What do top venture capitalists really think off the record?
Here at Newcomer we’ve established an unusual level of trust with venture capitalists — we’re skeptical enough to write truthfully about the startup industry and savvy enough to really listen to what smart investors are saying.
So we got together 25 of the VCs we respect the most — investors who aren’t afraid to say what they think (anonymously) — and interviewed them systematically about the top questions of the day. These investors include multiple current and former Midas List members, well-respected emerging managers, and other top general partners. Collectively they represent firms that manage more than $100 billion in AUM.
We’re excited to share the fruits of those conversations in the form of Newcomer’s VC Sentiment Report.
This edition is the first in what will be a quarterly series, combining quantitative and qualitative information to measure both current sentiment and (eventually) how it’s trending over time.
You’ll need to be a paying Newcomer subscriber to read the report.
We will be interviewing this same group for the next three quarters. Their identities will remain confidential so that they can speak freely.
We spoke with each participant live over video chat for 30 to 45 minutes and collected 344 individual quotes for the report.
Newcomer’s VC Sentiment Report is available via a special website, which paying subscribers can access here. (If you’re a paying Newcomer subscriber and have problems accessing the report, please email newcomer@newcomer.co.)
This first edition visits a number of hot topics, ranging from the odds of a bubble-bursting moment to assessments of which companies have a shot at being the next “generational startup.” We talked about which rounds were most competitive, which subsectors are hot or not, and what people are thinking about issues such as the accelerating trend of dual-valuation funding rounds.
You’ll find answers to the following questions:
Compared with the previous quarter, how aggressively are you currently deploying capital?
Compared with the previous quarter, how is your interest in defense tech changing?
Compared with the previous quarter, how is your interest in AI applications changing?
Compared with the previous quarter, how is your interest in AI infrastructure changing?
Compared with the previous quarter, how is your interest in AI labs & foundation models changing?
Compared with the previous quarter, how is your interest in fintech changing?
Compared with the previous quarter, how is your interest in healthtech changing?
Are there any verticals not asked about that you’re increasingly interested in?
Which of the following best characterizes your view of the current state of the venture economy?
What do you think are the chances that AI-related valuations (public & private) will be down by 25% or more 12 months from now?
What was the most competitive early-stage round over the past 3 months?
What was the most competitive late-stage round over the past 3 months?
What would you do with shares in OpenAI?
What would you do with shares in Anthropic?
What would you do with shares in Stripe?
What seed to Series B company are you most bullish about being the next generational startup?
What percentage of startups backed by top VCs do you think are meaningfully misrepresenting their financials to investors?
If you could be an investor in any multi-stage private markets firm besides your own based on their investments in the last 12 months, who would it be?
If you could invest in any venture fund started in the last 5 years, what would it be?
What is the most overpriced startup that has raised money in the last 12 months?
What is the most underpriced startup that has raised money in the last 12 months?
What are you seeing and how do you feel about dual-valuation / tranched rounds?
If you could tell a new college grad to go into any profession today, what would it be?
What’s a story we should be chasing right now?
Here’s a snippet that gives an idea of what you’ll find in the report:
Investors are bullish on AI infrastructure startups but have soured on new foundation model companies beyond the big labs.
Responses to each question are accompanied by a number of quotes. There are 13 for this bit; here are a few:
“They are all small variants on the transformer. They’re not reinventions. I would be very interested if I saw something that is a new architecture.”
“There’s no entry price of, like, 100M-post. You’re looking at entry prices in the billions. It's just nuts. It's nutty. And so if you're going to do those deals, you better be right.”
“I compare them in some way to social gaming companies. Zynga was only as good as the next FarmVille. The same goes for these model vendors. They’re only as good as their next model.”
We hope you’ll check out the full report and let us know what you think. We’d very much welcome your feedback as we develop this new project and build it into a long-term resource.
Thank you!
Eric, Adanma, Riley, Madeline & Jonathan
> “They are all small variants on the transformer. They’re not reinventions. I would be very interested if I saw something that is a new architecture.”
Jev: “This isn’t even my final form.”