Harry Stebbings@HarryStebbings5d ago

Pricing in venture is wilder than ever. $100M pre-seed is now normal. Bessemer just raised $1.75BN for “early” and $4BN for growth. So can you even do seed today without $1BN? - Is capital truly one of the last remaining moats? - Do all small seed funds and mid-sized firms just fade into irrelevance? - Does entry price matter anymore when there are $TRN companies… - Is this real or a bubble that is about to burst I sat down with @spdholakia to discuss this and have added my notes from the discussion below. 1. This Is a Supercycle Like Never Before Sameer has spent 31 years in software and has felt magic only a handful of times. A trillion-dollar supercycle followed every one of those moments, and he notes that it does not happen very often. What is different and what is similar to prior cycles @altcap @infoarbitrage 2. Capital Is a Moat Today Markets pick winners and the choice becomes a self-fulfilling prophecy, as it did when developers settled on SendGrid and Twilio. In legal AI, big law firms name just two major providers. Capital lets leaders scale at an extraordinary pace and build a brand, which draws talent and customers in a reinforcing flywheel. Do you agree with this @venkyganesan @dafrankel 3. Who Wins and Who Loses in the Future of Venture Capital? As industries professionalize, firms must be either a giant global platform that consolidates or an extreme specialist, such as an early-stage AI investor in San Francisco. Sameer counts Bessemer as a big global platform. Firms caught in between face a hard world to make money. Is it go big or go home @rodriscoll @rabois @chetanp 4. The Rationale for Why Anthropic Would Compete With the Hyperscalers and Why We Invested As in the cloud era, AI would be massively capital intensive, so it would consolidate to a handful of players with hundreds of apps on top. Microsoft had partnered with OpenAI and Google was building Gemini, while AWS had an undistinctive internal model and had just invested heavily in Anthropic. 5. Why Price Does Not Matter in a World of AI and the Metric That Truly Determines Value Bessemer invested in Abridge at $5M of ARR for a $700M to $800M valuation, in Anthropic at roughly 150 times current ARR, and led Legora's $1.8B round at $20M of ARR. Sameer judges these deals on what the company can become in the next twelve months. How has your relationship to price changed in a world of AI @mignano @mmurph 6. Why the Rise of Open Models Does Not Denigrate the Market for Closed Models In a market this large, predicting the mix between closed and open tokens with any precision is irrelevant. Consumers, enterprises and governments will all want different flavors of intelligence. Bessemer has invested in both Anthropic and Fireworks to hold exposure to closed and open tokens. Love to hear how you think about this @lqiao @bernhardsson 7. Why It Is a Permanent Structural Shift That Companies Will Stay Private for Longer, but Why It Will Open in 2028 With more dollars and more firms in private venture, companies will stay private longer, and most of the run-up in this boom will happen in private markets. Sameer still expects an unlock in IPOs later next year and in 2028. Love to hear your thoughts on this @bgurley and how you see it evolving in 24 months? (links in comments)