Tremendous

An angel investor's take on life and business

  • GPT 5.2 Still Loses to Grok and Gemini

    I ran OpenAI’s new GPT 5.2 through a three round test. It still scores below Grok and Gemini.

    Some of GPT-5.2’s responses are excellent. But the quality of its answers are inconsistent. 

    Let me show you where this model excels and where it falls short… 

    Round #1: Learning About Needle Biopsies

    Tomorrow, I’m meeting with a company that’s working on cancer diagnostics. They’re going to make needle biopsies easier.

    Can GPT 5.2 help explain how needle biopsies work? 

    GPT 5.2 gave a fantastic answer here. It clearly explained exactly how needle biopsy and MRI work together. 

    It also noted that some needle biopsies are done together with CT scans, which I did not know. When I clicked through on the citation, I found a high-quality source from the National Institutes of Health.

    I’m giving this round an A+! 

    Round #2: Investigating AI Market Research Startups 

    This afternoon, I’m meeting with a startup doing AI market research. It creates synthetic audiences to test marketing content.

    So I asked GPT 5.2 for an overview of the startups in this area. I asked for a ton of information, including product features and the amount of venture capital they’ve raised. 

    GPT 5.2 crushed it here, giving a great summary and lots of detail on the leading startups. When I clicked on citations to verify how much funding these startups raised, the information checked out. 

    I’m going to give this round an A+ as well! 

    Round #3: CoachGPT 

    For our third and final round, I asked GPT 5.2 to help me with my workouts. 

    My goals for weight training are hypertrophy and longevity. What exercises should I try?

    GPT 5.2 gave a nice response with useful pictures. It recommended some exercises I’ve never heard of, like the “dead bug” for core strength.

    But it did not cite a single source. So, it’s hard to know how good this information is. 

    Are these really the best exercises for my goals? Or are they just random things GPT 5.2 came up with?

    I also would like to see GPT 5.2 respond with some videos, not just still images. When it comes to learning an exercise, there’s nothing like a video.

    I’m giving this round a C. 

    Wrap-Up

    Overall, GPT 5.2 earned a B+ in my testing.

    It seems to be tuned toward white-collar work, like investing and medicine. OpenAI alluded to this in their announcement.

    But when I use it for anything else, GPT 5.2 is pretty weak. It wasn’t very helpful in helping me plan a workout.

    Our goal is Artificial General Intelligence. AGI would give great answers to all sorts of questions.

    GPT 5.2 doesn’t do that. 

    OpenAI’s latest model isn’t bad, but it’s still behind Grok and Gemini. Grok scored an A in my testing and Gemini scored an A-.

    No wonder Sam Altman called the code red. OpenAI may have started the AI revolution, but today, it’s falling behind. 

    Have you tried GPT 5.2? 

    More on tech: 

    Grok 4.1 Thinking Beats Gemini 3.0 Pro in Real World Test

    Can DeepSeek Beat the Best American Models?

    How to Make a Great AI Product: Oboe

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How to Make a Great AI Product: Oboe

    I just used an incredible new AI education app called Oboe. If you want to learn how to design great software, read on… 

    Oboe just launched in September. The founder, Nir Zicherman, also founded the podcasting tool Anchor. 

    Oboe can spin up a course on any subject you want, using AI.

    Several of the most successful people I know studied psychology. So today, I used Oboe to give me an intro to psych…

    A Slick UI, a Powerful Application

    Oboe’s design is world class. 

    All I had to do was write a one-sentence prompt: “Give me a basic introduction to psychology.” Suddenly, an entire course appeared!

    The course is structured in brief units that take just a couple of minutes to read. The material is clear, engaging, and useful.

    You can even hear the lessons as a podcast! 

    This is awesome if you’re busy doing dishes or working out. The podcasts are so good it’s very difficult to tell they’re AI.

    Time for a Pop Quiz

    After reading through the first lesson, I thought to myself, “I need some flashcards for this. I wonder if there’s an AI app to make flashcards.” 

    Oboe read my mind! 

    Just below, Oboe embedded some flashcards in the page. Click on them, and you see the answer.

    Putting this flashcard application into the course automatically is absolutely genius product design. As soon as I saw this, I knew Oboe could be really big.

    How Oboe Can Improve

    One problem Oboe has is sourcing.

    Take the section on research methods in psychology…it links to only one source. 

    When I click on the source, all I get is an outline of a psychology course. I don’t see any information on the topics in the course, so it’s hard to tell whether Oboe’s information is accurate or not.

    This is a new product, so I’m not expecting it to be perfect. But better sourcing would be a great way to improve.

    I’d also like to see flashcards and quizzes in every single section. Right now, Oboe includes them in some sections but not others. 

    Wrap-Up

    Overall, I’m giving Oboe an A. 

    If it could do a little better with sourcing and quizzes, I’d bump that up to an A+. I’d also love to see an iOS app. 

    Oboe is incredibly powerful. It gives every single person free access to a great education on any subject.

    Think about all the kids stuck in rotten schools. 

    Maybe their teachers are terrible, their classmates unruly. But if they can somehow get access to the internet, they can learn with Oboe.

    Oboe is already better than most of the teachers I’ve had, even at good schools. 

    I made it halfway through my course this morning. I’m looking forward to finishing it soon!

    If you want to take my Intro to Psych course on Oboe, here’s the link. We can learn together.

    Have a great weekend, everybody!

    More on tech: 

    Can DeepSeek Beat the Best American Models?

    Grok 4.1 Thinking Beats Gemini 3.0 Pro in Real World Test

    Kimi 2 Thinking — A Real Threat to ChatGPT and Grok

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How I Fixed My Sleep (and Started Making Better Decisions)

    My entire job is making decisions. If I want to make good ones, I need sleep. Here’s how I make sure I get it…

    Cut the Lights

    When evening rolls around, it’s all about winding down.

    One of the best ways to do that is to lower the lights. Come evening, I only have dim lights on. This helps me relax. 

    When it’s time to go to sleep, I go even further.

    I have a wonderful eye mask that blocks almost all light. This makes falling and staying asleep much easier.

    I’ve tried quite a few eye masks, including a fancy $40 one from Manta Sleep.  But this $10 one from Amazon is my favorite. 

    Showering Japanese Style

    Every night, I like to take a nice hot shower.

    I picked up this habit in Japan. Most Americans shower in the morning, but Japanese usually shower at night.

    Showering at night helps promote sleep. It’s also nice to be super clean before you lay down!

    Winding Down

    After my shower, I like to put on a little mindless TV.

    I’ve tried reading before sleep, but reading makes me too mentally active. I’m trying to shut my brain down, not ramp it up. 

    Some people say to avoid screens before sleep. But for me, it’s what I’m doing with the screen that matters.

    Avoiding social media is definitely a good idea. It’s too interactive.

    But mindless TV is perfect. 

    Lately, I’ve been enjoying 90 Day Fiancé. It doesn’t get much more mindless than that! 

    Soon, I find myself nodding off.

    Different things work for different people. If reading a novel before bed helps you fall asleep, by all means do that! 

    Bedroom Is for Sleep

    I’ve finally watched enough 90 Day Fiancé, and it’s time to hit the rack. 

    When I lay down at night, I want to feel relaxed. Part of that is associating my bedroom with sleep.

    So I never, ever work in my bedroom. Not a single Zoom call or e-mail ever happens there.

    When I come into the bedroom, I want to be thinking about drifting off to dreamland. 😴

    The 8 Hour Sleep Opportunity

    I almost always leave eight hours for sleep.

    Once in a while, I’ll find myself rolling around. But usually, I’m out like a light.

    Everyone sleeps fitfully from time to time. The key is to give yourself enough time to sleep.

    Try your best to allot eight hours a day. If you make the time to sleep, sleep will come eventually. 

    Wrap-Up

    I used to only sleep about four hours a night. But for the last six years, I’ve been making sleep a top priority.

    The quality of my work has gone through the roof.

    I know it’s hard to find the time for sleep when you’re running a company. But you’ll do a better job when you’re healthy and well-rested.

    Pick one thing from this post and try it tonight — dim lights, hot shower, or banning work from the bedroom. Then let me know how it goes! 

    More from the blog:

    My Christian Health Share

    What Is the Ideal Amount of Exercise?

    What the Best Founders I Know Have in Common

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How First-Time Founders Can Master Fundraising

    Venture capital can feel like a secret club with its own language. How do you actually get money?

    Here are three great ways to get up to speed on how fundraising works…

    Founder University

    “Where did he learn to pitch like that?”

    Founder University, that’s where. 

    I was at a demo day in NYC a while back, and one founder blew everyone away. His pitch was clear, crisp, and concise. His deck was polished to a fine sheen. 

    Founder University is a 12-week pre-accelerator program run by Jason Calacanis’ venture firm, Launch. Founder University helps you with sales strategy, marketing, and fundraising — everything you need to run an awesome startup. 

    The program costs $500. Launch will give that $500 back if you attend all the sessions.

    Best of all, Jason invests $25k into the top companies.

    You can apply for Founder University here. The next cohort starts in early 2026. 

    YC Startup School

    Not everybody gets into Founder University. But anyone can take courses from Y Combinator Startup School, an online program that teaches you how to run a startup. 

    If you haven’t heard of Y Combinator (YC), it’s the best startup accelerator in the world. Massive companies like Stripe and Airbnb are YC alumni. 

    Sign up here!

    The Founder’s Library

    Another fantastic way to learn about raising venture capital is by reading books written by insiders. Here are my three favorites… 

    • Angel by Jason Calacanis. This book got me into angel investing. Jason explains what venture capital is and how to get it. This book is targeted toward investors, but getting inside their heads is the best way to get a check.  
    • Secrets of Sand Hill Road by Scott Kupor. A friend of mine bought me this book as a gift, and what a wonderful gift it is! This book does a great job of breaking down how venture capitalists think and what they’re looking for. 
    • Venture Deals by Brad Feld and Jason Mendelson. This book breaks down everything you need to know about fundraising in incredible detail. Don’t know what a term sheet is? Not familiar with SAFE’s? Brad and Jason have your back. 

    Wrap-Up

    If you’re an outsider, venture capital seems like a dark art. Luckily, it’s never been easier to learn about fundraising.

    There are whole schools like Founder U devoted to teaching you how to raise money. There are wonderful self-paced courses like YC Startup School to guide you. And there are fantastic books like Angel to give you an insider’s view.

    If you’re a first-time founder, sign up for one of these programs and read one of these books. In just a few weeks, you’ll go from newbie to savvy fundraiser. 

    More on tech: 

    Your Deck Probably Sucks. Here’s How to Fix It.

    How to Tell If Investors Are Really Interested

    The Perfect Pitch

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • My Top 3 Startups from Launch Accelerator Demo Day

    I never miss JCal’s Launch Accelerator Demo Day. Yesterday’s event was one of the best yet. Here are my three favorite startups… 

    3. NextVisit. NextVisit helps psychiatrists document their visits easily using AI. The app listens to the doctor and patient speak, completing notes and other charting for you.

    Some doctors have to work late into the night just to finish their charting. I saw this myself when I worked for Epic, an EMR company.

    NextVisit could make their work much easier. 

    What struck me most in founder Faisal’s pitch was how much he cares about this problem. I could see it written on his face.

    No wonder — Faisal is a psychiatrist himself! A founder this committed won’t give up.

    2. Redii. Redii helps you create retirement plans for remote employees based outside the United States.

    Some of my startups employ folks in Argentina, Colombia, India, just about anywhere you could think of. Imagine trying to set up retirement plans in all those different countries!

    Now you don’t have to.

    Redii was Roelof Botha’s top pick in the Launch Accelerator when they presented at Sequoia recently. With so much potential in this market, I can see why!

    In particular, Redii will be great for AI data labeling companies. They’re hiring folks all over the world at an incredible pace. 

    If AI data labelers could provide employees with great retirement benefits, it would be easier to attract and retain great people.

    1. Path. Path makes it easy for companies to create internal apps.

    Say you want to build an application to track problem tickets at your organization. Path can help you create a new app without using code. 

    You can spin up any app you want easily and include enterprise-grade profiles and security. 

    Lovable makes it easy to create an MVP using no code. But Lovable apps don’t have the scalability and security enterprises want.

    Cursor, on the other hand, is wonderful for developers. But if you don’t have a strong coding background, you’ll probably find it difficult to use.

    Path gives you the best of both worlds. You can build enterprise-grade apps easily with no coding background.

    Companies all over the world will create apps on Path. This is a startup that could grow at incredible speed.

    With strong early traction and a great technical team, Path is off to a great start. That’s why it’s my number one pick in this cohort.

    Wrap-Up

    Jason’s program produces some of the best startups in the business. At every Launch Accelerator Demo Day, you’ll find strong technical teams with great traction raising at reasonable valuations.

    I find a great investment in almost every cohort.

    If you’re a founder, I strongly encourage you to apply to the Launch Accelerator. And if you’re an investor, join me at the next demo day!

    What was your favorite startup in this cohort?

    More on tech: 

    Request for Startups

    Raise Money Faster by Targeting the Right Investors

    Should You Take a Low Ball Offer from a VC?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Request for Startups 

    The solution to every problem is a startup. Here are three problems I’m itching to solve. If you’re working in any of these areas, hit me up… 

    1. Capturing Data on Mass Production. I dream of androids in factories making us everything we need. But to do that, we need very specialized data.

      I’m looking for startups that are collecting data from factories to help train AI models.

      You could have the workers wear something like Meta Ray-Bans, which would capture their movements. But that could be very controversial — the workers will know you’re trying to replace them.

      A better approach might be to outfit factories with tons of high-res cameras. They could capture everything that happens and use it to train AI.

      You could even create small factories solely for AI training. The purpose of these factories would be to generate data on production processes, not to make actual products.

      A good place to start is textiles. This is one of the simplest forms of manufacturing. When a country begins to industrialize, they often start with textiles.

      Replacing factory workers will be a painful transition at first. But you can’t stop progress.

      What if we’d never adopted tractors for fear of displacing farm workers? We’d all still be doing back-breaking labor on farms, barely scraping by.
    2. Help for Endometriosis/PCOS. Hundreds of millions of women worldwide suffer from endometriosis and polycystic ovary system (PCOS). These conditions are major causes of pain and infertility.

      What if a platform could help women get better treatment? It could guide women to specialists and help them with medication and lifestyle changes.

      In the world of startups, we look for big opportunities. Helping hundreds of millions of people avoid crippling pain is one of the biggest opportunities I can think of.

      Moreover, fertility across much of the world is at rock bottom. Better care for women with these conditions would make it easier for people to start families.
    3. Superpower for Dogs. As much as we love our pets, the care available for them is rudimentary.

      Humans have services like Superpower, which provide tons of lab tests and health advice. We need Superpower for Dogs.

      I’m picturing a platform that would get dogs lab tests, telehealth visits with vets, and in-person appointments. The platform could make a deal with certain vets to get a bulk discount.

      Veterinary care these days is incredibly expensive. Superpower for Dogs could help. 

    Wrap-Up

    We’re really lucky here in startupland. Every day, we have an opportunity to solve the world’s biggest problems.

    Automating manufacturing, helping women have better health and fertility, and helping our little friends live longer — these are three problems I’d love to solve. 

    If you’re working in these areas, contact me on X or LinkedIn. Looking forward to hearing from you!

    More on tech:

    Raise Money Faster by Targeting the Right Investors

    How to Get Warm Intros the Easy Way

    Should You Take a Low Ball Offer from a VC?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Raise Money Faster by Targeting the Right Investors

    Are you getting a lot of no’s from investors? Maybe you’re pitching the wrong people. Here’s how to find the right investors for you….

    Different investors specialize in different parts of the market. You need to find the investors that focus on companies like yours. 

    What’s Their Sweet Spot?

    First, you need to find investors that invest at your stage. 

    Most investors specialize in companies at particular stages. We call it a “sweet spot.” My sweet spot is companies at around $200k to $500k ARR. 

    So, which stage are you? Here’s how early funding stages usually break down…

    • Idea or MVP: Accelerators, friends and family
    • Trickle of revenue (< $100k ARR): Pre-seed
    • Early revenue ($200-500k ARR): Seed
    • Early PMF (> $1 million ARR): Series A

    Where Do They Invest?

    Like most investors, I only invest in certain countries. For me, that’s the U.S., Canada, UK, and a handful of similar markets. 

    Those are the markets I know best. They’re also the places where I have the most connections.

    Be sure to pitch investors that invest in your country. 

    If you’re in Nigeria, focus on investors that invest in Africa. Pitching a bunch of VCs that only invest in the United States is a waste of time. 

    What Sectors Do They Like?

    Investors also specialize in certain sectors. Some investors only do SaaS. Others only do marketplaces.

    Then there are firms that only do deep tech, like satellites and microchips. 

    Find investors that invest in your sector. If you’re a biotech startup, don’t bother pitching people who only invest in SaaS. 

    Find Out Their Check Size

    Finally, you should find out an investor’s check size. 

    It’s a good idea to pitch investors at a variety of check sizes. Sometimes, a small investor like me ($10k checks) can connect you with a big fund.

    Knowing each investor’s check size will help you put your round together. 

    Most seed rounds include a lead investor writing a check of over $1 million. They also often include some smaller funds and angels like me.

    Where to Find Investors

    I’m a big fan of OpenVC. They make it easy to find investors in countless countries and sectors. 

    When you’re searching on OpenVC or whatever platform you choose, filter based on the criteria above. Find investors that match your stage, sector, geography, and check size requirements. 

    Once you find the investors you want to target, send them a brief message. Tell them about your vision, team, and traction.

    Try something like this:

    Hi Jim!

    UberCab lets you call a black car using your smartphone. You can see the car’s location and you know your fare in advance.

    We are at $10,000/month revenue, growing 50% MoM. 

    My co-founder and I are both engineers. We’re raising a $2 million seed round.

    Got 20 minutes?

    Thanks,

    Travis Kalanick

    Keep it pithy! Investors are much more likely to respond to a a shorter message.

    Wrap-Up

    If you target the right investors, fundraising will get dramatically easier. 

    No more beating your head against a wall talking to people who are never going to invest. Instead, you’ll be talking to investors that are excited about companies like yours.

    Just like when you’re looking for customers, targeting the right people is everything. Target the right investors and you could find yourself raising millions.

    Have a great weekend, everybody!

    More on tech:

    Your Deck Probably Sucks. Here’s How to Fix It.

    An Investor’s Dream Cold E-mail

    How to Get Warm Intros the Easy Way

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Three Easy UX Wins to Make Your Product Better

    If your product is easy to use, you’ll get more customers. Here are three simple tweaks to make your product better…

    Make Sign-In Easy

    Always offer Google and Apple sign-in options. If you make it easy for customers to sign in, more of them will complete the flow and become users. 

    When an app makes me enter my email and create a password,  I often just close it and delete it. It’s too annoying and time-consuming. 

    One startup I spoke with recently saw a huge lift in conversion once they included Google sign-in. Make your app easy to use, and more people will use it! 

    Autofill 2FA Codes

    If your app sends text messages to users with two-factor authentication codes, make sure you fill in the code for the user. Don’t make them click or type anything. 

    Whenever an app grabs that 2FA code and inputs it for me, I think, “These guys know what they’re doing.” 

    Like offering easier sign-in options, 2FA autofill makes your app easy to sign up for. Make it easy, and more people will sign up!

    Make The Next Step Obvious

    In many work flows, you know the user’s next step. Make it obvious!

    Let’s say I need to input my address. After that, I need to click Next.

    Make that Next button pop. Go with bright yellow on a black background, for example.

    The user has no doubt what you want them to do – click this button! Customers love software that’s easy to navigate. 

    Wrap-Up

    You want people to use your product. So make it as easy as possible.

    Cut the number of clicks. Cut the number of things I have to enter. Make it obvious what I’m supposed to do next.

    Even some small usability tweaks can really increase conversion and usage. The more usable your product is, the faster you’ll grow!

    More on tech: 

    Should You Take a Low Ball Offer from a VC?

    Your Deck Probably Sucks. Here’s How to Fix It.

    Do Investors Take Forever to Get Back to You? Here’s What I’m Doing Differently.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why Seed Rounds at $40 Million Will Be Bad Investments 

    I’m seeing tons of seed rounds at $40 million and up. Here’s why those will turn out to be bad investments….

    Venture Funds Need Massive Growth

    Startups raising seed rounds at $40M need to hit $1B ARR within 10 years. That is a near-impossible task. 

    But any less, and it’s not a great investment.

    To justify investing in startups, we need to hit at least a 15% annual return. Stocks give us 10%. We need to beat that handily to make up for the risk and illiquidity.

    That means that we need to hit a 4X fund in 10 years. 

    A typical early-stage fund might contain 35 companies. Most funds have nearly all gains come from one company. 

    So, we need one of those companies to grow its valuation by 280x to get our 4x fund, after accounting for 50% dilution (35 x 4 x 2). 

    The Difficult Math of $40 Million Seed Rounds

    The average public SaaS company trades at 5.7x ARR. Let’s be generous and assume that our newly public startup trades at twice that, 12x, to account for high growth. 

    Our $40M seed stage company needs to grow to a valuation of $11.2 billion to give us our 280x. Unicorns aren’t enough anymore — we need decacorns. 

    At a 12x multiple, hitting a valuation of $11.2 billion requires $933 million ARR. If we get the average multiple of 5.7x, we need $2B in ARR. 

    Very few companies ever reach that much revenue. 

    If we had done that seed round at a more reasonable $15M valuation, we’d “only” need to hit a $4.2 billion market cap on $350 million in ARR to get our 280x (assuming a 12x revenue multiple). 

    Even that is very difficult. But it’s a lot more realistic. 

    But What If…?

    “But what if it’s the next OpenAI?”

    I can practically hear you saying that now.

    True, if that high price seed round becomes a company worth hundreds of billions, it will be an excellent investment. But those companies are vanishingly rare. 

    We can’t count on hitting one of the couple best companies in an entire generation.

    A more typical successful investment is a company like ServiceTitan. And while ServiceTitan is a great business, it’s no OpenAI. 

    What the Typical Unicorn Looks Like

    ServiceTitan went public a year ago. It’s trading at an $8.5B market cap on $866M of revenue in the last year. 

    That’s a 10x revenue multiple — well above average.

    But even for ServiceTitan, the $1B ARR milestone hasn’t come yet. And while it receives a generous multiple, it’s not high enough to make it a decacorn. 

    Making Exceptions

    Once in a great while, we’ll see a truly extraordinary company. Founders with incredible backgrounds. Off the charts growth.

    In a situation like that, we can make an exception. We can do $30, $40, or even $100 million if we really want to. Then, we can balance that out with more reasonably priced deals. 

    What we can’t do is pay $40 million across the board. 

    If we do that, our upside in the winners just isn’t enough. Our fund would have little chance of an acceptable return. 

    Wrap-Up

    Roelof Botha recently called investing in venture “return-free risk.” 

    If we’re doing deals in companies with little to no revenue at $40M valuations, Botha is absolutely right. Investments like that are highly unlikely to produce the returns necessary to justify the risk. 

    I’m focusing on awesome founders raising at reasonable valuations. 

    Price isn’t everything. But it’s not nothing, either. 

    More on tech: 

    Why Entry Price Matters

    Should You Take a Low Ball Offer from a VC?

    Scouting for an AI Venture Fund

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

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    Misfits Market

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  • Scouting for an AI Venture Fund

    A strange number popped up on my phone this morning. It was Boardy, the first AI venture capitalist. And it looks like we may be working together…

    Boardy is an an AI agent that helps you find customers, investors, and employees. Scrolling X last night, I saw a post on Boardy’s new Scout Program. 

    I meet many hundreds of founders per year. Why not send a few of them to Boardy’s new venture fund? 

    Working Out Boardy’s Kinks

    I filled out a brief form and got a phone call from Boardy. Boardy interviewed me on my experience investing and why I’d make a good scout. 

    The first thing I noticed is that Boardy uses a voice with a very thick Australian accent. For the first couple of minutes, I could barely understand it.

    When you’re working with a mostly American audience, don’t choose a heavy accent like this. You want the most neutral American accent possible. 

    Next Step: Boardy Scout?

    But after a couple minutes, Boardy and I got into a good back-and-forth. 

    I explained how I source companies and spot great founders. I like to see highly technical founders building in a huge market. 

    Boardy asked good questions and clearly explained how its program works. Occasionally, Boardy went on a little too long or cut me off. But mostly, the conversation flowed smoothly. 

    After around 10 minutes, Boardy wrapped up our chat and told me that it would refer me to the human team. They’ll make the final decision whether I become a Boardy Scout.

    As capable as Boardy is, humans are still calling the shots.

    Is This the Future of Venture?

    Speaking with Boardy feels like the future.

    There are a huge number of founders raising at any given time. Boardy has already spoken with 7,000 of them, more than any human could manage.

    Giving every founder a hearing could change the game of venture. Entrepreneurs without the usual connections could still get in front of investors. 

    The best pitches will probably still be forwarded to humans. That’s how Boardy’s Scout program is working today, and I think AI VCs will continue to operate that way for the foreseeable future. 

    If you’re writing somebody a sizable check, you probably want to meet them at least once. 

    Would I Use an AI to Meet Founders?

    Using an AI to do your initial founder calls could make sense at a huge fund with tons of deal flow. But for me, it doesn’t yet. 

    My deal flow is modest enough that I’m able to meet every founder myself. An AI to interview founders wouldn’t add a lot of value. 

    But I can always use more great investors to refer my companies to.  So I’m looking forward to working with Boardy to get more cash into these great startups. 

    Wrap-Up

    More and more work is going to look like my chat with Boardy — humans talking to highly capable AI agents. 

    It’s weird and unsettling at first. But you’d be surprised how quickly you get used to it. 

    AI will let us do things we’ve never done before, like Boardy interviewing those 7,000 founders. Many great entrepreneurs who would have been overlooked by humans will be discovered by AI. 

    I want to take the plunge before everyone else and start working with AI to get companies funded. More people helping startups is always good, even if they’re not technically “people”. 

    More on tech: 

    Should You Take a Low Ball Offer from a VC?

    Do Investors Take Forever to Get Back to You? Here’s What I’m Doing Differently.

    Your Deck Probably Sucks. Here’s How to Fix It.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order.