Bucky Moore Joins $30 Billion AUM Mega Fund Lightspeed

Bucky Moore joins Molly O'Shea to announce his new role as Partner at $30B AUM Lightspeed Venture Partners. Bucky opens up about his transition from Kleiner Perkins, the decision to join an established platform versus launching his own fund, the structural and economic elements of changing funds, and what it means to invest at the earliest stages during a generational market cycle. We dive deep into the evolution of megafunds, the heat they’re receiving, the shifting LP landscape, and how venture capital is being reshaped by the rise of targeting trillion-dollar outcomes in companies like OpenAI and SpaceX. Bucky shares his insider take on how to win deals in a hyper-competitive market, the importance of long-term founder relationships, and why early-stage investing is still the soul of great VC firms—even at scale. From navigating fund transitions and valuation froth to unpacking the real impact of AI and what makes a high-stake founder, Bucky brings sharp insights and grounded wisdom. He also reflects on the power of gratitude, taste, and team in an increasingly complex venture ecosystem. Molly on X: https://x.com/MollySOShea Bucky on X: https://x.com/buckymoore Follow Sourcery for the latest updates! https://www.sourcery.vc/ Follow for exclusive Sourcery content & early releases on Passes: https://www.passes.com/mollysoshea TIMESTAMPS: 00:00 - Transition to Lightspeed 01:48 - Why Lightspeed Over Own Fund? Transition Dynamics 05:01 - Mega Funds & Trillion-Dollar Strategies 09:19 - “Venture Arrogance Score” 18:28 - How to Win Competitive Rounds 22:03 - The Importance of ‘Picking’ as a Lead Investor 26:32 - Valuations in Pre-Seed & Seed Rounds 30:46 - The Concept of Taste in Venture Capital 38:02 - Sourcing & Building Relationships with Founders 44:22 - Looking Forward: New Beginnings at Lightspeed #podcast #investing #technology #venturecapital #entrepreneur #startup #siliconvalley

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Molly O'Shea?

  Bucky Moore, welcome to Sorcery.

• 0:02Speaker 01

  Thanks for having me. It's great to be here in the studio.

• 0:05Molly O'Shea?

  The studio of studios. Well, you're a very popular name right now, making a huge jersey swap in Silicon Valley. First, I'm so excited to get into this and congratulations on your new role as partner at $30 billion AWM Lightspeed.

• 0:23Speaker 01

  Thank you. Super excited about this next chapter.

• 0:26Molly O'Shea?

  Could you share more about the process?

• 0:28Speaker 01

  Absolutely. Look, I think anytime you start thinking about making a change in this job, it's not easy. There's obviously a lot of things that you have to undo, a lot of stakeholders that you have to respect and be very mindful of. And I think in the end, the opportunity here at Lightspeed just felt so unique at this point in time, both in terms of my ability to come and really help them double down on their commitment to early-stage ventures, specifically on the enterprise side, which has always been my focus and is actually the core DNA of the firm itself when they got started. And also, I just think we're in this really unique point in time where funds that have this global reach and this ability and ambition to go and partner with these, this new class of company that I think is just like nothing we've seen before. These companies that could be worth trillions of dollars someday.

• 1:13Speaker 01

  The SpaceXs, the Andurils, the Open AIs, the Anthropics. These companies are like nothing we've seen before. And I think with that, there is this unique point in time where funds like Lightspeed that have an ambition to really partner with those companies all the way, have this ability to go and partner with them in a way that not only allows them to support the ambition of these really large companies, given how capital-intensive they are, but also in doing so, generate truly outsized returns.

• 1:40Molly O'Shea?

  So I think the biggest question for you right now is, why did you decide to join Lightspeed versus raise your own fund?

• 1:48Speaker 01

  So I spent a lot of time thinking about this. And I think the first thing that you have to ask yourself when you go through a process like this is like really, what gets you out of bed in the morning? And for me, what I've realized is two things. One is I really am focused on just working with the best entrepreneurs. And I want to be in a position where I can serve their needs, be a great partner to them, and frankly, grow with them and try to help them tap into their ambitions. That is what I love doing. And I really think that having the capacity to do that is just a lot easier at a larger platform. So that's one thing. And then I think the other thing is I really like playing with a team. And I think that venture can be a team sport. I think it can also be a very individualistic sport. And I think ultimately, when I thought about starting my own fund, the question was like, well, who would I do it with?

• 2:32Speaker 01

  And what I realized was figuring out who that person would be would be minimum a six month process. The fundraising process thereafter would take nine to 12 months. And then I'm looking at the clock and I'm realizing, wait, do I really want to be out of the industry, out of the market for a year and a half to two years and what I believe will be some of the most promising vintages of our time? That, I think, was just too hard for me to pass up in the end. And so here at Lightspeed, I get to play with a team. I get to really focus on my love for doing early-stage venture, working with founders as early as possible. And I get to have and work on a platform that allows me to be what I think is like the right partner to those founders that have that really ambitious vision.

• 3:10Molly O'Shea?

  Hitting the ground running. And thank you for coming here and doing this interview right in the middle of onboarding. That's a lot.

• 3:17Speaker 01

  Of course.

• 3:19Molly O'Shea?

  Well, I know this might be more of a personal question, but I'm really curious, structurally and economically, how do you swap funds? I know that there's a lot of extensive work that goes behind that, whether it's board positions, carry, do you get your carry bought out? How does this all work?

• 3:37Speaker 01

  So on the board positions, like first and foremost, as personal a relationship as I have with each founder I work with, I have to remind myself that I was representing Kleiner Perkins on the board of all these companies that I served on. And I think with that, now that I've moved over to Lightspeed, there's this obvious question as to like, who should do that on behalf of Kleiner Perkins? And so typically, what you see in a situation like this is that those board seats do get transitioned. And my partners have been very thoughtful and very supportive of that transition and making sure that the founders that I work with are in good hands. So I'm really grateful for that. And so that's how that works. But you know, that's a very complicated process and an uncomfortable one, of course, because I just, these are not just like people I work with, but they're lifelong friends, these founders, right? So that was frankly, a very emotional experience for me and a difficult one for that reason.

• 4:20Speaker 01

  But I'm really, really grateful for how my partners at Kleiner Perkins helped me through that. So that's on the board seats. And then with respect to the carry, you can think of carry similar to the way a startup employee vests equity, right? So they're given an equity grant, that equity grant vests over some time period over multiple years. You can think of venture carry as similar. And so the reason for that, of course, is that when there is a transition like this, it's fairly objective as to like how much you vested and therefore how much you walk away with. And so that process was very clean. And, you know, again, I'm just really grateful to all my former partners at Kleiner Perkins for how supportive they were of this move for me and how helpful they were in making it smooth.

• 4:59Molly O'Shea?

  Wow, that's really nice. With $30 billion in AUM, you've joined a mega fund. Mega funds are getting a lot of heat right now. They're raising larger and larger funds. We have names like A16Z, General Catalyst, Thrive, Sequoia, and they're exiting the traditional VC world into a new category that includes PE, credit, fund to funds, secondaries. How do you and how does Lightspeed think about this new environment?

• 5:35Speaker 01

  So I think the first thing that comes to mind is like, I just think the scope of the technology investing industry is getting much, much broader. And it really kind of goes in lockstep with the way that these companies are being built and the resulting opportunity set that investors see out there. And I think what you're seeing with this group of funds that are choosing to go this route is that they believe, having been very close to these entrepreneurs, very close to the industry, that there are some pockets of the market that are just underserved. And I think their ambition lies in wanting to go and fill those pockets of the market with new products, new strategies, maybe larger versions of the same product. And so I think it's just a really exciting time in the industry right now because there's a lot of experiments being run, right? And I think with respect to Lightspeed, the opportunity we see just comes back to what I said about this new shape of company that we haven't seen before in this industry. These companies

• 6:20Speaker 01

  are going after much more ambitious opportunities. These companies tend to be much more capital intensive, and they also tend to get much, much bigger when they're successful. And I think if you kind of layer that in the backdrop of all this, it's clear that these companies are going to have a funding requirement that we just haven't seen before. And I think Lightspeed's ambition is to step in and really be a great partner to those companies because we think they can not only become really big, but drive outsized returns for our investors.

• 6:46Molly O'Shea?

  If you could share a little bit more on the structure of early-stage to growth-stage for Lightspeed, that would be really helpful.

• 6:53Speaker 01

  Yeah, so Lightspeed has teams that sort of focus on different domains, different geographies, different stages, but we all work very closely together. It's an extremely collaborative place. And so while my mandate is to focus very much on early-stage enterprise, for example, I'll spend time with my partners on the growth side if there's a company that they're interested in, that they would value my opinion or my involvement in. So, very collaborative in spite of that dispersion and those different strategies that we run. And what we believe is that there's a ton of synergies between these different strategies. So, an example would be, you often meet companies at the early stages that you end up not investing in, that you may want to invest in at the growth stages. Having that relationship and having that longitudinal perspective on these companies can be really, really helpful in terms of picking and sometimes winning as well. So, that's one example. Another example

• 7:37Speaker 01

  would be, you know, sometimes you see things play out in geographies where you've seen it play out in the US before. And so, having that base in the US and helping our partners in Europe, or in India, or some of these other places where we operate, Israel's another place, that can be very synergistic as well. And so, we want to make sure that we have dedicated practitioners on each of these strategies, but again, it's a very team-oriented approach and for good reason.

• 8:00Molly O'Shea?

  Going back to the macro perspective of these mega-funds, they're almost forming it into multi-asset managers. Is it realistic to say that VCs can continue to grow them themselves? Like, that's a really domain expertise level of investing when you're getting into credit, when you're getting into secondaries, and all these different areas that are not just taking up calls, getting coffees with founders, that sort of thing, making opportunistic follow-on checks. What's your perspective on how operationally these funds can expand with quality?

• 8:42Speaker 01

  So I think that what this comes back to for me is that I think the needs of high-growth technology companies are very unique and different from other companies. And so when you talk about an asset class like credit, for example, I think what's more important is like, how do you do credit well for a private technology company? And I think what you're seeing with these funds, Lightspeed included, is that they have this view that their core expertise is serving the needs of these companies, matching their ambition and supporting them in pursuing their vision to the fullest. And I think that to the extent these new products get introduced to the industry, it's going to be because they see an unfair advantage in their ability to deliver on that because they have this unique insight into like what these companies really need and how to serve them.

• 9:19Molly O'Shea?

  So the biggest fear and argument right now is that it's incredibly hard to return one of these funds. Karta actually just put out a report, I covered it in Sorcery, that LPs are committing less to the category, about 50% are not going to be allocating to venture anymore. More recently, on Jack Altman's podcast, Josh Koppelman of First Round came up with the Venture Arrogance Score, stating that it's going to be incredibly hard to continuously return a $7 billion fund. I'm just really curious what your perspective is on that and where you see the math mathing out.

• 9:58Speaker 01

  Yep. So I think Josh's concern is well-taken, and I have a ton of respect for him as an investor and what he's built at First Round. But I think the difference in perspective that he holds, which is a completely valid one, I don't mean to undermine that at all, that I think that this group of funds that are going this route carry comes back to this outcomes question, which is, do you believe that OpenAI, Anthropic, SpaceX are foreshadowing of what's to come? This new cohort of companies that are going after such deep and thorny problems that if they succeed, the value that they create in aggregate for society will allow them to build businesses that are just like nothing we've seen before? And I think if you start to ask yourself like, what does it take to believe that OpenAI could be worth a trillion dollars?

• 10:42Speaker 01

  Or what does it take for SpaceX to be a multi-trillion dollar business? It's actually not that hard to connect the dots into those need to believes as to what that would be, right? I mean, these companies are compounding at over 100% year-over-year in the billions of run rate. We have never seen that before, right? If you look at like the software companies that are considered truly blue chip, like the Salesforce's, the ServiceNow's, I mean, they're not even close to 100% year-over-year growth in spite of their multi-billion dollar run rate. So these are very unique beasts. And I think that if you start to believe that these companies are going to continue compounding that way, because for example, delivering intelligence to the world, or delivering universal connectivity to the world, or space travel to the world are just such unique value propositions where they can capture tremendous value and build big businesses. I just think it has to kind of reset some of your assumptions around like what the

• 11:27Speaker 01

  venture industry will produce in that sense. And so I think if you take a historic looking view, the way Josh has in articulating his point, like it's a completely rational conclusion to arrive at. But I think if you start to look forward and you say, hey, like are these companies foreshadowing of what's to come, as I keep saying, in the sense that we're going to be starting to see an opportunity set that looks like multi-trillion dollar companies. I think that's where you start to kind of understand the perspective that these larger platforms hold and why they're going this route.

• 11:52Molly O'Shea?

  We've seen time and time again that companies are staying private longer, they have the ability to, it's attractive, they don't need to go public. How is this affecting the ventures class of receiving any sort of return on it?

• 12:05Speaker 01

  Yeah, so it's for sure a double-edged sword, right? Like on one end, you have the challenge of how your early-stage investments get liquidity, right? That's a big problem for many funds. And what you're starting to see, because companies are staying private longer, is things like secondary and other alternative ways of generating liquidity for your investors are becoming more and more popular. So that's like one tension. But on the other end, what you start to see, coming back to this group of companies that I keep mentioning staying private longer, is that there is this new opportunity to, as an investor, try to participate in supporting them in that effort and capturing some of the value creation that happens while they're still private companies that would otherwise have gone to the public markets. And so I think, again, that double-edged sword point is really just on one end, you have the challenge of how you get liquid with your early-stage investments, and that

• 12:49Speaker 01

  is a real problem. On the other hand, you have this entirely new opportunity set on the late-stage side to continue bridging these companies forward so that they don't have to go public, as you said. And in doing so, you're able to capture a lot of the value that they're creating as an investor, and that's super compelling to LPs as well.

• 13:05Molly O'Shea?

  And where are they getting that capital? Is this more global pools of capital?

• 13:10Speaker 01

  Yes, I think traditionally what you've seen is the venture asset class has been dominated largely by like nonprofit and university endowments and they're wonderful long-term oriented LPs and they're still very active in the venture space. However, this new opportunity set that we keep talking about, I think it's starting to bring a much more diverse set of LPs into the industry. And so we're talking about sovereign wealth funds and let's just say a little more international set of actors that I think is becoming more and more commonplace. And I think the reason for this is one, technology is so ubiquitous and so impossible to ignore for any large pool of capital that they want to increase their allocation to it. That's one. And then two, the size of these platforms that are being built now, to some extent,

• 13:52Speaker 01

  outstrips what the university endowment and nonprofit LP pool can really support. And so, again, the industry is evolving and it's evolving in lockstep with the way the companies are evolving and I actually think that's a tale as old as time.

• 14:04Molly O'Shea?

  How do you think about multiples on these funds, returns?

• 14:10Speaker 01

  So, look, I think any investment you make at the growth stages, like you really do want to believe that you can generate multiples on your investment. And so, when you look at investment like OpenAI at 30 billion or Anthropic at 60 billion, you know, I can tell you, these are opportunities that I personally believe have the upside to generate multiples versus, say, IRR. And I think that's what you're, that's, again, what sort of speaks to why this opportunity in this point in time is so unique, is these are opportunities where you can invest 500 to a billion dollars in one of these companies and if your underwriting plays out, potentially turn that into, you know, 3, 5, 10, maybe even 20 billion dollars if these companies turn out to be multi-trillion dollar companies. And so, again, there's a lot of dilution, the capital intensity comes with that dilution and that's worth noting.

• 14:54Speaker 01

  But I think that really does speak to the unique point in time you're in and the thesis for how these later-stage vehicles that these global platforms have could pan out very, very successfully for investors.

• 15:05Molly O'Shea?

  You know, VC used to be about multi-billion dollar outcomes and now we're just going right to multi-trillion dollar outcomes.

• 15:12Speaker 01

  I'm along for the ride, right? It's an exciting time and, I mean, candidly, I think we all wake up every day just feeling, we should just feel gratitude that we get to be in the primes of our career during this time where we have these mega trends like AI, like robotics, like space, and even defense playing out before our eyes in such full force. And, you know, again, I think being in the arena while this is happening is just like, it's a really, really fortunate position to be in for all of us.

• 15:39Molly O'Shea?

  Yeah, gotta be in the arena. So there are counter arguments to these fund sizes and the incentives to raise bigger and bigger funds. A lot of that has to do with management fees. We had a hot take on this post by Josh Copelman. Shout out to Hunter Walk, big fan. Hunter Walk says, "This is wrong, wrong math. Should be about the fees the GP collects while storytelling to keep the dream alive before the results are conclusive." Are we stuck in a bubble of fees? Like, how do you see that argument?

• 16:10Speaker 01

  I think it just comes back to this belief that I carry that these companies that we're seeing are, they're alien beings. Like, we've never seen anything like this before, and these companies are growing at rates and at levels of scale that we've never seen before. And all that together, to me, just leaves me in this position where it's just hard for me to see how investing in those companies right now will not lead to really compelling results for investors. And I think that's where, you know, you could see just tremendous gains, right? And I think ignoring that, that viewpoint sort of downplays the reality that I see, which is that these companies are like nothing we've seen before and going to be multiple orders of magnitude more valuable than those truly blue-chip venture outcomes of the past five to 10 years.

• 16:55Molly O'Shea?

  For your role specifically, why do you think it's important to stay true to the early-stage side of this?

• 17:01Speaker 01

  So, look, we can talk about these global platforms and how, you know, they're playing later and later stage and all that, but none of this matters if you don't have a compelling brand that I believe can only be forged at the earliest stages. So typically, when a founder is thinking about raising, you know... An absurd sum of money and having a fund like one of these platforms lead that. They're asking themselves like, okay, do I feel like I want to hitch my company to this firm, to this firm's brand? And what they want is they want a firm that has an entrepreneurial spirit to it, that is known for company building, that is known for helping early-stage companies bring new ideas to light, like that, that, that really is like what I find founders really look for, even at the later stages. And I just don't think that you can really carry that identity unless you are truly

• 17:45Speaker 01

  competitive and active at the early stages. So that's one point. I think the other point is that there's still, I mean, we can talk about how the industry's changing, but there is so much opportunity to back these companies at the early stages. And to downplay that, no matter how large you are, is just, to me, totally unmoored from reality. And two, and three, I would say, the, uh, the perspective and the empathy that you have to maintain when working with entrepreneurs, it's just really hard to maintain that empathy unless you're really understanding what it's like from beginning to end in their journey. And the only way that you can really understand what's, what it's like in the beginning is if you're partnering with them then. And so I think that that spirit you have to have as a venture firm is really only maintained by staying close to these companies at the early stages and being active in that area.

• 18:28Molly O'Shea?

  What does it take to win a lead position in one of these competitive companies?

• 18:33Speaker 01

  Yeah, so this is an interesting one in the sense that there's, I feel like there's this like set of memes going around, around how like the, the way that founders choose is, you know, whoever takes them for a ride in their helicopter, or brings them to the Warriors game, to the floor seat tickets, or, uh, you know, takes them to that Michelin star meal. And, you know, these parlor tricks, they, they happen, for sure. I've seen them out there and it's, it's, it's fun. And I think there are some founders that, uh, that respond favorably to that. But in the end, what I see, and this kind of comes back to why I, I really believe that picking is actually the most important part of the like, see, pick, win, work, uh, kind of, you know, mantra in venture, is the people that win these really competitive rounds, the partner that ends up being the, the, the one of choice for the founders, it's the one who's been putting the legwork in for.

• 19:17Speaker 01

  Well over a year, developing deep insights on the business, developing a deep relationship with the founding team, and ultimately being someone that they just want to have in their life, right? And wanting to have someone in your life is not just about like being smart, it's not just about being nice, it's about like really having that deep connection with the founders, both in terms of understanding their vision, understanding who they are as people, and therefore like how to support them both in their vision and how they can develop into the founders that that company will need to be successful. And I just see this time and time again, it's the person that did that work. There's plenty of strong brands out there, everybody has a different view of who's the best and who's the second best and so on. But the common thread that I see in these really competitive processes is that one person put in the work to develop that deep, deep relationship at one of those firms,

• 20:01Speaker 01

  and that is the one that they tend to choose.

• 20:03Molly O'Shea?

  Can we go deeper into that? Can we share one of your examples, maybe?

• 20:07Speaker 01

  Yeah, let's see, what would be a fun example?

• 20:10Speaker 01

  Yeah, there's a recent investment that I made before leaving Kleiner Perkins that, of course, I'm really excited about.

• 20:16Molly O'Shea?

  Yeah.

• 20:17Speaker 01

  And it hasn't been announced yet, so I can't name the name of the company, but I think it does speak to this, which is, this company is building in, let's call it an AI app, and it was in a space where it had much competition, and given the competition was all fairly early in its journey, in the beginning, it was really hard to figure out like who was the right team to back and who was the right product and so on. And so, we had a chance to partner with this team much, much earlier than we did, at a much, much lower valuation. And we were a bit hamstrung by the fear of picking the wrong company, because we had a lot of conviction in this space. And so, we ended up spending a bunch of time trying to figure out who that company was and who those people were. In the end, it looped back to this company and this team.

• 20:58Speaker 01

  And I think what happened was, we unearthed that perspective sooner than the market did, so to speak. And we were able to spend a lot of time with this founding team, getting to know them, spending time with them as human beings. articulating our view on why we think they're better positioned to win in the market and what they need to do to capitalize on that than the competition. And spend a lot of time also just kind of hanging out. And they eventually decided to raise in spite of us trying to preempt. They were, they were very careful to not let us do that because they wanted to run a good process. But when they did run the good process, the rest of the field kind of, you know, chased the heat. And we were just there. We were there, just, we know them deeply. They felt like we really understood them. They felt like our team was, was really rallied around helping them in the ways that they needed.

• 21:42Speaker 01

  And, you know, it's never an easy choice, but it went our way. And I think it went our way because of that time that we put in, which came down to picking that company maybe earlier than our competitors did and putting that work in.

• 21:51Molly O'Shea?

  Yeah, relationships, trust, putting in the work.

• 21:54Speaker 01

  Business is personal. And I think anyone who denies that is, is probably at a disadvantage.

• 21:59Molly O'Shea?

  You have a little bit of a hot take on this, though. Why do you believe picking is ironically more important than winning as a lead investor?

• 22:10Speaker 01

  So I think coming back to what I said, I think it takes to win in these very competitive processes. The, the, the limiting factor is really, who do you choose to do that work with, right? You cannot do it with 20 different companies at once. And so there is this element of taste and picking that goes into that, that I think you actually have to take very, very seriously. So like one part of that is like, okay, what are the few best ideas I have right now? Who are those really, really promising founders that I believe deeply in and think have tremendous potential that I'm going to go and spend that time with? It doesn't always work, right? You don't always build a great relationship. Sometimes you bounce off each other. And I think having the self-awareness to also say, hey, like, maybe we don't vibe the way I'd hoped we did, and that's okay. I'm going to go move on to another idea is, is another part of picking. The other part of it, though, is sometimes you meet another company and that company

• 22:55Speaker 01

  turns out to be extraordinary for reasons you didn't expect. And I think having the flexibility and the open-mindedness to then kind of reprioritize that and, and really pick that one to spend time with is, is a really difficult thing to do because of the sunk cost fallacy that goes into all the time you spent with others. But I think you have to kind of accept that the world is a super dynamic place and our job as venture investors is to partner with the best founders. And so picking who you do that legwork with really comes down to how well positioned you are on the right companies when those processes come. And the best founders want to run a process. They want a market price for their business and they're also humble about the fact that they don't know until they know who the right person is. And so a lot of the time you put that work in and then they do run that process, but hopefully in their heart, they know you're the person that they really want to work with and that's just been my experience.

• 23:41Molly O'Shea?

  What kind of advice would you have for founders that are running through these really fast processes with multiple funds?

• 23:48Speaker 01

  So I think Parker Conrad, founder of Rippling, said it best, which is that there's often this concept of like, oh yeah, choosing an investor is like getting married. And he disagreed with that, I think, in a very directionally accurate way, which is to say, it's actually a lot more like picking a general contractor.

• 24:04Molly O'Shea?

  Okay.

• 24:04Speaker 01

  Because if you marry wrong, it's tragic, but you can get a divorce, right? You can make a change. Once you pick a general contractor, and I know this from personal experience, having remodeled a house with my wife a couple of years ago, you are stuck with that person. And this is more similar to what it's like working with an investor board member in the sense that if you realize you made a mistake a few months in, there's not a whole lot you can do about it. You can complain, maybe you can lobby for the firm to switch out another partner, but it's just not easy, right? And so I think the marriage analogy is sort of broken in that sense and it is more like a general contractor, as coarse as it sounds. And so I guess coming back to the question, what I would say there is, in these rapid-fire

• 24:45Speaker 01

  processes, I just think it's really, really hard to develop that deep conviction in a person that you're sure enough that they're the right person for your business. And so what I would tell founders is, don't not take investor meetings because you're not raising. And the reason for that is because you can do it in a contained way that allows you to understand what these people are about and who they are and do you vibe with them or not. And I think the problem with these like shotgun processes where, you know, the founder's saying their head's down and they don't necessarily want to spend any time with investors until they're in that fundraising mode, is it's just really hard to, at least for someone like me, arrive at that conclusion that I know I vibe with and trust with this person. And so my advice would be, put that time in, do it in a measured and contained way. And do it because you know that the choice you're making of who your lead investor is

• 25:30Speaker 01

  at Series A or Series B is a really, really permanent choice. And it's one that's going to impact your happiness and also, of course, the trajectory of your business.

• 25:38Molly O'Shea?

  How do you think about board seats for like precedes and seeds?

• 25:42Speaker 01

  Look, I think boards are a construct designed legally to ensure that everybody stays out of jail, right, in a company. And I think that's for good reason because there are a lot of things that can go wrong if there is no governance in a startup, right? That said, it's not clear to me that that construct needs to exist at seed and pre-seed in a way that necessarily like makes the company better off. And so typically what I see is that there are cases where like the founder wants to form a board, they want the investor involved at seed, and that's fine. Like I think I'm, you know, our job is to adapt to the needs of founders, like fundamentally so. But in general, typically, I think the lead seed investor can be really, really deeply involved. And then as the company kind of turns the corner to a Series A, that's when I think

• 26:25Speaker 01

  like memorializing that construct in a bit more of a formal way is probably healthier.

• 26:32Molly O'Shea?

  And then in terms of pricing for early stage, how do you think about valuations in pre-seed and seed rounds?

• 26:42Speaker 01

  So my former partner, Mamun Hamid, has taught me a lot. And one quote that he reminds me of often that sticks with me here is the best companies are always expensive, right? And the reason they're expensive is because they are truly exceptional. And because they're so exceptional, many people want to work with them. And therefore, the market price to work with those companies is higher because implicit in the belief that they are exceptional is that they are going to produce an outsized outcome, right? So I think when it comes to seed and pre-seed, like how this rears its head is there are, of course, types of founders and types of, you know, let's just say, company structures that appear very consensus right now to certain types of investors. Like maybe they worked at a certain place, or they studied a certain thing, or they have certain core strengths. And again, I think like it is a market.

• 27:27Speaker 01

  You have kind of many bidders and many people taking a view on price, but ultimately it's like the one person that takes that most aggressive view on price that in some cases can sort of instill a sense of like market value to the founder. And so I think what you're seeing out there now is that there are A lot of investors who want to be very active at seed and pre-seed and some of those investors are applying a strategy of being aggressive on valuation because they think that's how they're going to get the access that they look for and they'd rather be in the right companies than the companies that are affordable. And again, I think that this this can become untenable very quickly for these smaller funds where, you know, investing at fifty, sixty, seventy caps is you know, pretty hard to imagine how you make a lot of money as an, you know, a thirty million dollar fund, for example.

• 28:10Speaker 01

  And so, again, I think supply and demand here is, is, is the driver and we're gonna have to kind of see how this shakes out, but it's a, it's a very tricky environment right now because as you know, like the the larger funds are, let's just say, much more open minded at the early stages on price because they're thinking more about, you know, how do we work with this company all the way versus like, how do I get as much ownership now as I can and, you know, hand it off to the next round of investors. And so, this is not a new dynamic, but I would say that like, it does feel to me like we're a little bit back in the times of twenty twenty, twenty twenty one and what I, what I think is different this time is that we have some very fundamental trends that I think are much more interesting and durable than, say, remote work, right? Like, I think AI is much more interesting than remote work as an investment theme and

• 28:54Speaker 01

  am I willing to take more risk on companies that I think are going to be handsome beneficiaries of AI for sure, right? And I think that's sort of where it could be different, but again, like this is a it's frothy out there, especially at pre-seed and seed. I'm not going to deny that.

• 29:10Molly O'Shea?

  What's interesting is I've been discovering a little bit of a paradox in the multiples from early stage to growth stage between tier ones and tier twos. Tier ones, mega funds are more apt to pay higher prices of the early stage and be more disciplined on the later stage where it's the flip for the other side. Have you been seeing that? What's your experience with it?

• 29:34Speaker 01

  Sometimes I struggle with this tier one, tier two thing because beauty is in the eye of the beholder and everyone has different perspectives on who's in each group.

• 29:44Speaker 01

  But what I will say is that there are, there are definitely certain funds that come to mind that I won't name who have decided the strategy that they're going to employ is to, to use valuation as a lever to win and it's not a crazy strategy, but it also puts a tremendous amount of stress on your returns if you don't pick right. And so,

• 30:03Speaker 01

  This is not a new strategy. There are actors in the system that are employing that strategy right now. And it's hard for me to necessarily delineate between tier one and tier two. But I will say that there are absolutely firms out there that, again, use pricing as a blunt instrument to win. And I would also say that the best founders don't typically respond very positively to that. I think they're really thinking more about like, what's the right price for my company? Rather than like, what's the highest price I can get? And I think that sophisticated founders arrive at their own conclusion on that. And they work with their investor of choice to find compromise there and say like, hey, this is why I think we should raise at this price. This is why I think we should raise this much money. And I think coming at it from this place of what's best for the company, I think that's what the best founders and the best investors do. And that's why they often find each other.

• 30:46Molly O'Shea?

  You mentioned this word earlier, and this is a profound word that I've been hearing over and over again. It's a word called taste. So I think Marc Andreessen actually just said VCs will never be replaced because they have taste. And the job is taste, psychology, and chaos tolerance. So what exactly is taste? And how do you define it for, how do you identify it for founders?

• 31:15Speaker 01

  So I think, when I think about taste, like I'm reminded of this Steve Jobs kind of mantra that aesthetics are much more than aesthetics. And what he means by that is that the way things look implies so much more than just like what you see. And I think taste kind of bleeds into that in the sense that like with founders, you kind of have these different dimensions of taste that I think are really, really important. And the great ones tend to possess, right? Like first you have this, this sense of like aesthetic taste, which is like the way things look. You have this sense of consistency. So how to apply that aesthetic across every touch point that any stakeholder in the world is going to have with your company? So how things look online, how things look in person, and how things look in your product, how the people that represent your company look and come off to others. And I think being able to like gel that together into something cohesive is really, really hard to get right,

• 31:59Speaker 01

  but also really profoundly important if you do. There's also product taste, which is like, how do I anticipate the needs of my customers and give them what they want in my product before they're really telling me they want it, or in some cases that they don't even know that they want. So that's another example. And then there's also this example of like, how do you, how do you make really complicated things simple that I think is another indicator of really high taste. And I think that the founders that are able to do those four things really well are, in my opinion, high taste founders and people that I really strive to work with. And I, I understand it sounds a bit elitist to keep throwing this term taste around, so I'm trying to explain it in a more precise way. But I can tell you that like, my, you know, my, my partners and I and other, other venture investors and I, we often have this conversation about that's a high taste company. And, and I think it's a high taste company when you see those

• 32:44Speaker 01

  four dimensions, when you see mastery along those four dimensions in the founders and also the team. That's where it starts to get really interesting, is if they can push that taste down to their team so that it carries on as the company gets bigger and remains consistent, that can be really, really powerful. It just attracts more resources, it attracts better talent, customers think more, are more intrigued by and, and, and respect what you're doing more. And so all that to say, taste matters.

• 33:08Molly O'Shea?

  Inversely, how can founders determine taste in investors?

• 33:15Speaker 01

  I think the simple answer is the companies they choose to work with, the people they choose to work with, and what those people say about them, which is are these people that understand my mission, understand my vision, and have been instrumental in helping me move it forward. I think that is a high taste investor.

• 33:32Molly O'Shea?

  So across these categories, AI has become the best category. Everyone's really interested in it. Everything is AI. Some might call it a trend, some might call hard tech and space tech a trend. How do you think about these categories and trend following? Do you think that's part of the game? Do you think it's like survival of the fittest, that everyone has to flock to it? Or is that just part of venture capital and following innovation?

• 34:01Speaker 01

  So I think this kind of bleeds into the question of like, should one be investing behind a thesis or not? And the way I think about this is I'm more asking myself, who are the smartest people I know? And what are they attracted to? What are they deciding to spend the next 10 years of their life on? If the smartest people I know are going and spending the next 10 years of their life on space, then I'm very interested in space. If they're doing it in AI, I'm very interested in AI. And given my background as more of an enterprise software investor, like a lot of those smart people I know have just gone completely all in on dedicating their lives to bringing AI to the world in some way. And so for me, it's very simple that like, that's where we should be spending time for that reason alone. And I, and I think this also just comes back to like, people-driven versus thesis-driven

• 34:46Speaker 01

  investing, like I said. And there are certain investors who like to spend a lot of time developing theses and, you know, they write memos about a space and they've talked to all the different companies in the space and they've made maps and all these other things that kind of go into that work. But ultimately, none of that matters if the best company in that space is one that doesn't have a very capable founding team, in my opinion. And so what I try to do is use thesis-driven investing to inform my views, to allow me to show up prepared to interactions that I have with the best founders and have a point of view on how their market opportunities might play out. But ultimately, it's a flashlight to go and figure out like, are there great founders in this space? And if there are, and I like the thesis, great. If not, you have to move on to the next thing. And I think the big mistake that some investors make, especially earlier in their career,

• 35:30Speaker 01

  because thesis-driven work is, is a little bit easier to do than say, developing relationships with people, which takes a lot longer, is they tend to go and find the best company that fits their thesis or is on their market map and they invest in that. And again, it's just like, comes back to this cliche that it's all about the people. And I've just learned this viscerally and I actually think that it is a lesson that is really, really hard to learn unless you've, you've, you've felt it, which is you've, you've worked with people who just couldn't get the job done or you've worked with people that just have this innate ability to really do impossibly hard things.

• 36:00Molly O'Shea?

  You've invested in companies like Browserbase, Together AI, Windsurf, Cartesia. What have you learned along the routes of going deeper into enterprise SaaS?

• 36:12Speaker 01

  So I think what's interesting about software investing, and I would say that there are some, there are some people out there that say, hey, software's so boring, right? So what do I find interesting about it? What I find interesting about it is that it really moves in lockstep with new technical sea changes. And so, for example, when the internet came about, SaaS became possible. And you had this entirely new frontier of innovation that came around from people building software as a service products. And that was obviously very lucrative for many years as, for venture investors. You had mobile, which created this entirely new interface for people to consume software on. And that led to some very big consumer outcomes, and it certainly led to some large enterprise outcomes. You had cloud, which was another, another thing that really just created this entirely new frontier of, of infrastructure software that needed to exist, that, that enterprises could, could wield.

• 36:57Speaker 01

  Now you have AI, and AI might be the biggest that we've seen perhaps since the internet in that sense. And so what I would say there is it is now possible to understand kind of how these new technology waves are playing out and ascertain what are the opportunities that exist in software. And that's what I think is really interesting. So I think back to, you know, this group of companies that you mentioned, like I would say that each of those companies is, has just an incredible CEO behind it. And they're very, each of them is very different. Some of them have academic backgrounds, some of them have operator backgrounds, some of them are engineers, some of them aren't. But what I would say is each of those companies that you mentioned has a CEO behind it and a founding team behind it that is just super uniquely spiky in one way or another. And so again, it just, that, that really speaks to the lesson that I've learned, that

• 37:40Speaker 01

  if this is just really about finding those unique people that have that dog in them to go and take that vision and, and just do what it takes to make it a reality. And there's just so many different ways to succeed at that. And I think, once again, that group of founders you mentioned, each of them has taken such a different path in building their companies. But the common thread among them is they're, they're, they're special and they're just so deeply driven and capable. And I think that's what matters in the end.

• 38:02Molly O'Shea?

  How do you go about sourcing?

• 38:05Speaker 01

  It definitely helps if you do good by the founders that you work with and those founders turn out to be successful. And that takes time, but I can tell you that like when that starts to happen, the game slows down a little bit to kind of use a sports analogy and I'll tell you why, which is the next wave of great founders, when they think about going and starting their company, they go and ask the founders that they look up to what they should do, like, hey, is my idea good? Am I thinking about this the right way? Am I, am I good enough to go and do this? And then if I am, like, who should I go talk to about raising money? And again, if you've done well by your founders, they will more often than not say, hey, you should go talk to this person, right? You may not be the only person that they suggest, but you will be on that list. And so I think it is very, very critical for investors that are later in their career

• 38:47Speaker 01

  to just maintain a high NPS with the founders that they work with, which means, you know, treating them as human beings, like continuing to be obsessively supportive of them and helping them build their companies. And if you do that right and, and they say nice things about you, that creates a really, really obvious way to, to find the next wave of great founders. And obviously there's a bit of a filtering mechanism there and that like if good founders are coming to the founders that I believe are great and those founders are saying you should talk to these people, that goes a long way. But make no mistake, all the best venture investors, even those that have been doing this for a decade or more, they spend a lot of time just creeping around the internet, looking for new people, looking for new ideas and sending cold emails. And I do that every day. And I think the moment you stop doing that is the moment you've probably grown too complacent,

• 39:32Speaker 01

  no matter how busy you are, no matter how, how many boards you're on. And what I tell myself is that the moment I lose the desire to go on Hacker News or go on Reddit or go on X and just figure out what's going on in the world and what people I don't know that I should get to know, that's the moment that I should probably hang up my cleats and move on because I just don't think you, you want it bad enough to be great at this if you're not willing to do that kind of work.

• 39:54Molly O'Shea?

  Totally agree. And that's why I have to thank all of the GPs that listen to Sorcery. We have a couple of companies that have raised rounds through coming on, so it's great. That's why I started this. It's like you always have to be on guard. You always have to be looking out for things and I have a reason every week to aggregate all the top companies in one place and make sure that I'm keeping my mind sharp. You gotta keep your mind sharp.

• 40:19Speaker 01

  Exactly.

• 40:20Molly O'Shea?

  I want to shift over into something a little bit more spicy, so we're wrapping up a bit. But why do you think ASI is already here?

• 40:29Speaker 01

  Look, for me, I think ASI is here in narrow pockets, right? Like, when I use deep research, like, I've seen the future. It's just absolutely incredible. It, my eyes pop out every time I get back a report from that product. It's really, really special. I think what you see happening in code generation and some of these other more mature use cases for LLMs, like, I feel like I'm seeing the future every day. And so intuitively to me, it feels like we have this now, this like higher power that is like super intelligent. And so therefore, like, ASI for me is here in certain areas. And it's not to say that these LLMs don't have problems and that the AI doesn't have like holes in its ability to do things that we do well as human. As Mark said, you know, venture's not, not under threat yet for, for good reason, right?

• 41:11Speaker 01

  But I, but I think what, what I mean to say by, by making the bold statement that ASI appears to be here in some sense is that I think if progress were to grind to a screeching halt, we still have what I believe to be like the most incredible economic opportunity of our lifetime in front of us. And I'm very happy with what we have today. I'd be very happy if the next 10 years was about taking what we have today and applying it to the world and bringing it to consumers and businesses and every nook and cranny of their lives. But I also think it's going to keep getting better. And that's obviously very exciting, too.

• 41:42Molly O'Shea?

  What do you, like, what do you think the biggest impact will be on?

• 41:47Speaker 01

  Well, I think now that we have models that can, can reason, so to speak, really where it clicks for me is that, like, in my mind, like, when I, when I have a question that I'm trying to answer, I, I sort of formulate an answer and then I, I predict the next token to a degree, right? These models that can reason, what they're doing is they're, they're, they're able to test thousands and perhaps more than thousands of concurrent answers at once and then decide what the best answer is. That feels pretty superhuman to me, right? And so I think just scaling that paradigm alone is incredibly exciting. I think we're already starting to see how some of these new scaling dimensions are allowing us to like make these models good at math and other like verifiable fields, you know, computer programming being another one, or physics. And so I just think the scope of problems that these models are going to be able to

• 42:32Speaker 01

  address for us is, is going to grow much, much wider. And it's just so hard to really reason about like what that means for society, I think, at this point, until you see it. Um, you know, for example, like five years ago, if we were, if I was to kind of look ahead and be like, this is where we're going to be with AI, like I would have been wildly wrong. Um, I just think it's so hard to predict the future in that sense. But I think what's going to start to happen is that like more and more of the knowledge work that we do as human beings in the world is going to be something that these AI can do. And if this AI can do that knowledge work, it's going to make humans a lot more productive and hopefully free them up to live better, more interesting lives and also hopefully focus on the more interesting and rewarding parts of their work.

• 43:11Molly O'Shea?

  How do you think about humanoid robots? Do you want one?

• 43:16Speaker 01

  So I think I'd want it to be cute, like Wally, and then I'd want it in my house. But if it was like a, you know, a big optimist, I'd probably be a little intimidated by that. And, and so I think there's a lot of interesting questions hanging in the balance around like arms or humanoids, but at this point in time, it's much, it's much easier for me to see how there'll be a Wally-like robot sitting to my left on this couch than say some jaw of life that's like folding my laundry. But I do think that this is like a little bit of a religious debate at this point. And there's a version of this actually happening kind of in AI agents as well, which is like, will the agents browse the internet like humans do, which is sort of the humanoid side of things? Or will we be changing how the internet works so that agents can can interact with it natively?

• 43:58Speaker 01

  And so I think there's like sort of parallels between those two arguments that are happening right now and it's, it's really hard to say how it's going to play out. And I think the answer will probably be both. But I still, I still stand by my desire to have that, that cute little robot in my house rather than the arm.

• 44:12Molly O'Shea?

  I'm sure we can get you one. We'll find you one.

• 44:14Speaker 01

  Great, thank you.

• 44:15Molly O'Shea?

  So as we wrap up, I usually like to end on a positive note, as if Wally isn't positive enough.

• 44:23Molly O'Shea?

  What are you most looking forward to this year?

• 44:26Speaker 01

  I mean, I think just feeling so grateful to be embarking on this new chapter at light speed and have a chance to get up to speed with my new partners, work with some new companies and be a part of charting hopefully the next few decades of this amazing firm.

• 44:42Molly O'Shea?

  Fantastic. Well, thank you so much, Bucky. It was a pleasure.

• 44:46Speaker 01

  Thanks for having me.