Jeff Greenfeld

@wolfejosh Net AGI migration 👀 lol okay

It’s as if politicians plans (almost always Democrats) to just tax and tax its productive job and wealth creating entrepreneurs and investors… …Doesn’t quite add up does it?

@sean_from_earth The faster that spam accelerates, the faster it drives itself into irrelevancy. -guy who writes an enail newsletter

Imagine discovering the power of LLMs and thinking "I'm going to build a workflow for generating cold emails" and then not throwing yourself out the nearest window.

If VCs were really skilled at picking successful businesses ex-ante, the best managers would have successes rates well above that of a coin flip. In reality, it doesn’t happen. The best VCs understand success is a coin flip. Which is why VC optimizes to AVOID LOSERS rather than identify winners. VC investing is more like poker than roulette. See lots of hands, fold the bad ones, and pour money into the ones that, after some performance, seem likely to beat the others. Founders: understand the game you’re playing when you pitch to VCs.

It’s just autocorrelation! Yes there’s some skill in maintaining a network advantage but the skill certainly doesn’t come from selection, otherwise we would expect to see win-rates exceed that of a coin flip. Which is pretty intuitive, I think, for dismantling the selection skill myth.

@JeffiniteVC Compounding access comes from skill! Lots of thoughts on this will come back later - appreciate the debate.

It’s funny that this list represents firms with some of the best returns in venture… No risk, no reward. Nothing ventured, nothing gained. Naturally they didn’t know about fraud when they invested - but the outlier personalities which generate outlier returns are risky…

You’re conflating outcomes with mechanism. Persistence can result from skill and/or compounding access. Top funds restrict LP access, time fundraises when marks look good, and get first-look on deals because of prior logos— not prior analysis. This paper can’t isolate which is driving results here. But all we have to do it look at the hit rate of VC investments. When the best firms are batting .500, you know success is more a function of a coin flip than skill. When 10% of startups drive 90% of returns and top managers can’t reliably identify such companies ex-ante (everyone admits to this), how can you credibly argue that persistence is a function of selection ability? And if the answer is “networks,” then isn’t that just compounded luck? Meeting the right people at the right time?

@JeffiniteVC No it is not. There is some luck involved for sure. But if your statement were true we would not have persistence of fund performance across multiple funds.

@yacineMTB The problem isn’t when the ideologues are at the silly little microblogging platform. It’s when they’re in charge of the government. Like right now

As someone who read Twitter's code base all the way through, including commits and random team design docs. Elon buying twitter actually saved the western world. You guys have no idea the kinds of shit that extreme ideologues were cooking up

@credistick It’s funny because cows dont give a shit about a vibrating collar

a16z pays $10,000–$14,000 per associate per month. A Los Angeles company puts a solar-powered smart collar on associates. It tracks location, conversations, token burn, Ramp spend, posting activity, investments. Marc just opens the app and draws a circle on the market map. That circle becomes the thesis. As associates approach the edge, the collar beeps and vibrates. With one tap, they can shift categories or algo-boost a founder. No direct management. More agentic. Huge cost savings for a16z. Already on 5k associates across the Bay Area, New York and LA. and now in talks to raise at a $5B valuation led by Peter Thiel.

@keith_johnson @raeforla We already do this, but you can only keep them in hospital beds until they aren’t in danger, then they’re right back on the street. By the way, this is partially why healthcare is so expensive— these people don’t have insurance but everyone gets the same care at the ICU

@JeffiniteVC @raeforla They need to scooped off the street & into medical care. Or we just shuffle them around & watch them perish eventually.

It's time we advocate for Angelenos after dark. As mayor, I'll create LA's first Office of Nightlife. We'll run buses until after last call. We'll mediate disputes between residents and venues so the cops stay out of it. We'll put naloxone in the hands of venue staff and protect people who call for help. Cities that treat nightlife as infrastructure see the returns: more jobs, safer streets, better quality of life for everyone 🌞 Join us at raeforla.com.

@sean_from_earth My gf said her critique was that ryan gosling didn’t feel as smart as the character in the book, and of course they had to make selective edits… but there were other aspects that played well on the different medium. I saw an advanced screening because Andy Weir is from Davis!

@JeffiniteVC That's good. I read the book a few times and loved it so I make it a rule to not see movies made from books I like because it screws up the imagined characters and world in my head. [but I'm a weirdo, so...]

Anyone who read the book knows this was inevitable. The book is scifi but it's really science porn and the fiction is just a delivery mechanism. People who go see movies do not go for the science, therefore it was obviously going to disappoint most who loved the book.

Guys, I’m not sure the IPO window is gonna open this year.

@MeghanKReynolds I’ll be ready to pick up the pieces once valuations meet public markets

Heard from LPs this week: The past 9 months have felt like groundhog’s day - a very small set of deals dominating all LP convos. The fever pitch to access rounds of OpenAI and Anthropic by LPs (and even GPs calling us) at times - has reached levels I’ve never seen in my career. And for good reason. Our rough math suggests that the VC investors’ gross profit on 3 LLMs currently equates to ~70% of ALL VC profits from the previous decade. “This time it’s different” mostly applies to the concentration - never has a tech super cycle declared such a small number of massive winners in such a short amount of time. The LP conversations are now shifting but we’re still on the same companies. LPs now preparing for IPOs and the LLM transition to public mkts - how to access at IPO, how the stocks will trade, liquidity dynamics, etc. 9 months from now will our convos still be focused on the same small group of companies??

@georgeminn51833 @raeforla Born and raised, you wrong on this one brother

@raeforla no one in LA says "angelenos". You are not one of us.

@keith_johnson @raeforla What do you propose

@raeforla hmm office of nightlife, first we need to fix the ongoing issues in our city. Perhaps an office of daylight

@Trace_Cohen Why does an LP invest in an emerging manager?

If a LP asks about DPI they either don’t know how VC works or are just looking for an excuse not to back an emerging manager.

@MollySOShea @nickshirleyy Yeah he does seem to share their diligence practices— just make shit up

BREAKING: a16z hires @nickshirleyy as newest Partner to diligence fraud in “high-growth” startups

@ColinGardiner This really is an incredible time, feels like we have more velocity than we did during the dot com boom but also wow, there are so many people not using this stuff

Literally every problem I create a solution for, they release a feature a week later.

@Samirkaji What’s an emerging manager to do?

I talk to thousands of LPs every year. Here's what I'm seeing right now when it comes to how they're approaching VC. 1) Late-stage co-investments have never been hotter. The top 5-7 names have effectively *unlimited* demand. And that supply/demand imbalance has created three real issues: First, the question of *true* access. Many of the SPVs floating around for these companies are not sanctioned by these companies. Buyer beware. These companies are tight on their cap tables, and access can be gated beyond just capacity. The fee creep is getting egregious. Someone shared with me recently that for a top AI lab, a group was charging 15% upfront, 20% carry, and 30% over a 2X. At those economics, you can take what would be a generational company but a bad investment. Fees are the silent killer of returns in late-stage co-invest, and this risk is now being focused on the logo, but ignoring the fee effects. Additionally, for those who aren't getting access to the top companies must go a tier (or two) below. Very dangerous in a high-intensity / valuation market for AI. As I've mentioned, there will be a lot of expensive mistakes made as we figure out what winners will look like in the future. 2) Capital is flowing to large, established brands. This is the clearest trend right now. LPs are concentrating on the top multi-stage and Series A firms. The logic is straightforward: these are easier to underwrite, and given how extreme the power law has become, investors want exposure to the trophy assets soon after investing. If you're a top 10-20 brand, you're oversubscribed, sometimes in multiples. If you're not, the fundraising environment is a different world. 3) Emerging and emerged managers are in the toughest spot, with a notable exception. Spinouts from top firms and operators with strong brands are moving fast and generally very oversubscribed. For everyone else, the bar has never been higher. I think this is actually where the opportunity is for LPs If they have the time/expertise to do so. The issue isn't that LPs don't know this. Most do. The problem is twofold: the time and difficulty of sourcing and diligencing emerging managers is real, and the hangover from 2019-2021 is still very present. A lot of people tried VC during that era who probably shouldn't have, and the failure rate on those Fund 1s has made the entire segment harder to navigate. Matching supply and demand here has become nearly impossible. Supply (Managers) far exceeds demand due to the issues noted.

The VC industry won’t admit this, but Lina Kahn is better at economics than they are. In fact, the economic illiteracy of the VC industry is almost certainly dragging aggregate returns. Valuation is an art and a science. For the last few years, VC Valuation has been neither of these things. Overpaying to win doesn’t always work when you’re also overpaying to lose.