Edition #13: 25 New Funds, Most…

1. Key Themes

The Zombie VC Crisis Is Coming — and DPI Will Be the Trigger

The newsletter surfaces a structural risk building inside the VC ecosystem: a coming wave of fund managers who cannot raise again because they lack realized returns, concentrated in funds that missed the top 25–30 private assets.

"Growing DPI dispersion, combined with increasing concentration in top portfolio assets and slow exit activity, is creating perfect conditions for 'Zombie VCs'... The top 25-30 private assets are not evenly distributed across GP or LP portfolios. Zombies live among us." — Endowment Eddie, quoted in Pavel Prata's tweet

AI Is the New Web3 — Hype Cycle Awareness Is Essential

The newsletter explicitly draws a parallel between the web3 mania of 2021–2022 and the current AI frenzy in SF, cautioning investors to hold conviction with clear eyes.

"Four years ago, average SF sentiment was 'the smartest people I know are all joining web3.' These same people thought the economy would restructure around getting a tradable NFT each time you bought something. AI is much more useful. But it's important to remember: [SF is a bubble]." — Turner Novak, Banana Capital

The Emerging Manager Landscape Is Bifurcating — Breakouts Are Crossing $1B

A small cohort of emerging managers is scaling rapidly past the $1B AUM threshold, effectively graduating out of the "emerging" category and competing directly with established firms.

"$1B+ across 3 funds in under 5 years is insane. Emerging no longer. Conviction, Gil >> & co, Alt Cap, A. Different arcs, all clearly broke out. Alt's fund II was one of the most competitive allocations in the valley."* — Alex Klein, Nucleus Talent

Geographic Arbitrage at Seed Remains a Durable Alpha Source

Hummingbird VC's early success — 12x TVPI on each of two funds — is cited as proof that conviction-based geographic pioneering, not just sector selection, can generate top-of-vintage returns.

"@barendvandenb and @ileri built them by flying to Istanbul and Athens before anyone else had a term sheet ready." — Pavel Prata on Hummingbird VC Funds I–II

AI Is Separating the Next-Decade VC Managers from the Rest

Seed investors who rebuild their sourcing, diligence, and evaluation processes around AI are being positioned as the managers who will define the coming decade, while others run an obsolete playbook.

"AI is quietly separating the managers who will define the next decade from those still running a 2019 playbook – and [Kevin Hartz and Bennett Siegel] walk through what sourcing, diligence, and founder evaluation actually look like when you rebuild the process around it." — Newsletter description of Kevin Hartz podcast episode

2. Contrarian Perspectives

Endowments Can Make Great Direct VC Bets — The University of Michigan Proves It The conventional wisdom is that university endowments are slow, risk-averse, and unsuited for early-stage VC direct investing. Michigan's $20M first-round bet on OpenAI directly challenges that assumption.

"Per docs released in the OAI/Musk case, the University of Michigan endowment invested $20 million in the first round of OpenAI. Best direct investment from an endowment of all time?" — Ben Casnocha, Village Global

This implies that institutional LPs willing to take concentrated early-stage direct positions can generate outsized returns — a strategy most endowments systematically avoid.

Founder Evaluation Should Center on "Rizz," Not Just Track Record or TAM Against the industry standard of market-size and traction analysis, Cyan Banister argues that a charisma-adjacent quality ("Rizz") is a core signal most VCs systematically ignore — and the trifecta combining it with business and technical acumen is rarer than the market prices in.

"[Cyan Banister] breaks down her 'Biz, Tiz, Rizz' framework for spotting exceptional founders, and explains why the trifecta is rarer than most VCs admit." — Newsletter description of Cyan Banister podcast episode

Her track record — Uber, SpaceX, DeepMind, Pokémon Go — gives this framework empirical weight beyond intuition.

Missing the Best Companies Can Sharpen, Not Derail, an Investment Thesis The standard narrative treats early-stage misses as failures. Ali Partovi reframes his misses on PayPal and Google as the formative data points that sharpened a people-first investment thesis, which ultimately produced returns at seed in Cursor and Kalshi.

"Ali Partovi missed PayPal at three employees and Google at three employees. Those misses became the thesis behind Neo – a people-first fund that got into Cursor and Kalshi at seed by obsessing over outlier talent before anyone else cared about the company."

3. Companies Identified

Hummingbird VC

Description: Early-stage European VC firm
Why Mentioned: Case study in geographic arbitrage alpha — achieved 12x TVPI on each of Funds I and II by pioneering investment in Turkey and Greece before any other institutional investor
Quote: "Each returned 12x TVPI – top of vintage. @barendvandenb and @ileri built them by flying to Istanbul and Athens before anyone else had a term sheet ready."

Kraken

Description: Cryptocurrency exchange
Why Mentioned: Cited as a marquee Hummingbird VC portfolio outcome — led $5M Series A in 2014, company went on to raise $1.3B+ and achieve a $20B pre-IPO valuation
Quote: "@krakenfx (led $5M Series A in 2014 → $1.3B+ raised, $20B pre-IPO"

OpenAI

Description: AI research and product company
Why Mentioned: University of Michigan endowment invested $20M in the first round — cited as potentially the best direct investment from an endowment of all time
Quote: "The University of Michigan endowment invested $20 million in the first round of OpenAI. Best direct investment from an endowment of all time?"

Cerebras

Description: AI chip company
Why Mentioned: Highlighted as Pierre Lamond's conviction bet made at age 84, underscoring the value of deep expertise and long investing careers
Quote: "In 2015, at 84 years old, he founded Eclipse Ventures. And then proceeded to triple down into Cerebras."

Eclipse Ventures

Description: Deep tech VC firm
Why Mentioned: Founded by Pierre Lamond at age 84, cited as an example of enduring venture conviction and expertise
Quote: "In 2015, at 84 years old, he founded Eclipse Ventures."

A* (A-Star)

Description: Emerging VC fund
Why Mentioned: Cited as a breakout emerging manager, crossing $1B+ AUM across three funds in under five years
Quote: "$1B+ across 3 funds in under 5 years is insane. Emerging no longer."

Collide Capital

Description: VC fund focused on underrepresented founders
Why Mentioned: Featured in the Emerging Manager Q&A; raised a $95M Fund II after a decade of ecosystem building
Quote: "Aaron Samuels and Brian Hollins spent a decade building the ecosystem for underrepresented founders – then raised a $95M fund to back them."

Legion

Description: GP/LP matching and fund infrastructure platform
Why Mentioned: Signed as Murph Capital's anchor partner; building an integrated platform for emerging managers with LP matching, fund administration, and secondary liquidity
Quote: "A high-signal marketplace matching emerging GPs with relevant LPs, featuring seamless fund admin, built-in secondary liquidity, and over $300M in investor capital flows."

Harmonic

Description: AI-powered company and people data platform
Why Mentioned: Powers the newsletter's proprietary "Seed-to-Scale Signal" ranking of emerging seed managers; aggregates real-time data on 30M+ companies and 190M+ people
Quote: "Harmonic aggregates real-time data on 30M+ companies and 190M+ people to surface the signals that actually matter – all through AI-powered workflow."

Neo

Description: People-first early-stage VC fund
Why Mentioned: Ali Partovi's fund, cited as proof that talent-obsessive investing (over idea-first investing) can generate 10x fund returns and early access to companies like Cursor and Kalshi
Quote: "A people-first fund that got into Cursor and Kalshi at seed by obsessing over outlier talent before anyone else cared about the company."

Cursor

Description: AI-powered code editor
Why Mentioned: Cited as a seed-stage investment win for Neo, validating the talent-first approach
Quote: "A people-first fund that got into Cursor and Kalshi at seed by obsessing over outlier talent."

4. People Identified

Pierre Lamond

Description: Veteran venture capitalist; nearly 30 years at Sequoia, 6 years at Kleiner Perkins, founder of Eclipse Ventures at age 84
Why Mentioned: Cited as one of the greatest VCs of all time and an underappreciated figure — proof that investing longevity and conviction compound over decades
Quote: "He's one of the greatest VCs of all time & not as studied today... In 2015, at 84 years old, he founded Eclipse Ventures. And then proceeded to triple down into Cerebras. I hope to be half as good at 84." — Delian Asparouhov

Cyan Banister

Description: Co-founder of Long Journey Ventures; early backer of Uber, SpaceX, DeepMind, Pokémon Go
Why Mentioned: Profiled for her non-consensus "Biz, Tiz, Rizz" founder evaluation framework — argues that the full trifecta is rarer than the market recognizes
Quote: "[She] built one of the most distinctive early-stage track records of the last 15 years... by paying attention to signals most investors ignore."

Kevin Hartz

Description: Early-stage investor; backed Airbnb, Eventbrite, PayPal
Why Mentioned: Cited for rethinking seed investing from the ground up around AI-enabled processes
Quote: "He and Bennett Siegel are rethinking seed investing from the ground up... AI is quietly separating the managers who will define the next decade from those still running a 2019 playbook."

Ali Partovi

Description: Founder of Neo, a people-first seed fund
Why Mentioned: Used early misses on PayPal and Google to develop a talent-first thesis that produced two 10x funds and early entry into Cursor and Kalshi
Quote: "Ali Partovi missed PayPal at three employees and Google at three employees. Those misses became the thesis behind Neo."

Aaron Samuels

Description: Co-founder of Collide Capital
Why Mentioned: Featured in the Emerging Manager Q&A for raising a $95M Fund II after a decade building infrastructure for underrepresented founders
Quote: "Aaron Samuels and Brian Hollins spent a decade building the ecosystem for underrepresented founders – then raised a $95M fund to back them."

Delian Asparouhov

Description: Partner at Founders Fund
Why Mentioned: Authored the tweet resurging interest in Pierre Lamond as an understudied VC legend
Quote: "I've never met Pierre Lamond, but he's one of the greatest VCs of all time & not as studied today."

Turner Novak

Description: Founder of Banana Capital
Why Mentioned: Drew the explicit parallel between the web3 hype cycle and current AI frenzy in SF, urging investors to maintain calibration
Quote: "Four years ago, average SF sentiment was 'the smartest people I know are all joining web3'... AI is much more useful. But it's important to remember: SF is a bubble."

Ben Casnocha

Description: Co-founder of Village Global
Why Mentioned: Surfaced the University of Michigan endowment's $20M first-round OpenAI investment as a landmark direct LP bet
Quote: "Per docs released in the OAI/Musk case, the University of Michigan endowment invested $20 million in the first round of OpenAI. Best direct investment from an endowment of all time?"

5. Operating Insights

Build a Real-Time Picking Signal, Not a Static Ranking The newsletter describes Murph's "Seed-to-Scale Signal" methodology — tracking which seed investors led rounds in companies that subsequently raised Series A, B, or C — as a dynamic, data-driven alternative to reputation-based manager evaluation.

"Using a custom data model powered by Harmonic, we score funds based on the stage, round size, and whether they led the seed. It's not a static ranking, but a real-time signal showing which emerging managers possess genuine picking skill."

For LPs and fund-of-funds managers, this is a directly actionable diligence framework: weight lead participation at seed against subsequent institutional round conversion, not lagging TVPI marks.

Geographic and Talent Conviction, Not Consensus, Produces Top-of-Vintage Returns Both Hummingbird's geographic-first approach and Neo's talent-first approach demonstrate that the highest-returning seed strategies share a common structure: invest before consensus forms, whether the consensus is geographic ("no one else had a term sheet ready") or about the company ("before anyone else cared about the company").

"Those misses became the thesis behind Neo – a people-first fund that got into Cursor and Kalshi at seed by obsessing over outlier talent before anyone else cared about the company." "[They built] by flying to Istanbul and Athens before anyone else had a term sheet ready."

6. Overlooked Insights

The Ten-Year Fund Structure May Be Disappearing The newsletter references a longread titled "The disappearance of the ten-year fund" by Dan Gray of Odin, but does not elaborate. Given the broader context of zombie VCs and slow exit activity, a structural shift away from the decade-long fund model could have significant implications for LP liquidity expectations, GP carry timelines, and how emerging managers structure their vehicles — yet this thread is entirely undeveloped in the newsletter text.

The Private-Market Liquidity Trap Is Surfacing in Public-Market Analogies A market report titled "AC/VC: Rivian, Tesla, and the Private-Market Liquidity Trap" is listed without commentary. The framing — using late-stage public EV companies as a lens on private market illiquidity — suggests a thesis about how overvalued late-stage private assets are trapped without exit paths, echoing the zombie VC concern. This cross-market liquidity analysis is flagged but not explored, and may warrant deeper attention for investors managing portfolios with late-stage exposure.