[Note: I know what the world desperately needed in 2026 was another newsletter from a venture capitalist, so here you go. ;-) Unfortunately, email remains undefeated when it comes to sharing thoughts with people you think highly of to find out what they think. If you are on this initial distribution list you are one of those people to me - and I am hoping you will hit reply and let me know.]
Everyone knows that the way companies get funded has changed dramatically. That was true before AI entered the chat, and it’s only become more obvious since. There’s just so much more money available to founders now — earlier, faster, and at a lower apparent cost.
What’s less clear is that many founders are still using old mental models to interpret what being able to raise money actually means.
Interpreting a fundraise today the way you would have in the early 90s is a bit like expecting companies to start going public again after four or five years. The world that made that a sensible expectation just isn’t the world we’re in anymore.
When capital was scarce, being able to raise really did mean something. It didn’t guarantee you were right, or that you’d win, but it strongly suggested that your idea was worth the concentrated investment of your opportunity cost to find out. When a venture capitalist could only make one new investment a year, it was reasonable to take that decision seriously.
In that environment, founders could outsource a meaningful part of their conviction formation. Starting a company is a wildly concentrated investment in the most volatile asset class there is. Doing that completely is often outside a founder’s prior experience. VCs were the ones whose job it was to think through the rest of the equation. Not just the vision, but the odds, the sequencing, the capital markets, and the failure modes. That’s also why diligence used to take months. Someone was actually doing the work to reasonably figure that out.
Then capital stopped being scarce.
The cost of investing dropped dramatically. Capital could be deployed quickly, repeatedly, and across many more companies. At the same time, everyone wanted to scale. Waiting for returns to sort out who was doing a good job took too long, so activity itself became the proxy. Deploying capital into acceptable-looking opportunities started to count as success.
Over time, especially at the earliest stages, the signal faded. Being able to raise money no longer carried the same informational weight. But many founders haven’t really updated their priors. And to be fair, expecting them to update their priors without being explicit about the change is a bit unreasonable - they are not experts in the capital markets.
Founders are already doing the hardest part of the work: forming a view about where the world might be in 10 or 15 years, deciding what to build to make that world real, and then figuring out how to actually do it. That’s the core creative act. While it’s necessary, it’s not sufficient.
There are other questions embedded in the decision to start a company that matter if you are going to carefully weigh investing a decade of your life into one thing. How many genuinely novel assumptions does this rely on? What will it cost to prove those assumptions right or wrong? How does value accrue along the way? What is the ultimate payoff if things work? How do you unlock talent and capital at each stage?
These aren’t always the most inspiring questions, but they’re critical for making a smart bet. And for a long time, they were exactly the part of the work founders could reasonably lean on venture capital for.
So what? At a minimum, founders should double-check the work if they are going to take signal from being able to raise. But personally, I think it should change some of the real work for a founder before pressing go - and it creates a need for VCs who value their money almost as highly as founders have to value their time.