What the Data Actually Says About Venture in 2025

Founders should have full toolboxes to pull tools from. Sometimes you need a plier, sometimes you need a wrench, sometimes you need a level. I think the consensus is just meaning that you get a bunch of hammers with different colored handles. Those colors are the content marketing all telling you why they're better than somebody else. The expression to belabor it to a hammer, everything's a nail. And so I think you're getting very generic investing, generic servicing generic standardized playbooks, what growing companies look like. And that's uninteresting, unappealing and ultimately I think maybe even depress the range of companies and outcomes and ultimately, ultimately drive venture returns to a lower multiple risk adjusted set and forget type of strategy. And I think that's uninteresting when you want to sort of think about where does real alpha come from.

It's the week of December 15th. Welcome to the Learning Corner, a Precursor Ventures podcast. Welcome to the Learning Corner by Precursor. I'm Mia Farnam and I'm joined by a course our GP and managing partner Charles Hudson. But we also have the privilege of hosting our first guest on the podcast and we really couldn't have lucked out with a better set of guinea pigs here. We've got Peter Walker, Head of Insights at Carta. So if you've ever seen a graphic across LinkedIn or swapped between your founder VC network with thousands of likes and comments, it's likely been created by Peter. So we've featured so much of the incredible work that your team has done on the podcast, so we are beyond excited to have you here. Welcome.

Welcome.

And we also have another Learning Corner feature leaderboard member Hunter walk with us as well. Hunter is a partner and co founder of the Early Stage Fund Homebrew based in San Francisco. He is also the co founder of the fund of funds Screen Door, focused on emerging managers which we've spoken so highly of here. Glad to also have you here Hunter.

You know, as I always said, I'll promote any episode that you feature any of my writing. I have to think of a new level of promotion. I'm actually have to like do some paid some paid work on this one.

Oh well, since this is the last episode of 2025, we couldn't think of a better way to wrap up the year than to change the format slightly and just dive into some of the largest themes from the past 12 months that everyone here has either felt seen or written about publicly. And and doing this with friends just felt like the best way to close out the year. So without further Ado, let's start it off with the number one valuations in today's market. It's no secret that we've talked about valuations in nearly every single podcast episode this year. Between the rapid inflation of pricing and many AI deals and the open question of how anyone is underwriting risk right now, it almost feels like founders tell us they're aiming at an arbitrary number when raising their first institutional round. Peter, I'm going to start with you. You've shared so many data insights this year, breaking down early stage valuation trends. One graphic that really stood out recently was around the point that most funding rounds rarely make headlines, but the ones that do tend to sit at the very, very top of the valuation range. You included a graph showing post Money valuation benchmarks for AIC startups by location in 2025, highlighting that the quote zone of attention on social and press is concentrated on roughly the top 25% of Bay Area valuations and the top 10% in other GEOs. So any additional thoughts, Peter, on this and how it's impacted the broader landscape?

Yeah, well, in this digital friendsgiving that we're have, I think that the valuation question, I've heard it on your pod, I've heard it on a lot of podcasts over the past year, and I think maybe this is a slightly controversial take. I think it's kind of overdone. People get valuations that can in some ways, when I'm talking to founders and they're looking at these charts and they're feeling candidly, sometimes really bad about their startup or their idea because they're looking at the media and going, oh my God, I didn't raise $2 billion at a 12 billion valuation. Woe is my seed round. It's a function of who you are and what you come into this with. So every single one of these, it's not like the range is available to everyone. And it's just how well did you negotiate? Many parts of this rang are not available to most founders. And so in that sense, I think, you know, comparison is the thief of joy a lot of times here because it's not as though these were possible and you just messed up. These were never possible for your startup in many ways. And maybe last note, and Hunter and Charles have been on this a lot. It's not as though the valuation that you get at your seed stage is an actual reflection of what's going on in the business. That's not. That's not how these things work.

We always tell founders that in general, it's more important not to make stupid mistakes when you're fundraising than it is to worry about what an A minus versus an A looks like. And that so long as you're accomplishing the majority of your goals, which is to as best you can, raise the amount of money that will get you from, you know, sort of hilltop to hilltop way that sort of sets you up to if you do what you think you will be able to do, you will then be able to raise money at a 2, 3, 4x step up the next point. And maybe most importantly, the people that you've brought onto your cap table are neutral to positive additions to your company that just get it done and then go back to work and you accomplish everything you hope to do. You will ultimately end up in a similar place over time. Some rounds will be burden of proof and some rounds will be benefit of the doubt. Some rounds will be frothy and some rounds will be during periods of momentary disbelief. But the greatest way to sort of impact the success of your outcome and ultimately the financial outcome is to sort of accomplish what you set out to accomplish.

Yeah, I mean, Mia, you and I were talking about this in our 101 this morning. I'd find it interesting trying to explain the founders the inputs to valuation and sometimes I'll tell them, well, this person's in YC and like, well, why did they get a benefit for being in yc? I'm like, because they did. We could argue whether that's fair or appropriate, but like that's just the thing. Or why did that person get a bump? They're a repeat founder who knows a bunch of VCs. But why does that matter? Well, because that person's better at creating the FOMO dynamic that will get people excited. And so Peter, I think what you said is really important for people to hear, which is sometimes what's available to you is a function of like what you bring to the table. And I find oftentimes we have honest conversations with founders like, look, you're a first time founder who's been an individual contributor, never connected to the VC ecosystem. You're probably going to start off with a smaller round at a lower valuation and that's probably both okay and appropriate for you while you find your selects and the first round you raise is not the totality of the story of your company. And so I think it's funny, many of our best performing portfolio companies actually started off with fairly modest initial fundraises relative to whatever the pricing environment was at that time.

One thing that jumps out from the last, call it three or four years on, this is just how much more available all of this stuff is. And so, you know, when Brian Chesky and folks were raising seed rounds for Airbnb, it wasn't like every day they were waking up and reading exactly what the valuation ranges for seed stage rounds were. They just kind of raised the round. There's so much more information now that you can really get lost in some of the headlines and the data. And it kind of the feeling is so much stronger, especially in San Francisco. Whereas you hearken back eight, 10 years ago, very few people were even talking about it.

And look, also I remember one of my first, you know, so as probably the gray beard hints, like I've been around for a while. And I remember while I was still at my Google YouTube days, I made my first two sort of LP investments as sort of an individual. I had previously angel invested in companies and I had the great benefit, both sort of economically, but even more so from an information perspective of investing in an early SV angel fund, SV Angel 2 and the first 500 Startups fund, both of which have performed quite well. But almost more interestingly, it felt like for a period of time between those two funds, I probably had information on 50 plus percent of the startups that were in TechCrunch type of stuff. And you would see the headline on the round or the exit and then you'd see actually the flow of funds and you would realize that just like maybe the pictures you look at on Instagram look a little bit different when the filter is turned off, that there is a headline filter for what gets reported. These oversubscribed rounds of this and that. How did they raise $8 million? Well, they didn't. They raised four $2 million rounds over some period of time. The first three had very low valuations and so on and so forth. Like the truth does not get reported and you get enough of the data and the averages uninteresting. Because nobody wants to be the average startup. In fact, the average startup is probably not anybody we're meeting with. And so it's kind of, I think, as Peter and Charles are saying, sort of like explaining the contours of what occurs, but then disabusing people of the notion that the most important thing to do over the arc of the company is optimize the fundraises. That being said, we all believe, or at least folks on the investing side here believe that figuring out what a fair price to pay for a company is part of our job when we're investing and then helping them have successful fundraises, including not running out of capital, is our job at the other end. So we're certainly not like passive observers of the trends. We just have to understand, like, anything which games on the field you have to play versus you can sort of try to navigate through, steer around, or run your own playbook.

I mean, Peter, I was going to bring up some data that you had. I think people would be surprised to know that you published a great graphic that had startups raising both money safes before any price round between like 2024 and August of 2025. And it looked like almost half of these rounds had valuations lower than 10 million. I think that would be surprising for most founders to hear. One question to everyone in the room, if you told a founder that metric, do you think it would change their perspective, or do you think they'd still believe I'm in that other cohort that deserves the hire? I think it was, what, 0.8% of rounds get that $100 million valuation. But I think everyone in Silicon Valley probably feels like I'm surrounded by the four that got them.

I think that sort of like saying 0.8% of people who are actors become movie stars. It's like, I don't know about the other 99.2% because they're local theater in Peoria, you know, so your waiters and.

Waitresses at the diner that you're getting served at. Peoria, man.

Yeah.

Not the same. I'm not an investor, but I think what most founders want, at the end of the day, at least when they talk to me, is they want me to tell them, am I getting screwed? And as long as that's not the case, they are generally okay. But there's also a cohort that are like, if I'm not in the top 10%, then I'm doing something wrong.

I think it's really hard when you're in San Francisco, if you moved here and you're not part of the pipelines that get you to the front of the list on vc, whether it's working at the right companies or going to schools that people know or living in the neighborhood with a bunch of, like, if you're not in those, I think it can be a very jarring experience because you're like, I had lunch with that guy, and that guy is just as smart as I am. I don't think he's or she is any better than I am. And they raised 10 on 40, and I raised 2 on 8. This doesn't make any sense. And I think it's sort of the opposite of the peer problem. You actually do know the person and you're like, I don't think this person is that much more special than I am. Why are they having this radically different? And I think, you know, I think most founders I meet assume that people raise the most amount of money available to them at the highest price possible. And so if you raise a small and we encounter this as a precede fund, people are like, is it going to look bad if I raise one on seven? I'm like, no, not if you turn that one on seven into something special, it's not going to look bad. But you have to understand that like, if you go to whatever the sober, curious version of a cocktail party is and tell your friends that like you raise the small rounds or low valuation, you're probably not going to get the biggest high five. And I don't know, I like, we at pretty good tend to work with people who are like, okay with that. And they're like, I'd rather get in the game, I'd rather like get the money I need to get started. And it's not necessarily like a seed round beauty contest, but if I lived in a house with four YC founders and I raised that round, I might feel a different kind of way.

Yeah, I do think there's to be fair besides just sort of the comparative aspect. Like people do want to have, they want to make it a branding event. Right. And they want to get their team members excited or the people they've been recruiting. Well, the people they've been recruiting just missed out on a step up in valuation regardless. But you know, like, you want to be able to say this is another sign of other people believe in us. And, and, and I'm a good founder, I'm a good CEO. I ran a good process. What I kind of do, which no matter what the terms, I sort of have this thing. So I say, you know, they raise 5 million whatever post of whatever. Right. And I'm sort of like, you know what your company's actually worth today? $5 million. The cash you have in the bank, you know. Right. And then I'm like, actually probably 4,999,950 because you're picking up the lunch tab, you know. Right. It's like, let's have the moment where we sort of think about how the fundraise went. What did we learn from that? How does that help us next time out? And now let's go start using those dollars to create a multiple of value for each dollar we spend because that's actually what's going to eventually put wealth in your pocket, your team's pocket, hopefully my pocket as well.

And Hunter, before we move on to the next theme, I want to touch on something that you wrote recently. You wrote a great piece on why you no longer focus on startup valuations when deciding whether to invest. With the exception of.

Yes. On the other hand, everything we just talked about, who cares?

Well, you had an exception for four specific reasons. And one of the reasons that you brought up was will the next financing be made more difficult because of the pricing set now? I mean how do you even think about that today where the market shifts every month and differentiation and moat are somewhat undetermined completely for companies closing funding rounds today.

Yeah. So for quick context, we ran our fund the first decade as a traditional institutional seed fund. We raised three funds from outside investors with lead code lead seed rounds. Do 1 to 3 million of your first 0 to 5 invest 20, 25, 30, 35 companies over a period of years in that model. My particular belief is that at a deal by deal level, actually ownership matters, price doesn't. But at a portfolio level, price matters because I'm making decisions then on each investment of do I own enough of this that if it does well, it can perform the way I need it to in a power loss scenario to be impactful to my fund. But if I end up spending twice as much as I had modeled to get that ownership, that means I'm essentially deciding that I'm going to invest in one fewer companies that fund in order to go into this one. And so obviously over the course my average cost of entry for that ownership matters. In 2022 we switched to something we'd been thinking about for a while, which was a little bit of a personal capital evergreen structure. So we still want the same type of risk, the same type of outcomes. What we're essentially doing is using our own capital as opposed to outside capital. And we no longer have an ownership target because we're rarely leading co leading rounds. We're usually writing still precedency checks. And so my sort of cheeky kind of thing was I don't care about this anymore except for a bunch of reasons meant that like what I'm no longer doing is thinking about it as well. This is is this one, you know, sort of slug or two slugs of capital for a 30 company fund. And instead I'm looking at it more as what is this Process telling me, and what is the impact of this process on my interests? And so I said, look, valuation, in some ways now, I don't care if I have conviction, I don't want to be in the investment, I'm going to be in the investment. Except it does tell me a few things that do impact whether or not I want to eventually commit. The first is sort of like, what are the founders optimizing for? How are they going to run processes? How do they treat those people involved in the process? Did it feel good? Are these people that I'm going to want to be in business with? Second, like, did it produce the best possible cap table or just the best possible valuation or the shortest process? Whatever. People optimize for all different things, especially being, let's say, lines two through 10 on the seed cap table. Now, instead of line one, I care a lot who else is around me and who that lead is because they're going to have undue influence on the structure of that company, the advice they give the founders and so forth. And then the third thing is, I think, Mia, as you were pointing out, where does this leave them in terms of where they need to get to for the next round? You might hear the term like priced to perfection. Okay, great, they got the high valuation, but in order to make the next round as clean as possible, where do they now have to get for that to be a multiple of 2, 3 or 4 on where they just were. And I think of that as a multiple because frankly, that's sort of like the step up that you kind of want when you think about dilution, when you think about how much capital there probably is for the next round. And so if it's an interesting company, but with investors that I'm not sure are the most help and price for perfection, even though I hold sort of a small slug of preferred stock, I might as well be common stock, right? I need a clean outcome. I sort of think that my reality is if the team isn't going to make money, then I'm not going to make money. Right? And so I do care about that question of, okay, what do they need to accomplish and how did the valuation they take make it harder or easier to get to that next end? Milestones, to your point about moving goalposts, I think you can still sort of judge a little bit on best case scenario. If, like somebody mentioned before, you know, the number of companies that are at 100 million valuation for their seed rounds or something like that, you sort of have to know, well, if this was Raised on potential and tech demo. Is the next round going to be raised on tech scalability or is it actually going to be raised on first dollar of revenue? Is it going to be raised not on first dollar revenue but revenue run rate? What sort of things do they have to de risk and prove and are they set up to accomplish that? I think all these things are like products or systems that if you're not thinking through, well, great, I now just got around that's going to be on the, you know, tech meme, techcrunch, the envy of all my friends. But I have no idea how to use that money to get to my next round that potentially might not be a great investment even if it was a great fundraise.

I would just add one thing. This is one of the things I've learned from working with Hunter on Screen Door. Like we are a very entry price focused fund and I've had the chance to meet managers whose strategies are very different, who are very much like, I want to find the high momentum round, I want to find the high signal people. And I've learned that it's actually like a slightly different style of investing. And to Hunter's point, the inputs are weighted differently. Some of it is reputation, some of it is momentum, some of it is perception. And it's not all just error. The traditional things around like did you hit these milestones aren't as important as figuring out do these people who've managed to create interest around their company to a degree that's maybe impressive, do you think they can continue to keep people as interested in that company long enough to actually build the thing that justifies the interest in the first place? And I feel like I've had to learn how to think that way, particularly in this environment, because it really is a different. You're asking yourself a really fundamentally different set of questions about what's this company going to do with this money.

I like the idea that there are two, maybe even more, probably quite a bit more strategies that can work here. It seems as though in this world of attention seeking, it's very easy to say there is one right way to do this investing and there's clearly not. And so it gets back to the comparison point. You just don't have the ability to compare across investing strategies or across portfolio companies in the same way because they are trying to do different things. The only way you get messed up is when you are thinking you're doing one strategy, but you're acting as though you're doing another. And then you're kind of lost in the middle.

I think that's absolutely true. I tell everybody I'd rather have the best version of their own strategy than a bad carbon copy of somebody else's. That said, I think people especially either folks who are maybe first time VCs and or people who are at firms where they are sort of takers of that firm's strategy rather than makers of it in the sense of they're not the managed partner, they're joining something in motion. I think you do sometimes have to look and say is the playbook, match skill set, match the fund size, match the fund brand, so and so forth. Because if those don't all match up at least somewhat synchronously, best case scenario is you're sort of running a marathon with some ankle weights. Worst case is you're running in the wrong direction. You can't just decide and flip to being like I'm a momentum investor. Like I'm never going to be a pure momentum investor for all the reasons Charles said. Like I fall back to well what are we going to actually accomplish? Oh, that person's a great fundraiser for me is a sub bullet that gives them an outsized chance to try something that's really difficult rather than the reason to back them themselves. And I'm not a believer of oh yeah, well, you know, if you get in this you're signing up for three rounds of markups. Who knows how it's going to turn off but you'll get the mark ups and that will help you raise your next fund. I don't care about that. Oh, you'll sell. You'll. You'll have a chance to get out in a secondary. Well, maybe I don't invest because I'm hoping to trade out in 18 months before the the greater fool finds out type of stuff. And so I'm the optimist but I still fall back on like the yeah, but what are you actually going to build? Not. I'm so glad that somebody told you they already want to preempt the next round.

How cynical of you, Hunter. How dare you.

That's why I missed. Look, I missed. I have like, I have zero degen investments like personally or professionally because I, I missed the whole yolo. Who cares? Risk it all. This is fun. I thought that that was a momentary blip because of like Covid checks and it's amazing to me and scary to me on sort of everything from these prediction markets to the tokenization of private stocks to legalized gambling to leveraged options trading like whoa, this is a different. I mean this is different than, you know, this is different than the venture I grew up in.

There's a little get off my lawn sometimes.

Yeah.

When just a bunch of white guys and Indian guys could meet some people on Stanford's campus and name their price.

You know, we could keep on talking about that theme forever, it seems. But I do want to pivot a conversation because I do want to talk about exits, which we talk about in most podcast episodes from the Learning Corner.

You mean GP is exiting their firms.

Might see lots of.

I know we can take this in a whole different direction, Hunter. I mean this conversation has shaped the broader perspectives around Venture as an attractive asset class altogether. And it has created a lot of talk and chatter around what truly is in control of the GP and fund manager. So secondaries. Hunter, what you mentioned earlier and what still remains to be a feature of Venture altogether in almost like a bright spot, Peter, you shared a graph titled quote Startup M and A is really hot right now that showed around 3,200 startups acquired in the US from 2020 through 2025 and about 50% of those deals they happened in the pre seed or seed stage with about 25 to 30% of those occurring at Series A. Obviously not everyone who gets acquired are able to repay the folks on the cap table. A lot of things you don't see in the media when these announcements come out. But any other interesting data points about these exits that jumped out to you over the last couple of years? Peter and then under and Charles, I have a series of questions for you also.

I think it's just. It's sort of a picture of what always happens in startup exits, only more so. Which is most exits are not great exits. Most exits are for companies that are tiny and the team is getting purchased or maybe a feature like it isn't as though a lot of the exits that we talk about are a whiz getting the amazing exit that they had to Google. The other thing to note though is like some of this is starting to get pretty real on the AI side. There were more Series B exits this year than the last three or four. So it's not like these things don't exist. I think the M and A opportunity is quite real right now. What is difficult to figure out and these two would have better answers than me on this is like. Like how much of this is because they had to. How much of this is because they were overwhelmed by a fantastic offer. Then how much of this is actually FOMO from the buyer Side saying we are in an AI wave and we don't know how to do it internally. So let's some, let's bolt on some AI stuff from somebody else. And those, those kind of, there's buckets of all these kinds of acquisitions happening and they kind of get rolled up into1.

Number one byproduct of this yawning disparity of like fundraising scenarios is I found more founders kind of four years in, they've got a seed round, they're thinking about the A, they're looking at anthropic OpenAI databricks. They're like, we're not that. And we're probably not on track to be that. Should we try to get on that track? Should we grind it out profitably or should we explore M and A? And the nice thing is usually these companies have preference stacks that are like in the 3 to 5 million dollars range. So there is a universe in which the company could get acquired. Investors could either get back a good chunk of their invested capital or stock in an interesting company. The founders will get jobs. I put this in our, actually in our ATM deck that I've been spending more time with companies in our portfolio that are in the sort of 26th to 50th percentile, the ones in the very bottom. It's very hard to transact. But these are companies I'm like, look, if we were thoughtful about who we know well, who might be interested in our technology and team, you can generally, if you give yourself enough time, you can find an outcome of some sort. And in some ways this kind of reminds me of like it's not quite as good as the aqua Hire days of mobile where Yahoo bought everybody. It felt like, I think there's appetite on the side of medium to large size tech companies to acquire teams and tech that they think can be more usefully deployed in their environment. I think this sort of M and A environment, even for the big companies feels a little bit more accommodating for them. Maybe not to do like mega deals, maybe not to do the Adobe Figma type stuff, but for smaller deals. But I think the hardest thing as an investor is convincing a founder that this is a path you should go out. And I've concluded you can't actually convince them. All you can do is create the conditions where the founder can choose to walk through that door. One of LPs like, well, why don't you sell more of these companies? I'm like, well, they're not my companies. I don't run them. I'M a minority investor in these companies. I'm not even on the board if the founders want to have that conversation. My job is to like create the conditions where it can happen without them feeling like they're somehow letting me down or throwing in the towel. I remind them all it is much better to get ahead of this process and sell and try to find an outcome than it is to wait till you have three months of cash and say, well, what do we do now?

Charles just made me so nostalgic for the 15, 20 years ago norm where you got a million dollars per engineer and it was both like just what you did. Plus all these Corp dev people at these companies wanted to eventually be in venture and so they knew they wanted to treat the sellers well. And so it was like total, you know, incentive type stuff. I think we're coming into a really nice period for M and A and what I mean when I say like healthy M and A, I don't mean, oh, everybody's overpaid, we're going to be great for venture, so forth. I think like companies actually will slot into the right lane for potential discussions which are, this is something very special and there's aggressive bidders amongst multiple parties. This is something that could continue, has value, but may have value more as part of somebody else. And then things that are or are not working to certain degrees but can find homes. And we're coming out of a period that was terrible. Anything of any consequence, people were somewhat frozen on a regulatory standpoint. And then if you remember post 21 with all the, the layoffs and freezes, like folks didn't want to take on new headcount. And so if a company wasn't profitable, they didn't even want to go through the notion of like, I don't have headcount to buy people, you know, type of thing. And a lot of that has changed now. You know, I was an angel investor in Browser Co, which, you know, Atlassian bought. There's some other things underway that, you know, inside, outside the portfolio that I know of that should hopefully close within coming quarters and stuff. And just, I think the conversations are happening again and people want to be creative. I'm hopeful that will return alongside IPOs, you know, as, you know, one of, if not the best way for startups to realize their value.

Gotta wrap things up. But since this is the final episode of the year and in spirit of reflection, I really would love for us to go around the horn and share a take on the past year in venture and where we sit Today the question really is what do you think the broader game is that's being played in venture right now with the players being investors, founders, LPs, et cetera. And then what does that mean for your specific role and position in the ecosystem? I'm going to start with you, Peter, than Hunter, than Charles.

Well, my answer gets to be easy because all games are good games. We just want more people playing more games.

That's exciting.

I think that this has been beaten into the ground this year. This idea of there are two games in venture. One is a capital game and one is a non consensus game and you can define those in any way that you want, but those are the two games being played. I think that in the Next, call it 18 months, there's not going to be some sort of tiredness or annoyance with the consensus capital game. It's just it's not going to change. So we have to accept that. That what I do think is going to change and this is a hope more than perhaps a data backed evidence based take, is I hope that people in the non consensus area will start trying to do way weirder things. I would like to see weirder funds being raised and weirder founders being backed and that will by definition increase loss ratios. So in some ways sad thing to say, too many companies are sticking around for too long that are just like being the fourth in a space or the eighth in a space or the tenth in a space these days because it's so easy to spin up AI stuff. I want to see companies that are one of one in their space and that space might not be worth investing into at all, but they got a shot. So I'm hopeful for like weirder stuff in 2026, at least outside the mega fund world.

Great take Hunter.

I'll talk a little, a little bit. I agree the sort of capital accumulation, sort of large existing consensus fund dynamic is not going away. But my hope for 2026 would be that we continue to speed the Darwinism of thinning that her and I think Darwin moves a kind of like half speed inventure too slowly. Mediocrity persists because the timelines to actually figuring out whether something is good or not take a long time. The incentive model on the LP side, if you've been in business with somebody and those seats keep changing like basically you're always willing to give somebody who might have been successful for you in the past, like one more chance. Time is long, you have to replace that seat with somebody else if you're an underwriter. So like who wants to do all that work type of thing. So plug for screen door, the fund of funds we run. I mean, I think one of the reasons we believe emerging managers are going to be the places where you really get the 5, 5x, 7x, 10x and above funds is because you have folks who have modern, new, compelling strategies where the practitioners are close to the strategies that are not. The people who inherited it from a third generation firm just running some out of date playbook and their funds are right sized to the strategy. You can be early, you can be nimble, you can be aggressive without having to worry about can I get $50 million into that deal over time? If not, it doesn't really matter to me. And so that's kind of like my separation of 25 and 26. Moving from the I wish consensus would disappear to saying consensus is here. Let's tick off the, the weakest. What's. What's the National Geographic tick off the weakest, you know, caribou. And so I'm hoping to release more hungry emerging managers onto the Serengeti to cut down the fat, lazy VCs that exist today.

Megafauna instead of megafund. What you're looking for there, I'll go.

In a really different direction toward in the year I had a bunch of conversations with LPs that are significant investors in the megafonts. And for once they didn't just give me the like, we're going to accept, accept lower returns. We know that a couple of them said, you know, if the last wave produced $100 billion companies like Facebook, what if this wave produces $1 trillion companies with a greater frequency than we've seen in the past? I was like, you know, if that's true, it works, honestly, it works like you can get 250 to $500 million out of a $5 billion fund into some of these companies and if they turn out to be of that scale, not only does it work, it actually works quite well. Now, I can't envision a world in which there are enough of those. I think we have what, four publicly traded trillion dollar companies depending on the day, four or five, three to five. I don't know, we have a couple. But I can envision a world where if that math is true, there's enough for several, but probably not all of the mega funds to not only succeed at this side, but to succeed at a side that's even greater than today. And that was something I really hadn't wrapped my head around. But I keep looking at the candidates. And I'm like, I don't, I don't know where we find that many of them, but I'm very curious to see what that leaderboard of private company valuation looks like at the end of the year. The other corollary that some of these people said as a pushback was, well, if these are going to be trillion dollar companies, maybe I don't need to own them as privates because at least some meaningful chunk of that compounding will likely happen in the public markets too. And would I rather try to pick them out as privates? And so the meta theme I heard from a lot of LPs is I think a deeper, deep rethink of like what does my venture allocation look like, the portfolio level, if it really is becoming megafauna hunting again, I will be able to capture some meaningful chunk of that megafauna upside in the public markets. And I just met a lot of LPs who I think are for the first time in a long time rethinking how much money do I want adventure and where in that venture stack do I want it to live. And I'm very curious to see where that conversation is this time next year.

I think that's a great point. As you believe that those companies become consensus multiple funds, it's like, like you don't need to be in every fund to get exposure to that company. In fact, as opposed to being able to be in these many funds to get you exposure to the tech ecosystem, if all those funds are coalescing around the same company is just entering at different stages. I like steak. I don't need steak eight ways.

But that fundamentally there's an underlying assumption there which is these companies will go public.

Yeah.

Which is. Or that they will be, they will.

Be public like companies that will be tradable in the same way that the Elon companies are tradable today. Public would be better I think for, for the masses, but that's a good addition Peter. But I think there's some belief that like hey, I can get into these companies later, either as very late stage privates or as public companies and still capture a meaningful chunk of alpha.

Love. It makes me excited for 2026. We are sadly out of time today. Thank you Hunter and Peter for taking time out of your day to record with us as our very first guests, setting a high bar. I'm sure it is not the last time you will come through the learning corner. Thank you Charles. Thank you to our incredible listeners for being such supporters of the POD over the last months. Happy holidays and we will catch you all in 2026.

Thank you, guys.

Bye.

Thanks very.

Much.