Happy Tuesday, Brex Community! | A lot of great VC related content and topics that past few days, you have to be on X to be on top of the industry! | First, there was an interesting essay called The Death of Venture Capital’s Short Kings , primarily highlighting two specific firms, USV and Benchmark, who consistently preached how they would stay small, but things are changing as they have raised large new funds. USV did respond to the essay. | My two cents: we are living through the most exciting technology wave of my lifetime, more so than the launch of the internet (mid 90’s), cloud (mid-late 2000), mobile (early 2010s) and at the same time it is also very bubbly. The opportunities are massive as we have seen the largest VC backed exit of all time with Cursor being acquired xAI for $60B and also the largest IPO of all time with SpaceX raising $75B and a pending massive exit ($2T? valuation) for Anthropic, IF they get out this year. All the large multi-stage VCs are raising massive funds and some of the smaller funds (like USV & Benchmark) need more capital to compete and back the best companies through multiple rounds. | There is a question of how the smaller VC firms, which many still practice the art of artisanal venture capital , have a role to play in this current bubbly market. While smaller funds do have an easier time generating great cash multiples for their LPs, they still need to have a seat at the table to be in the game and also need to be able to maintain or increase their ownership in their best companies, as this game is about backing the outliers. The seat at the table and ownership needs for smaller funds are being challenged by the larger funds, who can lead EVERY round, from accelerator to pre IPO. Related to this, there was a lot of drama between Valar Atomics and Day One Ventures related to maintaining ownership via pro rata rata rights. Day One Ventures did respond. Make your own judgement on the scenario, the truth might be somewhere in the middle. | If you distill this drama, I see it this way (I don’t have a dog in this fight fwiw). Day One Ventures likely sees Valar Atomics as an outlier portfolio company, which is where you want to maintain or increase ownership in. If you want to generate real DPI and provide great cash returns to your LPs and have the ability to raise your next fund, you have to have meaningful ownership in the the BEST company in your portfolio. If you look at the best performing VC funds of all time, there is usually ONE company in the entire portfolio that is generating the massive returns, you do not want to miss that one! Regardless, this saga kicked off a lot of interesting points of view on the role of pro rata and the balance between your legal rights, what is “founder friendly” and what is ultimately best for the company long term. | Have a great week. | Shai Goldman | | Events you might see us at - subscribe here - all focused on Founders, VCs & Finance leaders: | Oct 13 - LA - Brex Supper Club - open to VC backed Founders - Apply Here | Oct 14 - LA - Puppy Yoga - open to VC backed Founders - Apply Here | Oct 15 - NYC - Brex Supper Club - open to VC backed Founders who are building GTM AI products and/or highly leveraging AI for their GTM motions - Apply Here | Torrisi buyout iykyk 👀 🥃 🍝 - NYC | | | | Sign up here for Brex and receive $1,250 towards Brex Travel or $750 cash | Brex is the intelligent finance platform built for speed and control. Combining corporate cards, banking, treasury, expense management, bill pay, travel, and accounting, Brex helps companies spend smarter and move faster in 120 countries. By integrating AI across every workflow, Brex enables founders and finance teams to eliminate manual work, do more with less, and accelerate impact. More than 35,000 companies from startups to enterprises run on Brex, including Anthropic, OpenAI, Cursor, Granola, ServiceTitan, Robinhood, DoorDash, etc. | | |
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