The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified Investor Stories 398: Disruptive Forces (Ralston and Patil, Schilling, Stevens)
Apr 24, 2025
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Episode notes
Offer More Than Capital
- VCs must provide founders with real, actionable value beyond just capital to succeed.
- Delivering such value requires direct involvement from general partners, not relying solely on platforms.
Traditional VC Model is Declining
- Traditional venture capital relying on exclusive networks is dying due to hyper-connected ecosystems like Twitter.
- Exceptional returns require offering unique value beyond capital, attracting the best founders deliberately.
AI Threatens Software Margins
- AI could disrupt software economics by driving marginal costs of software engineering toward zero.
- This threatens the traditional high-margin annuity model of software companies.