The groupthink boom: What the three biggest venture capitalists really think about the AI ​​frenzy

This week, I sat down with Niko Bonatsos of Verdict Capital, Andreas Stavropoulos of Threshold Ventures and Ben Blume of Atomico at the Stractly VC in Athens (which was part of the Panathsnea Festival in the city) to ask about the status of venture capital,SpaceX The big IPO waves that are about to rise, and the ocean where they see the future.

Our next conversation has been edited for length and clarity. You can view the full discussion at the bottom of the page.

It was reported that SpaceX ' s IPO was valued at $1.75 trillion, while OpenAI and Anthropic might not lag behind, and what would this have on the wider market?

Andreas Stavropoulos: I remember. Google IPO was so exciting, and how it reopened a very pessimistic market for technology in the early 2000s -- an event that led to a new generation of entrepreneurs. The same thing is happening now. With each subsequent wave paradigm shift, there will be a quantitative change in size, which can be expected. In today's information age, which industry is not technological?

Ben Bloom: These are extraordinary companies that, with each large-scale liquidity event, generate wealth and rewards and feed back to the next generation.

Niko Bonatsos: My co-founder in Verdict is now Cursor's first investor. So if Elon felt that he was doing well, maybe Cursor would have some good news. But more generally, as Andreas mentioned, for the next generation of companies, they may be looking for a larger market, and the founders of immigrants, as we know, have a very big dream, they have nothing to lose, they can go further, and Elon Mask himself is an immigrant founder. So, for us from Greece or other smaller markets, wow, you know, this is a good example.

Some argue that SpaceX valuations may absorb large amounts of open market capital to the detriment of companies that subsequently exit. Is that a real worry?

AS: You can choose to see most things as optimistic or pessimistic and offer good arguments for both. From a macro point of view, companies such as SpaceX would eventually attract more people to markets rather than absorb some of the short-term effects of liquidity. Over the past 30 years, consumer participation in the market has changed from something that does not exist to something that people trade on their phones every day. These figures add up.

BB: SpaceX is a unique company. Space has long been an area of government and the public sector. Provide real financial opportunities for investors — and I think this will inspire a broad imagination. It might be spiritually inspired by long-tail distributions, or else they could go into the next 20 or 30 software operations, but I think the interest it generates is not just compensation.

Is the current influx of artificial capital justified by future gains, or is this an extreme FOMO situation?

Note: If you're an AI original founder, or a company in the American Dynamics field, you can cross the fast lane. If you don't belong to one of these two categories, it's really hard. In Silicon Valley in 17 years, I've never seen so much group thinking. Three quarters of all venture capital raised last year went to five companies. Now, if you're a 40-year-old permanent professor at Stanford University, and you don't contribute to artificial intelligence, then nobody wants to see you.

In other words, something real is changing. The two founders of today's artificial intelligence tools can make more progress in two months through a round of financing than the progress made by 10 individuals a year ago, two rounds of financing and a whole year of work. This is changing the way companies start and become capitalized — with the possibility of moving directly from pre-seed period to round B financing.

AS: There will be an adjustment to remove some funds from the market. Commitment and optimism remain far ahead of the ability to show results in the short to medium term. But from a long-term, macro-level perspective, I do not think we are overly optimistic. The problem is that it should not be wrong to think that every 19-year-old with an idea will be the next big thing.

How do you actually price things when things move so fast?

BB: The best founders do not lack capital options. You have to consider what is a meaningful ownership interest for your fund and leave when you are unable to do so. Interestingly, we're a $500 million fund that looks for the same opportunities as those who invest $10 billion or $15 billion. A dollar is very different for us and their incremental value. This distorts the size of the round and makes the offer difficult to collide.

Note: We made our first investment — basically not friends and family, but angels. We invest in what I call “freaks” — a few people who break all records, like professional sports. The day passed, they learned, matured and made progress, and it took an entire week for ordinary wise founders to make progress. To date, most of the founders of our support have worked in unnamed markets — that is why the valuation is low. Larger asset management companies were unable to tell their teams to look for companies in markets that did not yet exist.

There has been much discussion about very young founders getting an investment offer almost on arrival. Can age really mean anything?

AS: In times of chaos, when the world seems to be changing in some fundamental way, it is particularly vulnerable to inexperience. Experience might actually lead you in the wrong direction. This does not mean that it will change forever — we are going through a period where things have not stabilized, which has created fertile ground for new ideas, usually young entrepreneurs. But I don't want to overstate.

Note: The same thing happened in 2009 when I came to Stanford as a graduate student at Stanford University. The iPhone was born two years ago, and AppStore was born one year ago, and sometimes there are more risk investors on campus than there are students. Today is one of those extraordinary moments. If you're 22 years old, in San Francisco, you're doing something with artificial intelligence, you might have a letter of intent to invest in seeds in your inbox. But if you're 19 years old, God, that means you're really good; you might have got the A series [offer]. See, at this point, age is relative... This week I spoke to a 24-year-old founder in Athens, and when I said he wasn't that young, I was serious: I met them at the age of 19 in Mercor and looked where they were now.

BB: If you try to sum up from age only, I think you'll miss what you really want: a high intensity, the ability to advance the pace of market development and the flexibility of thinking to adapt to changing circumstances. If you have these things, it's more important than the age of the passport.

How do you view suspicious behaviour around indicators - especially how companies report ARR (annualized regular income)?

BB: The definition of A, R and R is relatively free. New pricing models — billing based on tokens, free tokens counted as income — have created many ways of expressing these figures. As investors, it is our job to overcome this and to make decisions on the ground. From a marketing point of view, is that okay? Probably. Can it be decided which companies are funded? Nope. But experienced investors can usually break through.

Note: Sometimes I get an e-mail with very high ARR numbers from portfolio companies, and I don't remember doing well, so I contact the founder. What's the answer? Thanks to the success of an event, they earned 365 times more than the previous day. I told him, can we at least count on a quarterly basis? Every time a large amount of money is spent on a particular theme, some people have a sense of greed for short-term benefits.

In venture capital, bad investment will cost you only once, but the right investment will pay 100 times more -- so you can leave the bad investors and move on.

Where do you really see a blank now for the aspiring founders of the audience?

Note: In the past, at least half of each venture capital company ' s partners were engaged in consumer Internet investment. Today, perhaps half of them — they have completely left the field. But one of the best AI companies in the last few years, OpenAI, ChatGPT And it gets big. Consumers are returning, which is almost a mad saying. Today, these founders may have five investors who can market their first or second round of financing. I think there is a new movement that will help restore the American dream through a new concept of consumer finance technology.

BB: The opportunities for artificial intelligence to interact with the physical world are several orders of magnitude larger than we have seen so far in the automation of work processes and digital processes. The material world still shapes a large part of the economy. The bet on all forms of robotic technology — not just back-to-back human robots — remains one of the largest open spaces in the next decade.

If you're interested in knowing more about three people -- including whether Stanford has become too close to the venture capital industry -- you can see the full conversation below: