Teddie Wardi

SF VC Takeaway #2: Pricing expectations, performance bars, and what’s actually getting funded. One theme that came up repeatedly in SF was how far pricing expectations and performance bars have shifted, even compared to just a few years ago. A few things investors kept anchoring to: 1️⃣ Median Series A valuations are higher than their 2021 peaks, but fewer of them are getting done. 2️⃣ Capital is being concentrated into fewer and fewer companies (and lots of capital!) 3️⃣ “Good” progress is no longer enough and the bar for standout performance has moved in an AI-native world So what does “top performance” mean right now? One investor told me that top quartile seed companies in their portfolio are going from $0 to $2M in ARR in <12 months. Outside of pure traction numbers, a few other themes that came up to describe "top performance": 📈 Explosive early revenue ramps (or a very credible path to them) 📊 Strong velocity and momentum for 2 quarters in a row, even if the baseline is small. 🚀 Clear signals of category leadership, not just product-market fit. Sometimes shown by either domain expertise, speed of product optimization, or by lack of competition in the category. This creates a counterintuitive dynamic where it can be easier to fund a company with strong pedigrees in a hot space and no traction yet than a company that went from 0 to $1M ARR at what used to be considered a rapid pace. Pricing today is driven by trajectories, not moments in time. We used to say investors invest in lines not points; I think that's more true than ever now because crossing certain milestones doesn't carry as much influence as it once did. Finally, investors still say that valuation matters, but many of them are acting differently. Pace and belief in category-defining companies really sets the price; while slower growth gets scrutinized rather than discounted. One silver lining in the camp of durable growth: Series A rounds are happening so fast that many companies don’t yet have meaningful history of retention data. Large bets are being made on velocity before the durability is proven. Several investors told me the same thing: we may soon swing back to a market where retention, not growth, becomes the defining metric. Let's hope so. I'll share my third SF VC takeaway tomorrow!

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To my dear VC friends, We are all very excited about the growth rates of AI companies. But when you declare "Triple–Triple–Double–Double–Double (T2D3) is dead," you create chaos in your own firm and with your LPs. And your IR team pays the price. 𝗛𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗽𝗿𝗼𝗯𝗹𝗲𝗺: IR teams just spent 24 months explaining LPs that albeit their portfolio lack liquidity, the fundamentals of their existing portfolio companies are solid, etc... LPs committed hundreds of millions based on that narrative. Now the partners, from the same firm, are saying that model is outdated.... 𝗧𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁? Confused LPs asking: - "So what are the paper returns marked at 3x MOIC on your Saas companies really worth ?" - "Why did you say that the existing portfolio companies were doing well?" - "Why should we trust the new narrative?" - "What else will change next quarter?" IR teams scrambling to explain: --> Why yesterday's pitch is today's problem --> How the new model is totally different (but also kind of the same) --> Why this pivot strengthens the strategy (somehow) 𝗧𝗵𝗲 𝗿𝗲𝗮𝗹𝗶𝘁𝘆 𝗻𝗼 𝗼𝗻𝗲 𝘄𝗮𝗻𝘁𝘀 𝘁𝗼 𝗮𝗱𝗺𝗶𝘁: T2D3 isn't just a growth model. It's a framework LPs have internalized for 10 years on how to evaluate B2B Software companies. They use it to model returns. They use it to compare companies and portfolios. They use it to explain venture investing to their boards and ICs. When you suddenly declare it dead, you're not just changing metrics. You're breaking the narrative that built trust. 𝗧𝗵𝗲 𝗳𝗮𝗹𝗹𝗼𝘂𝘁: → Every fundraise gets harder → LPs hesitate on re-ups and do more due diligence on the portfolios → New LPs question your consistency → IR teams on calls with LPs 10 hours a day and burn out managing the confusion 𝗧𝗵𝗲 𝘀𝗺𝗮𝗿𝘁𝗲𝗿 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵: Evolution, not revolution. Show how the market is expanding. Explain why multiple models can coexist. Build on what LPs understand, don't demolish it. Because here's what matters: LPs need clarity, not contradictions. They need consistency, not pivots. They need to trust your story won't change with the wind. The future of venture depends on this. You can celebrate new growth models without torching the frameworks that built LP confidence in the first place. Your IR team will thank you. Your LPs will trust you. And your next fundraise might actually be smoother. ❤️

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The Google and NextEra partnership makes perfect sense. For years, the model has been: 1. Find a site. 2. Ask the utility for power. 3. Wait for them to deliver or build it. 4. Complain when they're late and over budget. That model is broken. Utilities can't keep up. (and it's not their fault... "keeping up" with demand is an impossible task in this case). This partnership flips the script. Google isn't asking for power. They're bringing their own. They're partnering with the largest renewable energy developer in the country to co-develop entire campuses. Land. Power generation. Interconnection. All bundled together. This is vertical integration. It's Google taking control of their own destiny. And it solves the biggest problem in the industry right now: ...Who pays for the infrastructure? NextEra's CEO said it himself: hyperscalers need to "bring and pay for their own power generation." That's exactly what this deal does. It's faster. It's more certain. And it doesn't stick ratepayers with the bill. This isn't just another PPA. This is the new model for the future of data center development. My question is... Will this just be a behind the meter design? Or will they connect their power generation to the grid? Comment below!

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If you care about out-innovating China in the AI war, you need more efficient chips, not just brute force buildout for hot, inefficient chips and architecture. That’s why DCVC backed Mythic — up to 1000x the SWapC of NVIDIA’s 2028 roadmap for real time embedded and datacenter compute. Oh, and by the way, *made on American fabs with zero Taiwan supply chain dependency*… We can’t pour more concrete than China, and our grid interconnect workers don’t slave away under threat of being murdered for their organs. We need smaller, cooler, faster, smarter, more power efficient chips. Mythic is proving that *today* with live silicon.

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