What Menlo has done over the last 24 months is exceptional. Yes, they did Anthropic’s round at $4BN that will make them $50BN+ as a firm. NICE! But they then took that and went f****** hard. They do Lovable, Higgsfield, Legora. They compounded the brand win of Anthropic to cement their position from respectfully a slightly ageing firm to being a dominant venture leader at the forefront with Thrive, a16z, Benchmark etc. It is incredible to see and I sat down with @venkyganesan to shoot the s*** on this. 1. Every Seed Investment Is an Option Bet Seed-stage deals function as financial options to discover true outlier potential before committing major capital. VCs must construct a broad enough portfolio to secure sufficient at-bats, only sizing up their position when quantifiable, revenue-based metrics prove an outlier has emerged. 2. What Is the First Sign of the AI Wave Cracking? Market cycles rarely collapse due to equity write-downs. They fracture when levered debt defaults occur. When market participants take on heavy leverage during an AI boom, precise timing becomes as critical as being directionally correct, making debt obligations the primary failure vector when cycles turn. 3. Why Every VC Must Now Prioritize IRR Every startup in the current landscape writes a structural tax to the Mag 7 and hyperscalers for compute and foundation models. Because LPs can buy index exposure to those same public tech giants without fees or carry, private VCs must generate outsized IRR performance, beating public markets by at least 1,000 basis points, to justify private capital allocation. 4. Why LPs Wanting Smaller Funds and Slower Deployment Is BS LPs cannot demand both smaller fund sizes and multi-year deployment paces in the middle of a generational platform shift. Because AI startups face immense capital requirements to scale compute, VC firms that refuse to deploy capital rapidly will watch competitors step in and capture the category winners. 5. The Theory of Reflexivity and How It's Causing Markups Reflexivity creates self-reinforcing loops where fast revenue growth triggers rapid valuation markups, attracting elite human and financial capital that further accelerates growth. However, when copycat investors chase markups for momentum rather than underlying fundamentals, reflexive valuation bubbles inflate until market realities force an inevitable correction. 6. Sometimes You Pay Up Because You Have Unique Insight Premium entry prices are not always the result of irrational bidding. They often stem from an investor's ability to recognize a fundamentally larger total addressable market than the consensus. When a VC possesses unique conviction around an expanding market opportunity, paying above current rates reflects calculated foresight rather than price-taking behavior. 7. There's No Limit to What a Person Can Do as Long as They Don't Care Who Gets the Credit Personal ego remains one of the most expensive liabilities in venture capital and company building. True long-term success requires setting aside individual notoriety, focusing ruthlessly on generating LP returns, and empowering teammates and founders without worrying about who receives the public credit. (links in comments)

The biggest news in tech this week: - Anthropic IPO: Help or hurt the ecosystem? - Cognition raises $1B at $26B - Uber puts “$1,500 budget” on tokens - Kirkland & Ellis Spend $500M to Build Own Legora/Harvey I sat down with @jasonlk and @rodriscoll to discuss everything that happened this week and condensed my notes below: 1. The Global Cash Grab Has Begun Boards and founders are waking up to the staggering capital required to win the AI infrastructure war. Timelines are accelerating massively across both private and public markets as companies scramble for runway. The smartest players are aggressively front-running the queue to lock down massive balance sheets while the capital window is wide open. 2. The Realignment of Venture Scale Hyper-growth AI frontrunners have completely shattered traditional expectations of company scale. Investors are aggressively filtering out smaller, capped markets that fail to move the needle for a fund. To get a top-tier VC excited today, you must prove a path toward an exceptionally large, concentrated position size. 3. The Death of the "Stay Private Forever" Myth The era of hiding behind private valuations to protect an unverified narrative is completely over. The largest AI players are rushing toward public listings to secure massive tranches of capital. When your financials are stripped bare, the artificial mystery evaporates and transparent execution takes over. 4. Software is No Longer a CapEx-Light Game The foundational unit economics of the world's most profitable giants are fundamentally breaking. Historically light, cash-generating software machines are transforming into capital-intensive operations that eat billions for data center buildouts. This massive infrastructure burden will compress margins over the medium term. 5. Tokens Are Eating Seat Licenses for Breakfast Enterprise software budgets have entered a brutal, zero-sum fracture. Organizations are aggressively slashing classic human per-seat software licenses to free up cash for soaring compute and inference costs. If your platform doesn't power automated, agentic systems, your budget line item is an immediate target. 6. Compute Budgets Will Replace Humans Elite engineering talent will walk out the door before they tolerate being forced onto subpar AI models due to cost containment. Consequently, tech leaders are making rigid workforce trade-offs. Leaders are actively shrinking supportive roles and QA departments to hand their best developers unlimited compute power. (links below)