VC is a discovery process: broad seed funding beats 'kingmaking', argue investors
garrytan · x · 2026-10-30
An opinion thread on how venture capital works:
- Core argument: VC is a discovery process of funding cheap experiments with huge upside. Nobody knows upfront what will work; failure rates are always high. Many startups get small seed checks and face similar constraints — weak ones fall away at low cost while the best founders keep raising, a kind of Darwinian capitalism.
- Implication: A broad and diverse base of seed investors benefits everyone. The belief that a particular firm can 'kingmake' a startup with capital or resources only masks weakness and distorts the process, raising the cost of failure and restricting entry. Capital should go to founders who earn it, not those anointed.
- Counterpoint: Ian Rountree agrees with the general 'be additional / fund oddities' framing but argues that assuming the first crop in a consensus space is necessarily the best is 'partially a mega-fund psyop' and often untrue.
More from Venture
- China could flood InP laser market next year, single vendor capacity cited at multiples of demand — jwt0625 · 2026-10-31
- Anthropic's API margins (~92%) top DeepSeek's (~84%) — subscriptions are deliberate loss leaders — bookwormengr · 2026-10-31
- Four companies post-train their own video models after MiniMax H3 goes open source — videorouter · 2026-10-31
- a16z podcast: AI lifts plaintiff law firms from 100 to 500 cases per attorney — a16z · 2026-10-31
- Figure paid people $15M to film chores, lifting robot zero-shot success in new homes from 9% to 56% — Scobleizer · 2026-10-31
- Theranos whistleblower Tyler Shultz warns AI boom is 'a great opportunity to go deceive people' — TechCrunch AI · 2026-10-31