The venture model is changing. Slowly—and then all at once.

Why small teams, capital efficiency, and sharp judgment are the new edge in VC

venture capital changing slowly and then all at once

For years, venture was a scale game.

Raise fast. Burn fast. Grow faster.
And in a world of infinite margin and winner-take-all software, it worked.

But AI is rewriting the rules. Costs are higher. Margins are lower. Growth is faster—but not stickier.
And suddenly, the old playbook looks… dated.

The next generation of great investors won’t just write big checks.
They’ll back small teams with sharp thinking and unfair advantages—before the rest of the market catches on.

Here’s how the landscape is shifting—and what that means for how we invest.

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Capital efficiency isn’t optional anymore—it’s a strategy

AI startups are expensive to start. GPUs, infra orchestration, fine-tuning—it adds up fast.

But oddly, many of these companies can reach revenue faster than ever before:

• Distribution is faster (thanks to APIs and viral channels)

• Headcount is leaner (thanks to LLM tools and agents)

• Workflows are more automatable than ever

It’s a paradox: startups are costlier to start, but cheaper to scale.

In this world, capital efficiency isn’t a constraint.
It’s a tactical advantage.

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Growth isn’t a moat anymore

The ability to grow fast used to signal strength. Now? It just signals competence.

• Interoperability fuels go-to-market

• Meme velocity is measured in minutes

• Playbooks are open-source

Velocity is table stakes.
Defensibility is what matters.

The best founders won’t just grow—they’ll build feedback loops, stickiness, and edge.

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The best funds won’t be the biggest

Software no longer scales on pure margin.
Founders are raising smaller rounds.
Startups can hit profitability early.

That makes it harder for large funds to play the early game—and easier for small, sharp funds to find outsized returns.

• Faster decisions

• Non-consensus checks

• High ownership without overcapitalizing

• Closer alignment with operators

The highest multiple returns may come from the smallest funds.

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Small teams make better decisions

Groupthink kills edge.

You don’t need a Monday partner meeting to know if a founder’s exceptional.
You need a point of view—and the courage to act on it.

In a world of consensus filters, clarity is alpha.

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Research is free. Insight is rare.

Everyone has access to the same surface data: market maps, funding rounds, AI trend reports.

The real edge?

• Seeing early

• Underwriting differently

• Filtering noise from signal

The best investors don’t wait for consensus.
They move on patterns—and bet before the market has words for it.

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Trust moves faster—but the bar is higher

Social media accelerates introductions.
Mutuals, proof of work, track records, and founder narratives are more visible than ever.

But visibility ≠ credibility.

In my first venture job, I learned: we wouldn’t back someone unless reference calls came back with one clear signal:

“This person is one of the most remarkable people I’ve ever worked with.”

That hasn’t changed. If anything, it matters more now.

Trust is still the most important currency in venture.
What’s changed is how we evaluate it—quickly, rigorously, and publicly.

We can build trust faster now. But we still have to earn it, verify it, and feel it in our gut.

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The next generation of venture firms will look different

Smaller. Faster. Sharper.
More conviction, less consensus.

They’ll back founders who move fast and spend carefully.
Who compound trust and margin.
Who don’t just ride hype—they build loops.

And they’ll do it with less capital, fewer people, and better taste.

I’m building a firm around these principles.
If you are too—founder, investor, or operator—I’d love to connect.