Edition #14: 37 New Funds, 1000 Fund…

1. Key Themes

Theme 1: Three Dominant Emerging VC Strategies Are Consolidating Around Herd Behavior

Emerging VCs are converging on a narrow set of themes, with conviction investing in "weird" uncrowded spaces as a potential differentiator.

"There seem to be three dominant strategies emerging right now: defense/national security, AI (with all the recent adjustments), and generally weird stuff that nobody else is willing to underwrite." — Pavel Prata

Theme 2: Power Law Is Intensifying — Late-Stage Giants Now Outperform Early-Stage Unicorns on Return Probability

The traditional VC assumption that earlier = higher upside is being challenged by data showing mega-cap companies have statistically superior odds of 10x-ing.

"A business valued between $100B and $1T (a 'Centacorn') has a higher statistical likelihood (31%) of multiplying its value by 10x compared to smaller, earlier-stage unicorns (8%)." — Tren Griffin, summarizing Coatue's Thomas Laffont

Theme 3: Extreme Concentration of Venture Value Creation

The venture asset class produces returns from a vanishingly small number of companies, reinforcing why access and selection matter above all else.

"104 companies out of 10,000 generated 44% of all venture value." — David Clark, VenCap

Theme 4: Capital Bifurcation — Mega Platforms Are Crowding Out Emerging Managers

Capital is structurally consolidating toward platform funds, leaving emerging managers increasingly starved of LP capital in a pattern that predates 2021.

"The share of capital going to emerging managers fell substantially across the ZIRP period. This reflects a trend that has been documented all the way [back]." — Dan Gray, Odin

"I think one way to look at where we are today is that we're in basically ZIRP 2.0, where it's not the U.S. government providing free cash but rather the platform funds. There'll be a time where that low cost of capital and the availability of it will slow down." — Michael Kim, Cendana Capital

Theme 5: Defense/National Security as a Legitimate Emerging VC Vertical

Defense tech has matured enough for dedicated fund formation at the emerging manager level, with institutional-grade fund structures being raised by operators with military and finance backgrounds.

"Wall Street met Army Special Ops to build a $50M defense fund where hardware meets hard capital." — Pavel Prata, describing Jason Zins and Nomi Defense Fund I

2. Contrarian Perspectives

Perspective 1: Emerging Manager Struggles Are Structural, Not Cyclical

The common narrative is that 2021 was an anomaly and capital will eventually revert to emerging managers. The data suggests otherwise — the decline in capital allocation to emerging managers is a long-running structural trend, not a post-ZIRP correction.

"In reality, the share of capital going to emerging managers fell substantially across the ZIRP period. This reflects a trend that has been documented all the way [back]." — Dan Gray, Odin

The counterpoint worth watching: David Clark notes it may still be cyclical, pointing out "if we are back at 2018/19 levels of seed companies then no one was saying there was an issue back then."

Perspective 2: Investing Later — Not Earlier — May Produce Better Risk-Adjusted Returns

The entire VC industry is built on the assumption that getting in early maximizes returns. Coatue's data inverts this: companies already at $100B–$1T have a 31% chance of 10x-ing vs. only 8% for unicorns. This challenges the conventional early-stage bias.

"Coatue's Thomas Laffont on a 'Power Law Paradox': a business valued between $100B and $1T (a 'Centacorn') has a higher statistical likelihood (31%) of multiplying its value by 10x compared to smaller, earlier-stage unicorns (8%)." — Tren Griffin

Perspective 3: DPI Drought Is Now a Multi-Year LP Crisis, Not a Blip

LPs from 2019–2020 vintage funds have yet to see meaningful distributions, raising serious questions about the liquidity promises embedded in the asset class.

"2019-2020 vintage LPs are still waiting for their first dollar back." — Peter Walker, Carta

This is particularly pointed given that 2019–2020 vintages are now 5–6 years old — well past the point where top-performing funds historically begin returning capital.

3. Companies Identified

Boost VC

Description: Early-stage VC fund focused on crypto and "sci-fi" companies
Why mentioned: Iconic fund breakdown — cited as a case study in early, contrarian conviction investing with exceptional DPI results
Quote: "Fund Alpha ($6.5M, 2013): 2.15x DPI & 6.24x TVPI. Fund I ($38M, 2016): 4.35x DPI & 7.02x TVPI. Adam Draper and Brayton Williams built them by writing checks into crypto and 'sci-fi' before anyone else would take the meeting."

Benchmark

Description: Legendary early-stage VC fund known for small partnership, high conviction
Why mentioned: Referenced in both a LinkedIn post ("Benchmark's $2B raise and the end of stage-based investing") and podcast context; cited as a model for conviction-driven investing without spreadsheet defaults
Quote: "Everett Randle sits at Benchmark's table (one of venture's smallest, highest-conviction funds) where every partner still underwrites deals by hand, no spreadsheet default."

Nomi Defense Fund I

Description: $50M emerging defense-focused VC fund
Why mentioned: Featured in Emerging Manager Q&A as a case study in building a specialized defense/national security fund
Quote: "Wall Street met Army Special Ops to build a $50M defense fund where hardware meets hard capital."

Legion

Description: Marketplace matching emerging GPs with LPs; includes fund admin and secondary liquidity infrastructure
Why mentioned: Sponsor — notable as infrastructure solving a structural problem for the emerging manager ecosystem
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."

Precursor Ventures

Description: Pre-seed focused fund, one of the earliest dedicated pre-seed vehicles
Why mentioned: Charles Hudson credited with effectively creating pre-seed as a category; perspective on why it's now harder than ever
Quote: "Charles Hudson started Precursor Ventures in 2015 and effectively invented pre-seed as its own category, writing hundreds of Day 0 checks to first-time founders longer than almost anyone else in the business."

Harmonic

Description: AI-powered data platform aggregating real-time signals on 30M+ companies and 190M+ people
Why mentioned: Sponsor and data partner for Murph's "Seed-to-Scale Signal" fund performance scoring model
Quote: "Aggregates real-time data on 30M+ companies and 190M+ people to surface the signals that actually matter – all through AI-powered workflow."

FIRM Capital

Description: Emerging manager research and mapping firm
Why mentioned: Published the map of 1,000 emerging managers managing $97B in AUM — a significant data resource for LPs
Quote: "We mapped the next gen 1,000 managers. $97B AUM. Browse, filter, create lists and share: emergingmanagermap.com"

Cendana Capital

Description: Fund-of-funds focused on emerging managers
Why mentioned: Michael Kim's "platform funds as ZIRP 2.0" framing is one of the sharpest macro takes in the issue
Quote: "We're in basically ZIRP 2.0, where it's not the U.S. government providing free cash but rather the platform funds."

Wonderstruck

Description: Storytelling and design studio for venture-backed companies
Why mentioned: Murph's new brand/design partner; also a sponsor
Quote: "The storytelling and design studio venture-backed companies call when they outgrow their brand. Trusted by 1517, Kindred, Sunflower & 200+ founders."

R136 Ventures

Description: Venture fund where Pavel Prata served as LP Relations Manager
Why mentioned: Pavel's professional background; crossed $500M AUM, giving him direct experience with 100+ LPs
Quote: "After almost three years as LP Relations Manager at R136 Ventures... help build a team that crossed the $500M AUM mark."

4. People Identified

Pavel Prata

Description: Author of Murph Capital newsletter; former LP Relations Manager at R136 Ventures
Why mentioned: Author going full-time on Murph; observed herd behavior across 10+ emerging VC conversations; wrote on mega fund encroachment at seed
Quote: "After almost three years as LP Relations Manager at R136 Ventures, I've decided to make my next career move and finally focus on Murph full time."

Thomas Laffont

Description: Partner at Coatue Management
Why mentioned: Author of "Power Law Paradox" thesis showing centacorns statistically outperform unicorns on 10x probability
Quote: "Coatue's Thomas Laffont on a 'Power Law Paradox': a business valued between $100B and $1T has a higher statistical likelihood (31%) of multiplying its value by 10x compared to smaller, earlier-stage unicorns (8%)."

Michael Kim

Description: Founder/Managing Partner, Cendana Capital (fund-of-funds)
Why mentioned: Coined the "ZIRP 2.0" framing for platform fund dominance
Quote: "We're in basically ZIRP 2.0, where it's not the U.S. government providing free cash but rather the platform funds. There'll be a time where that low cost of capital and the availability of it will slow down."

Dan Gray

Description: Co-founder, Odin (VC/LP platform)
Why mentioned: Made the structural (not cyclical) case against emerging managers recovering capital share; wrote "Survival of the Fittest" longread
Quote: "The share of capital going to emerging managers fell substantially across the ZIRP period. This reflects a trend that has been documented all the way [back]."

Jason Zins

Description: Co-founder, Nomi Defense Fund I; background combining Wall Street and Army Special Operations
Why mentioned: Subject of Emerging Manager Q&A on building a $50M defense-focused fund
Quote: "Wall Street met Army Special Ops to build a $50M defense fund where hardware meets hard capital. We asked Jason Zins 10 questions about how they did it."

Adam Draper & Brayton Williams

Description: Co-founders, Boost VC
Why mentioned: Delivered 2.15x and 4.35x DPI in back-to-back funds by backing crypto and sci-fi founders before it was consensus
Quote: "Adam Draper and Brayton Williams built them by writing checks into crypto and 'sci-fi' before anyone else would take the meeting."

Charles Hudson

Description: Founder, Precursor Ventures
Why mentioned: Credited with inventing pre-seed as a distinct category; now argues it's harder than ever
Quote: "Charles Hudson started Precursor Ventures in 2015 and effectively invented pre-seed as its own category, writing hundreds of Day 0 checks to first-time founders longer than almost anyone else in the business."

Peter Walker

Description: Head of Insights, Carta
Why mentioned: Published data showing 2019–2020 vintage LPs have yet to receive their first dollar back in distributions
Quote: "2019-2020 vintage LPs are still waiting for their first dollar back."

Samir Kaji

Description: Co-founder/CEO, Allocate (LP platform for emerging managers)
Why mentioned: Challenged the "53% small-check" data point being used as fundraising advice for emerging managers
Quote: "Why the 53% small-check data is the wrong fundraising advice."

Everett Randle

Description: Partner, Benchmark
Why mentioned: Featured on Sourcery podcast explaining how AI has changed the SaaS risk/scale tradeoff and Benchmark's approach to evaluating AI companies
Quote: "Everett explains why AI has flipped SaaS's old scale-versus-risk tradeoff on its head, and walks through how he actually evaluates AI companies now that the model can't do the work for him."

David Senra

Description: Host of Founders podcast; has studied 400+ founder biographies
Why mentioned: Featured on Long Strange Trip podcast; identified the single shared trait across 400 founders — framed as counter to Silicon Valley's prevailing narrative
Quote: "He breaks down the one trait all 400 actually share, and why it isn't the one Silicon Valley keeps telling itself matters."

Kyle Harrison

Description: Partner, Contrary
Why mentioned: Wrote "The bifurcation of capital is inevitable" — a longread on capital concentration dynamics
Quote: "The bifurcation of capital is inevitable." (longread title attributed to Harrison)

David Clark

Description: Partner, VenCap
Why mentioned: Published data showing 104 of 10,000 companies generated 44% of all venture value; offered the counterpoint that emerging manager struggles could still be cyclical
Quote: "104 companies out of 10,000 generated 44% of all venture value."

5. Operating Insights

Insight 1: Build a Real-Time Picking Signal, Not a Static Ranking

For LPs and fund-of-funds evaluating emerging managers, backward-looking performance data is insufficient. Murph's "Seed-to-Scale Signal" model — scoring managers based on Series A/B/C outcomes of their seed investments, weighted by stage, round size, and whether they led — offers a template for building live deal quality assessments rather than relying on stale AUM or TVPI.

"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."

Insight 2: Contrarian, Concentrated Conviction in "Uncrowded" Themes Drives Outsized DPI

Boost VC's track record demonstrates that committing early to categories others actively avoided — crypto in 2013, "sci-fi" hardware — produces both elite TVPI and, critically, actual distributions. In an environment where DPI is the central LP concern, this is an actionable portfolio construction signal.

"Fund Alpha ($6.5M, 2013): 2.15x DPI & 6.24x TVPI. Fund I ($38M, 2016): 4.35x DPI & 7.02x TVPI. Adam Draper and Brayton Williams built them by writing checks into crypto and 'sci-fi' before anyone else would take the meeting."

Insight 3: Emerging Managers Should Build Direct LP Pipelines Outside Public Databases

Pavel's new invitation-only Emerging Manager Memo is specifically designed to surface funds that never appear in public databases — implying that the most interesting managers are systematically invisible to LPs relying on conventional sourcing.

"Every month I review dozens of funds that are actively raising, most of which never make it into public databases."

6. Overlooked Insights

Insight 1: AI Has Structurally Broken SaaS's Classic Scale-vs.-Risk Tradeoff

Buried in the podcast recommendation section, Benchmark's Everett Randle argues that AI has fundamentally changed how SaaS companies should be evaluated — not merely as a capability upgrade, but as an inversion of the core risk model investors have used for two decades. This has direct implications for how AI-native SaaS deals are priced and diligenced.

"Everett explains why AI has flipped SaaS's old scale-versus-risk tradeoff on its head, and walks through how he actually evaluates AI companies now that the model can't do the work for him."

Insight 2: The Emerging Manager Universe Is Larger and More Institutionalized Than Commonly Understood

1,000 mapped emerging managers collectively managing $97B in AUM is a non-trivial market — yet this segment remains structurally undercapitalized and underrepresented in LP portfolios. The gap between the scale of the universe and the share of capital it receives represents both a problem and a potential opportunity for LPs willing to do the access work.

"We mapped the next gen 1,000 managers. $97B AUM. Browse, filter, create lists and share."