Rising Round Sizes and Use of Capital

In this episode, CJ sits down with Joe Floyd, General Partner at Emergence Capital, for a candid conversation about the venture landscape reshaped by AI. They unpack how acqui-hires are rewriting the social contract between founders and investors, why AI engineers are commanding “boy band money,” and how SaaS playbooks are being torn up and rebuilt in real time. Joe explains the economics of AI-native startups — from circular capital flows to model-provider costs — and explores whether the next trillion-dollar private company could come from this new wave. Along the way, they discuss valuation frenzy, headcount discipline, and why curiosity might be the most valuable skill in tech today.

—

LINKS:

Joe Floyd on LinkedIn: https://www.linkedin.com/in/joefloyd/

HarbourVest Partners:

https://www.emcap.com/

CJ on X (@cjgustafson222): https://x.com/cjgustafson222

Mostly metrics:

https://www.mostlymetrics.com

RELATED EPISODES:

Why Fundraising Has Slowed Down: Insights from Emergence Capital’s Benchmarking Report:

From Credit Karma to Notion: CFO Rama Katkar on Leading Finance Through Every Growth Stage:

—

TIMESTAMPS:

(00:00:00) Preview and Intro

(00:00:54) Opening and Episode Overview

(00:02:53) Sponsor – RightRev | Tipalti | Aleph

(00:07:07) Back to the Office and Startup Pace in San Francisco

(00:08:40) AI Tooling Experiments and the Risk of Short-Term Hype

(00:10:19) Building Stickier AI Products and Competing in Crowded Markets

(00:12:27) SaaS Moats, Product-Market Fit, and the AI Shift

(00:14:00) How Productivity Platforms Use AI To Stay Sticky

(00:15:58) Continuous Authentication and the Next Wave of Security Tech

(00:16:36) Sponsor – Rillet | Fidelity Private Shares | Mercury

(00:19:54) Acqui-Hires, the Social Contract, and the War for AI Talent

(00:22:42) Stock-Based Comp and the Economics of Attracting Engineers

(00:24:39) The New Go-to-Market Playbook and Curiosity as a Superpower

(00:27:59) AI’s Impact on Sales, Forecasting, and Buyer Behavior

(00:29:11) Coding Agents, Headcount Reduction, and the Future of Engineering

(00:32:21) Building Defensible IP and Competing in the LLM Ecosystem

(00:34:34) AI ROI, Payback Periods, and the Search for Efficiency

(00:37:17) Valuations, Fund Cycles, and the Venture Market Reset

(00:40:20) The Circular Flow of AI Capital and Infrastructure Overbuild

(00:45:37) AI Pricing Models, Platform Wars, and Open Source Futures

(00:50:02) The Race to the First $1 Trillion Private Company

(00:51:09) Credits and Outro

—

SPONSORS:

Fidelity Private Shares is the all-in-one equity management platform that keeps your cap table clean, your data room organized, and your equity story clear—so you never risk losing a fundraising round over messy records. Schedule a demo at https://www.fidelityprivateshares.com and mention Mostly Metrics to get 20% off.

Mercury is business banking built for builders, giving founders and finance pros a financial stack that actually works together. From sending wires to tracking balances and approving payments, Mercury makes it simple to scale without friction. Join the 200,000+ entrepreneurs who trust Mercury and apply online in minutes at https://www.mercury.com

RightRev automates the revenue recognition process from end to end, gives you real-time insights, and ensures ASC 606 / IFRS 15 compliance—all while closing books faster. For RevRec that auditors actually trust, visit https://www.rightrev.com and schedule a demo.

Tipalti automates the entire payables process—from onboarding suppliers to executing global payouts—helping finance teams save time, eliminate costly errors, and scale confidently across 200+ countries and 120 currencies. More than 5,000 businesses already trust Tipalti to manage payments with built-in security and tax compliance. Visit https://www.tipalti.com/runthenumbers to learn more.

Aleph automates 90% of manual, error-prone busywork, so you can focus on the strategic work you were hired to do. Minimize busywork and maximize impact with the power of a web app, the flexibility of spreadsheets, and the magic of AI. Get a personalised demo at https://www.getaleph.com/run

Rillet is the AI-native ERP modern finance teams are switching to because it’s faster, simpler, and 100% built for how teams operate today. See how fast your team can move. Book a demo at https://www.rillet.com/metrics

#RunTheNumbersPodcast #VentureCapital #ArtificialIntelligence #StartupStrategy #FutureOfWork

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cjgustafson.substack.com