. The "winners" in venture capital are now so few, and absorb so much capital, that it is challenging the return math for smaller, earlier investors. They must fight, tooth and nail, for as much ownership as they can get in these winners and be happy with a relatively mediocre outcome, after dilution. If they try to invest in more "value" oriented opportunities, they're likely to find they just don't have a viable path to a venture-scale exit. It's a depressing read for anyone outside of a multi-billion dollar AUM platform firm. Fortunately, it's a work of fiction based on events which should not be mistaken for a new normal. For a decade, companies didn't need to exit because private capital was so cheap and abundant. And then, for the last four years, they haven't been able to exit because the market was cooked by rising rates and geopolitical uncertainty. As a result, there's a backlog of private companies who otherwise would have exited, and they are: A) Very obviously winners, because of their scale and market dominance B) Well capitalised, because they are essentially long-term momentum bets for the scaled venture industry ...but this backlog will clear. Additionally, the market will eventually reach a more productive equilibrium with AI as it becomes just a regular part of workflows and technology stacks. At that point, the "winners" will no longer seem so obvious, and cremating returns with overcapitalisation will look more obviously stupid. A rational private market response to a rising cost of capital is to seek exits more quickly. Once the market has cleared this hump, that is the likely future for venture capital. As such, the case for small and emerging managers actually strengthens. There will be a greater volume of exits, on shorter timelines. They will be smaller, but they will also be much less dilutive. This is also likely to produce a wave of growth for public market investors, and a groundswell of productivity led by a decentralisation of technology, from a handful of providers to many. The large platform firms will continue applying their influence to manifesting new bubbles, and anointing new winners, but it's not clear that their strategy will persist at the scale it has today.

This is where “uppercase” and “lowercase” came from. In the early days of printing, capital letters were kept in the upper compartments of the type case, while the smaller letters were placed below for easier access.

Gen Z and parents favor old-school tech like iPods and digital cameras for a simpler, less plugged-in life: 'People are just sick of it' trib.al/5jaxgnn

@ncsh @unpopularvc We just had our 30th anniversary annual meeting and I told LPs that this is not good for them. Also bad for founders and the ecosystem. Creates systemic risk. VC is supposed to be the anti-fragile part of their portfolios.

We are in the age of consensus capital: 1- Almost 75% of all LP $ raised by 5 funds 2- Almost 75% of all VC $ invested in 5 companies