a16z: Tech Buyouts Are Structurally Broken While Venture Wins the AI Wave
a16z Newsletter · rss · 2026-11-04
a16z's newsletter argues tech buyouts face a structural crisis as the AI wave upends predictable business models. US buyouts returned 14.5%/year over the past decade (underperforming the Russell 3000) while venture did 17.6% unlevered; top-5% venture funds hit 5.3x DPI vs 3.5x for buyouts. The 2021–22 vintages are worst hit—70% of debt foreclosed in 2025–26 came from those deals—and Thoma Bravo handed Medallia to lenders, wiping out $5.1B of equity. Venture marked holdings up 16% in H1 2026 while buyouts marked down 4%.
More from AGI Musings
- Does more model intelligence still matter for coding past a threshold? — the_juan_1 · 2026-11-05
- Oxford physicist's 9-tweet thread: is a theoretical physics PhD still worth it in the AI era? — _lewtun · 2026-11-05
- Support for pausing AI jumps from 33% to 46% in eight months, overtaking regulation — DavidSKrueger · 2026-11-05
- AI is tackling longer research tasks, but scientific taste remains the hard part — nathanbenaich · 2026-11-05
- Gary Marcus reviews 2025 AI predictions: 17/18 correct on scaling hitting a wall — GaryMarcus · 2026-11-04
- DeepSeek's Liang Wenfeng on why open source is survival, not charity, in the AI era — teortaxesTex · 2026-11-04