Short Kings' Pro Rata

Tue, Oct 13 · 10:15am ET Other

Sent with Beehiiv Sends about 1 a week All facts

Brex discusses the current state of venture capital, highlighting the shift of smaller firms like USV and Benchmark raising large new funds to compete. The company notes the opportunities and challenges in the current market, where smaller VC firms face competition from larger funds. Brex shares its perspective on the role of smaller VC firms in this bubbly market.

What the raw message shows

From the headers

Sent with: Beehiiv See it in the headers

Across Brex's email

Sends: About 1 a week
DMARC: Enforced, reject
Mail failing authentication is refused.

The copy

574 words · about 2 min to read · 1 button

Short Kings' Pro Rata

Button Shai Goldman

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.

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

The words as text: what a screen reader can follow, and all there is when images don't load.

What the headers say

Read from the message's own headers, as it arrived.

Came from

o169.ptr1700.mail.beehiiv.com · 159.183.140.201

Beehiiv's sending servers

SPF

Pass for em7163.startups.brex.com

DKIM

Pass signed by startups.brex.com

DMARC

Pass for startups.brex.com

Policy: reject

Unsubscribe

One-click

Meets the Gmail and Yahoo rule for bulk senders.

Complaints

Feedback loop set up

Mailbox providers can report spam complaints straight back to the sender.

Show all 26 headers

As received, minus the delivery side: the archive's own addresses show as [recipient], its mail servers as [receiver], signatures are left out and unsubscribe links trimmed to their host.

Route

Received: from o169.ptr1700.mail.beehiiv.com (159.183.140.201) by [receiver] (cloudflare) id NMxSKwW6Zfko for <[recipient]>; Tue, 13 Oct 2026 14:15:03 +0000
Received: by recvd-b4fff8755-wvp5j with SMTP id recvd-b4fff8755-wvp5j-1-6ACE3CE1-B 2026-10-13 14:14:57.086428738 +0000 UTC m=+1199679.065377495
Received: from MzAwNjE3MTk (unknown) by geopod-ismtpd-43 (SG) with HTTP id vySrJj6jRMSdxpJNGrXEzw Tue, 13 Oct 2026 14:14:56.990 +0000 (UTC)

Authentication

Received-SPF Authentication result: pass ([receiver]: domain of [recipient]@em7163.startups.brex.com designates 159.183.140.201 as permitted sender) receiver=[receiver]; client-ip=159.183.140.201; envelope-from="[recipient]@em7163.startups.brex.com"; helo=o169.ptr1700.mail.beehiiv.com;
Authentication-Results Authentication result: [receiver]; dkim=pass header.d=startups.brex.com header.s=d69 header.b=KZiuoUNC; dmarc=pass header.from=startups.brex.com policy.dmarc=reject; spf=none ([receiver]: no SPF records found for [email protected]) smtp.helo=o169.ptr1700.mail.beehiiv.com; spf=pass ([receiver]: domain of [recipient]@em7163.startups.brex.com designates 159.183.140.201 as permitted sender) smtp.mailfrom=[recipient]@em7163.startups.brex.com; arc=none smtp.remote-ip=159.183.140.201

Platform

x-beehiiv-ids Identifies Beehiiv: {"account_name":"https://brex.beehiiv.com/","campaign_id":"2f8d8a11-2361-4451-8969-f6bfe8b2a5c0","category":"newsletter","email_generated_at":1791900896,"user_id":"d018fe98-bbc5-4851-9f26-226615931cc0"}
x-beehiiv-type Identifies Beehiiv: newsletter
x-list-id: d018fe98-bbc5-4851-9f26-226615931cc0
x-list-owner: <mailto:[email protected]>
x-newsletter: https://brex.beehiiv.com/p/short-kings-pro-rata
x-newsletter-id: https://brex.beehiiv.com/
x-newsletter-signup: https://brex.beehiiv.com/subscribe
X-SG-EID: u001.XralTnlLt9850FgwCY5MUha2MfBXLEFzWK0p4Lt6mdgnYJk9wZJNtcQsaY/k/uAoVt7Li7IS5JqnZj+eoPpvXtmEcQRGR7twM+BRoCCksjBM5bU6m0dBwoIXEpTGeb+4tj1w3fzIoT87m0cnV7nZd/j/vuIoQiI6JumhEVHF4yz+grOwrqaIEEixP3A4MLk64sX0Z+5wXVj6uk+Fke1R9S+CRH7K6HlrNTqAReI/enKNZaGqJfzEs8T5NIyN6b2aEAznKq8oexLY94uW/PPsjQ==
X-SG-ID: u001.SdBcvi+Evd/bQef8eZF3BpTL9BgbK5wfSJMJGMsmprD1ZcmFObA4po1bGaUE6gycqp/XEvdPDlQW9TeUnnIf5sKb+8S28J+cS++cxh3NvCQrbayMFcwSc5gbIi0z1c8IJeDxWgyZ2X14nE/AsUTsiWdnaAJkqZxUwq84b+liE16MXx1e+toYAKApIaUWxMDsrxq7V0RIwWoI5f5NBuPtmKcqYCC21QslRIbRh4zYOXIctoqdB+MxCUlOsP1SHby+xfmH6G3pnjTX4xj6SohSpSR48YCPYxCVr8zqiVGVWRcvJNYt3HVDUM7kyMP1yyYxwYHhGVJMrGIDIr+wQqYguDT87T4hlc6yeiVm+zrDOzY4LG8nCgbeo44oX4nj9KKQv+N+cVN0QCAPLQq+bCopltENdrpJmmWPTxdqJ3jD6e26RpEY7JtCkotob8qHGFsaycS0ro3TJxTwM0qnkq5AkYeC+C4TDOmVI/VxnUiu6x0=
X-Entity-ID: u001.O0zys6bYiGbDCHs5vcSeig==

Unsubscribe and feedback

Feedback-ID: 2f8d8a11-2361-4451-8969-f6bfe8b2a5c0:newsletter:d018fe98-bbc5-4851-9f26-226615931cc0:22436afcadb0a22
List-Unsubscribe: <mailto:…@unsub.beehiiv.com>, <https://brex.beehiiv.com/…>
List-Unsubscribe-Post: List-Unsubscribe=One-Click

Message

Content-Type: multipart/alternative; boundary=e31d138ad3806086492eba31e8d1a8472f0d39e69563ab085359bdc6f122
Date: Tue, 13 Oct 2026 14:15:02 +0000 (UTC)
From: Shai Goldman <[email protected]>
Mime-Version: 1.0
Message-ID: <vySrJj6jRMSdxpJNGrXEzw@geopod-ismtpd-43>
Subject: Short Kings' Pro Rata
Reply-To: "Startups @ Brex" <[email protected]>
sId: d018fe98-bbc5-4851-9f26-226615931cc0

More from Brex

All 6 emails

Brex

Jev, Firecrawl & the $1B rev club

Tue, Sep 29 · 12:00pm ET

Brex

RIP closed models ?

Tue, Sep 22 · 8:58am ET

Brex

SF vibez

Tue, Sep 15 · 10:47am ET

Brex

Insane 2026 so far, AGI has arrived

Tue, Sep 8 · 9:01am ET

Archived for reference and commentary. Brex, its logos and content are the property of their respective owners; Inbox Archive claims no affiliation and has disabled all links. If you own this content and would like it removed, get in touch.