VC Must Beat Public Markets by 1000bps: Menlo Partner on the Compute Tax
FinanceYF5 · x · 2026-10-06
Part 4 of the 20VC thread with Menlo Ventures partner Venky Ganesan: nearly every AI startup pays a compute and foundation-model 'tax' to Big Tech and clouds, and LPs can just buy those stocks without management fees or carry—so VC must outperform public markets by at least 1000 basis points to justify itself. He also argues the first crack in the AI wave won't be markdowns but leveraged debt defaults.
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