In the era of AI, everyone is searching for their long-term value in the middle of immense noise.
Venture capital itself is no exception.
I still remember the moment I became seriously interested in this industry and began to see it as the next field I wanted to go deep in for the long run. I wrote an article exploring whether vc could be automated.
In just two to three months, the article became the top source reference for Google AI Overview and made it onto the first page of SEO results.
The response I heard most often was simple: venture capital is a people business. Even some of the biggest names in the field went on podcasts to explain why they would not be replaced.
AI has unquestionably changed every industry. What I am trying to understand is whether it changes how each player is positioned.
For some reason, it always brings me back to the feeling of walking into Vegas.
To some, it is a gambling ground, dangerous and strangely seductive.
Others come prepared, armed with card-counting skills and the discipline to win.
And some move by instinct alone, letting luck do the rest.
We are all playing at the same table, like a game of Texas Hold'em, though I know this comparison is hardly new in venture.
Some gravitate toward the high-end casinos, in suits, drinking wine.
Others prefer the tables crowded with tourists, where practiced players can read the room and profit from it.
Some strategies endure.
Others are just flashy bluffs.
So who wins in the end? Can this ever become a winner-take-all game?
My long-term view of the game is this:
venture capital claims its position through information asymmetry, amplifies outcomes through capital leverage, and compounds valuation through narrative.
At the same time, its function is to act as both a translator and a monetizer of information, turning signal into something the market can understand and price.
Every firm and every angel operates inside this system, a system of resource allocation and information exchange.
The real winner will not be the one who simply wins inside the game, but the one who redesigns the terrain itself, the way Vegas once turned desert into an oasis, and becomes the infrastructure of the next era.
Observation
A people business.
I have heard that line attached to this industry more times than I can count. There are already countless attempts to explain how venture capital strategy and operations will shift in the next era. These are the three versions that come up most often.
Bill Gurley, a General Partner at Benchmark Capital, frames venture capital as a sales business, and the highest level of sales is always a people business.
You are selling to LPs when you ask them to place their capital with you instead of another GP. You are selling to founders when you want the best of them to choose you over Sequoia or a16z. And you are still selling after the investment, helping portfolio companies sell products to customers, vision to talent, and shares to the next round of investors (oops).
Then there is a16z, which comes up in what feels like 80 percent of my conversations with other partners in venture. In this era of information overflow, accelerated by AI-generated content, everyone is fighting for attention. In some sense, that shift began with social media, when everyone was handed, at least theoretically, an equal voice and the ability to make enough noise to be heard.
It is no surprise, then, that a16z's framing, "Andreessen Horowitz is a media company that monetises through venture capital," leaves such a strong impression.
From day one, Marc Andreessen and Ben Horowitz saw a16z as the tech industry's version of CAA, Creative Artists Agency, Hollywood's top talent agency. Under that logic, venture capital is not merely capital. It is a business of helping founders build a brand, claim the narrative, and win the perception battle, which, to be honest, is not where most tech bros are strongest.
The last logic I find underrated is one I heard from Chamath on the All-In Podcast. His point is straightforward: early-stage VC makes money through information asymmetry.
The true edge lies in knowing earlier than the market which companies are worth betting on, and that informational gap is the source of alpha. Scale, however, comes through asset gathering. Once the information edge is gone, or the fund grows too large to remain agile, the model degrades into repeatedly raising bigger funds to harvest management fees.
System
Venture capital is not merely money. More accurately, it is an infrastructure for resource allocation and narrative distribution.
Game
To most people, venture capital looks like rich people betting on the future. At its core, however, it is a deeply structured mechanism of time arbitrage, one that operates in collaboration with startups.
Venture capital is more than backing startups. In early markets where information is radically uneven, it is the practice of pre-pricing future cash flows through conviction, control of resources, and mastery of exit timing.
The bet is not merely on the founders, but on the combined tangible and intangible assets of a company before the market fully recognizes their value. Their familiarity with capital cycles allows them to sense when a technology story is about to be seen, believed, and repriced by the broader market.
In essence, it is a game of calculated risk. Knowing earlier is not enough, you also have to be willing to place the bet.
Although VC valuation logic often appears detached from reality, at one level it is really a lag in how information moves through the market, provided that the bet is not just an emotional one driven by FOMO.
In venture capital, uncertainty is not something to eliminate, but something to manage, price, and sell.
They enter at a lower valuation, then raise it through follow-on investment or by bringing in co-investors, creating unrealized gains on paper.
This engineered form of mark-up is what makes venture returns look so sharply asymmetrical.
The danger is that once the exit window narrows, those layered valuations can unwind fast, wiping out paper wealth in a moment. The prosperity of the VC industry depends on an illusion of liquidity. As long as the next round of capital arrives, the valuation holds.
In the end, the outcome depends not only on picking well, but on exiting at precisely the right time.
Acceleration
Many founders think venture risk lies in ideas and innovation. More often, it lies in limited time and the movement of information.
Startups need capital to accelerate, and in doing so they bear execution risk. Venture investors seek leverage on execution, and bear liquidity risk. The market, meanwhile, bears narrative risk. Once capital enters the company, growth is forced to accelerate, and both product iteration and revenue storytelling are put on a countdown.
Founders and investors are locked into the same pressure cycle, where products risk being shaped less for users and more for the next round of fundraising.
The team must constantly balance what is true with what can still be sold as a story.
Narrative
Ordinary investors listen to industry consensus shaped by capital and the media, then chase the concepts currently in fashion. Elite investors do not chase the wave, they manufacture it, then amplify the story until it moves market sentiment.
They control key narrative moments, amplify industry emotion, and then use that momentum to exit. It is ultimately a game of cognitive control. Technology may be the material, but sentiment is the actual currency.
The craft lies in narrative engineering: whoever tells the first story the market can accept and believe gains the power to reshape the valuation model.
Exiting does not conclude the game, it sets the next cycle in motion.
Hierarchy
I have asked myself more than once why, within such a wide and varied financial world, I feel most drawn to venture investing. If you are obsessed with numbers, you go to a quant firm. If you believe in Buffett's investing philosophy, you choose the public markets.
What draws me to venture investing is not only its geeky, deeply engineered nature, which I naturally love. It is also the fact that its information is not merely circulated, but actively created.
The hierarchy of information is the first moat of power.
Layer 1
At the lowest level is the public information we encounter every day.
News, earnings, press events, and the rest. If you make decisions from the news, you are driving by looking through the rearview mirror.
Still, this is where most people remain, working off information that is not just secondhand or thirdhand, but many layers removed, and using it to make decisions across every part of their lives.
Layer 2
Above that is insider information, the kind shared in closed rooms, invite-only events, and networks where information circulates quietly among members. These are signals that only insiders can access.
They include what policies are being shaped, which sectors are seeing capital retreat, and which parts of the market are beginning to cool. This layer is valuable, but it is not always safe.
The cards in your hand are rarely yours alone. Sometimes more than a hundred people already know them.
Layer 3
At the top layer, you become the source of information itself.
Your decisions affect the market, and sometimes extend their influence far beyond it. Many people never come into contact with this level of access, either to the information or to the people who hold it. Not because they lack intelligence, but because what matters here is the importance of the node you occupy and the value of the resources attached to you.
If you want to move into this layer, you have to become someone worth exchanging information with. Otherwise, you stay at the downstream end of the information chain.
This is also why I love technology, especially the zero-to-one stage. It is a little funny, in hindsight.
"I'm a scientist, because I invent, transform, create, and destroy for a living, and when I don't like something about the world, I change it."
— Pickle Rick, Rick and Morty
If you have ever stood at the downstream end of the information chain, disruptive innovation becomes one of the few available moves.
You are trying to start with something small enough to be ignored, then let it ripple across layers, exchanges, and environments, until your thoughts become real, and reality turns you into a source of information others are willing to exchange for.