Org charts are more like funhouse mirrors than many people realize, providing a view of the truth but with multiple distortions. If you assume that all leadership is hierarchical, or everyone with the same title has the same influence, or that the number of people you manage is directly correlated with your importance, well, the way it works in Boardrooms, corporate offices, and hallways after hours can be dramatically different. During my days at Google there were multiple examples of “Eric, Larry and Sergey” whisperers who could help bless or kill a project without having a SVP title. There were senior engineers scattered about without any teams but who could look at your proposal and tell you whether the architecture would work or not. And there were culture carriers who served as weathervanes for morale, as well as being weather makers themselves.

These lessons never left me – I experienced them positively and sometimes less productively as a product exec there. Working with startups today via our venture firm Homebrew, they inform the guidance provided to the founders as they build and scale their own companies. And equally I try to remind people within those teams, especially the ones that are so impatient to get to a certain title or headcount responsibility that they can be their own worst enemies making career decisions, that Span of Influence is Not Limited to Span of Control. Don’t run to a worse startup just because you can get a VP role there, or OTOH stay somewhere uninteresting out of concern you’ll have to ‘take a step backwards’ [title/managerial-wise] applying for other positions. Again referencing my Google years, there were a ton of early business and operations team members who despite their seniority, came on in IC or lower-titled management roles after understanding the opportunity. You know what happened? They succeeded wildly and got promoted quickly as we scaled, ultimately with a much more satisfying career arc, and definitely more lucrative, than if they had said, nah, that’s beneath me.

As an aside, Mayor Lurie here in San Francisco has been an excellent positive version of this during his first year on the job compared to what I was experiencing on the ground prior. The Mayor’s office does have structural challenges given the Board of Supervisors governance responsibilities and all the various Commissions. GrowSF has written why this is a negative for our city, especially in light of the work to be done in public safety, housing development, and rezoning. Despite that reality, Lurie seems to be an energetic and present problem-solver, giving off vibes of accountability and effort, even if the solutions aren’t fully under his office’s authority. We’ll see if this hopefully can be precursor to collective action and sustainable progress.

Some of you should skip this post. It falls into the ‘VC reminiscing about time with a startup after a successful outcome was announced,’ specifically software quality startup Graphite being acquired by code generation startup Cursor. Don’t get me wrong – it’s definitely better written and less aggrandizing than the most traditional versions (you’re not going to hear how ‘we’ built this company together), but still, it’s in this category of essays. I just don’t want anyone to be surprised – like when there’s a cute guinea pig on IG and you forget for a minute that they’re really just rats with a blowout.

With that warning done, yes, we led the seed round for Graphite in early 2020. I met Tomas first via a mutual, and then all five of us (me, Satya and the three Graphite cofounders) all did some quick conversations in various combinations. Satya’s feedback to me was memorable – something along the lines of ‘please get them a termsheet before other people realize how smart they are.’ And we did. It was a wonderful almost six years together and I know the relationships are going to outlast the transaction. I learned a ton from them about building in the developer ecosystem and from my fellow Board members, Peter Levine at a16z and Christine Esserman at Accel. While there were lots of microlessons, three particular memories are most personally indelible and I’d say if any one of these hadn’t happened the company would not have become what it did.

Took the Punches and Iterated to Durable PMF

Graphite started out as Screenplay. And while ‘code quality’ was always a true north mission statement for them – the reason the company was founded – it took some reps to find the best product manifestation of this goal. These weren’t pivots, but they did require first principles thinking, some intuition, and the confidence to leave something good behind in the search for great. In particular, before what we know today as Graphite was launched they had a mobile QA and release management tool deployed with customers. Given the frothy funding market at the time and the quality of this team they absolutely could have ‘forced’ this version of the company to a Series A. That is, an adequate set of performance curves, a bigger story, and pedigreed cofounders would be enough for a next funding round, and then with that capital they could hopefully figure it out from there. But Greg, Merrill and Tomas knew this wasn’t the way the best version of Graphite was going to be constructed. So they shut down that effort and repurposed some of the code – and a lot of the scars – into a new direction.

As mentioned earlier, going into the seed funding we had ZERO questions about the cofounders intelligence, ceiling, or relationship with one another. We did spend time – with them directly and via backchannels – to see if they could take a punch. If their first idea didn’t work would they be so shell-shocked as to run back to a BigCompany with their tails between their legs? Would the threat of failure be motivating or send them into denial? Would they have enough of a framework or guts to look at something as say ‘this can be ok, but we can do better?’ They did.

We still stress that seed is not a funding round, but a phase. And that most importantly it’s a time for experimentation and learning, not just brute-forcing an up and to the right curve. Or even worse, mindlessly doing what you put in a pitch deck just because that’s what you thought a year ago. The combination of bigger rounds and new/nervous VCs often asks founders to speedrun this process, but the best companies operate at the intersection of urgency and patience. Graphite threaded this needle.

Started During COVID and Back to IRL Quickly

Our conversations with Graphite started right before COVID 2020 lockdowns. It was a very weird time. I had at least met Tomas IRL but otherwise things became Zoom relationships quite quickly. As three close friends the cofounders were able to spend time together in NYC and began to assemble a small team virtually but not remotely, but still there was eagerness to get back to IRL ASAP. And they did as soon as it was advisable.

During this period I got to meet – mostly over Zoom, or in person outdoors – about the first ~20 hires they made. Often as part of the ‘close’ process once an offer had been made but sometimes earlier. It felt really wonderful to be included in this manner – the Graphite team appreciated the help (it was at their request) but more importantly it let me get a feel for the company as it started to grow. So many other startups at that time were sort of black boxes. Who knew where people were with their fake zoom backgrounds? Were people really committed to the cause or just working a few hours a day while trading NFTs and ICOs? This wasn’t the case with Graphite. Getting back IRL was about knitting a culture early and building the trust to do the aforementioned iteration. Put together everyone’s ideas and opinions together.

Were there some candidates who decided to not interview at Graphite because they preferred a remote lifestyle? Sure. But there were equal numbers who actually were leaving their jobs because their current employer was staying URL first. Remember, this was a young tech-focused startup in NYC – working from home with your two roommates and a small apartment is not glamorous. Having the social and physical separation to walk, bike or take the subway a few stops to an office was actually a feature, not a bug, for many. Graphite stayed true to who they wanted to be and ripped off the ‘what should we do’ bandaid early. It paid off – I don’t believe they would have been nearly as successful if they had stayed remote.

Three Founders Went the Distance Together

Point blank: By Year Six it’s unusual to see three technical cofounders all remain vital to the company. In my experience one of two situations tend to occur – they realize the CEO isn’t scaling and try to make that change or the two non-CEO cofounders overlap too much in engineering/don’t scale as leaders. There are versions of this which are polite and productive and versions of this which are toxic and disruptive. But it happens a lot. Obviously it didn’t here. But why?

Merrill wanted to be a great CEO not just a great cofounder. From early on he had the self-awareness that this would take work. And that the role would sometimes put him in disagreement with his cofounders on strategic decisions. He simultaneously embraced the responsibility while also prioritizing the effort to ensure the three of them were always communicating well, trusting each other, and putting Graphite ahead of any one of their feelings or ego.

Greg and Tomas were two sides of the same coin. They both cared deeply about Graphite being a place where engineers could make a difference. To oversimplify, Greg thought about this from a collective and structural perspective (what does the Engineering Org look like, what’s appropriate documentation and processes for our scale and culture, when do we need Engineering Management) and Tomas biased towards the individual (how could any one engineering hire make a difference, how could he look a potential team member in the eyes and sincerely say Graphite would be somewhere that they could have a great idea, build it, and ship it without five levels of approvals and a chilling effect of low risk tolerance), This is of course an abstraction – but they scaled beautifully. Tomas could work on experiments, Growth projects, lead Product within the technical and cross-functional org, while Greg had a natural role as CTO.

Of course I lived on the cap table, not the org chart, so my observations here are incomplete and reflect an outsider’s perspective, but I have such tremendous respect and admiration, not just for what they built, but how they built it. And that’s what we strive for at Homebrew. The intersection of joyful work with great teams and financial outcomes which make the work possible ongoing.

Onward!!!

So much to read but only 408 hours left in the year… gulp

Elon Musk Has His Vision. Waymo Chief Tekedra Mawakana Says She’s Got a Better One [Noah Shachtman/Vanity Fair] – Waymo is magical. Reading this profile made me realize how little we hear from their executives versus how much we hear from that other guy. They’ve done over 14 million trips in 2025 alone and are a great example of technology changing the everyday physical world. We’re lucky here in SF – may your city get Waymo next!

Want This Hearing Aid? Well Who Do You Know? [Steven Levy/Wired] – Limited in release and $6,800 to start for an AI-enabled hearing aid. But (a) it’s apparently awesome and (b) this is how you move down the cost curve over time and (c) hearing aids in general are expensive [and not always covered by insurance unfortunately]. The company is named Fortell if you want to learn more.

MCPs: Value Creation, Capture, and Destruction—Lessons from the API Era [Leonis/The Thesis] – Pretty interesting take on where value will accrue once MCPs are mature in the AI stack, using lessons from the proliferations of APIs earlier.

“That era taught us something fundamental: once the connection layer is standardized, value doesn’t live there. It moves upstream to infrastructure providers who power the system, and downstream to vertical specialists who solve hard, domain-specific problems. The middle layer that acts as the glue gets squeezed. The same will happen with MCPs. Standardization creates new opportunities, but it also kills entire categories of shallow integration businesses. Some will mistake protocol adoption for defensibility. They’ll be wrong.”

Everyone is Gambling and No One is Happy [Kyla Scanlon/Kyla’s Newsletter] – Kyla riffs off of a study that pins twentysomething’s dissatisfaction to economic insecurity (one of many that arrive at the same conclusion). Alongside this – or maybe because of this – trust between groups is eroding, AI anxiety is increasing, and degen/YOLO/gambling activities are surging (especially among young men).

Reflections from Our 2025 AGM – $1T Private Companies, AI Fundraising, and Outbound Sourcing [Charles Hudson/Venture Reflections] – Charles runs a venture firm called Precursor and always brings his truth to these discussions. I attended this one and he definitely pulled out the meatiest topics to share here. It’s always interesting to see where he’s continued to evolve his understanding year over year. The $1 Trillion Dollar Private Company is one such area.

One Thing I’ve Currently Using Blackbird, this new local restaurant/bar app which is some combination of loyalty program, crypto payments, etc – it’s curious and I’m trying to make sense of it all. You get free somethings for trying it too. Here you go:

Download Blackbird and earn 2,000 $FLY when you check in for the first time. That’s $20.00 toward any meal!

Use my code bb-o9edk2 https://app.blackbird.xyz/r/bb-o9edk2

Prioritize ownership over valuation on any given deal, but price drives your portfolio construction. This was basically how we managed Homebrew during its first decade, when we were investing out of three institutional funds, all sub $100m. The guiding principle changed in 2022 given our evergreen personal capital model (as I detailed in Why I No Longer Care About Startup Valuation When I Invest (Except for These Four Reasons)), but it served us well when we were deploying in a more typical lifecycle.

Our strategy for Funds I, II, and III were basically to lead/co-lead seed rounds with a 10-15% ownership target. Our third fund averaged 11.6% but it was really more bimodal – a bunch of 8-12% combined with a roughly equal number of 15% – across 31 startups. The concentration of dollars (expressed in ownership) was primarily about being able to also focus our time working with the portfolio and keeping our funds modestly sized where $1b outcomes could make a real difference to returns.

So our thinking was basically something like this in Fund III [2018-2021, $90m, 31 companies]:

• For any given seed investment target 10-15% ownership for what was then usually a $1-2m cost.
• If the pricing drifted north of that and we maintained our conviction, still favor at least minimum ownership target and go over $2m initial check for it if necessary.
• BUT too many of those and it starts to really impact the number of companies we’d be able to back in the fund. Basically, get too far above the $1-2m range per initial investment and you start to effectively say ‘this investment is better than being able to do 1.5 or 2 other investments.’
• We believed we ultimately wanted 28-34 companies in the fund (and *some* reserves, maybe ~25-30%).

Did we ever say ‘no’ to an investment opportunity based on pricing? Sure, but it was more often a function of the overall round size becoming too big for us to write a lead check, rather than the difference between, say, $1.5m and $1.8m to get 15% ownership.

Much like the Mike Tyson quote “everyone has a plan until they get punched in the mouth,” every firm has a model that then gets hit by reality (aka The Market). You can decide what you put in a spreadsheet cell a year ago is gospel, or you can use it as a guidebook, and behave more dynamically given what occurs over your deployment period. But if you make every investment decision without some framework to understand what it means for the fund itself, you might find the whole becomes less than the sum of its parts.

Footnote: One of the fun parts in backing new venture firms via Screendoor, is talking with them about portfolio construction and seeing the different strategies/playbooks they implement to win.

You might be eating Thanksgiving leftovers, but these URLs are fresh off the vine. Enjoy!

Why the New York Bodega is Here to Stay [Anna Kodé/New York Times] – GoPuff will not replace us! Doordash will not replace us! Bodegas provide community, geo specific goods and services, and a pathway for immigrants to work their way into the local economy. They are forever good. And besides, if they disappeared, where would all the Bodega Cats go?

The Production Capital Mosaic: Financing the New Industrial Deployment Age [Brett Bivens/Venture Desktop] – Brett reviews many of the emerging ways we think of providing capital to businesses and creates an important division: is the capital vehicle shaped like a company or a financing entity? Worth reading in full to really understand why he thinks this is a valuable distinction.

It’s the End of the (ARR) World and I Feel Fine [Brett Queener/Tales from the Bonfire] – Brett starts with a banger [“ARR was great for the SaaS age, but it may be as relevant as a Commodore 64 for the AI software era.”] and goes from there. He touches on impact for founders and execs; venture capitalists; and private equity models. If the AI world is about hiring, not buying, software, what else changes?

The Monks in the Casino: A brief theory of young men, “the loneliness crisis,” and life in the 21st century [Derek Thompson] – This is soooo good and starts threading together concerns Derek has about what economic degen as a way of life means for society, especially men.

This shift has moral as well as economic consequences. When a society pushes its citizens to take only financial risks, it hollows out the virtues that once made collective life possible: trust, curiosity, generosity, forgiveness. If you want two people who disagree to actually talk to each other, you build them a space to talk. If you want them to hate each other, you give them a phone.

Do Something Important, Quickly [Yoni Rechtman/99% Desirable] – “All VCs care about is the asymmetry of being right/making money without the risk of losing face.” At least he front stabs us instead of backstabs. He’s not wrong. And it’s a problem that is making our industry boring.

Why every country needs to master the Electric Tech Stack [Noah Smith/Noahpinion] – Most frameworks become overloaded as the creator tries to make everything fit their worldview. TBD whether the ‘Electric Tech Stack’ falls victim to this gravitational pull, but for now I like how it pulls together a set of industrial, economic, and technical capabilities that might define the coming decades. Batteries, Electric Motors and Power Electronics.

Enjoy some reading!

Slinging URLs for your Thanksgiving* Week reading (*where applicable 🙂 )

Strong Capitalism: Playing Entrepreneur on Hard Mode [Philip Rosedale, Entrepreneur] – Philip continues to pull forward the Kapor/LongNow/StewartBrand/HomebrewComputerClub ethos of early SV, here encouraging a host of values that have inspired me. It’s comedy/tragedy that he has to brand this “Hard Mode” but I get where’s he coming from – the shortcuts, shirking of responsibility, getting yours at others’ expense *does* feel like lazy, soft, uninspired building. Philip names a bunch of Operating Principles for Hard Mode – you should read the whole list. But let share his full opening paragraph to give you a sense of where he’s going.

The strong capitalist recognizes that free markets are the best way to create opportunity, innovation, and economic prosperity, while simultaneously acknowledging that in the absence of any other operating principles, capitalism leads to non-meritocratic wealth inequality, monopoly, resource depletion, and extraction. The strong capitalist demonstrates and upholds a set of additional behaviors which maximize the health, prosperity, and longevity of the free markets, even when those behaviors make their own success more difficult – AKA – “hard mode”. The strong capitalist is an honorable competitor, a source of inspiration to others, and deserving of their returns.

I Worked All Over Silicon Valley. This is How it Lost Its Spine [Aaron Zamost/New York Times] –

“For tech companies, courage doesn’t scale.” Gutshot and he’s not wrong. I had the pleasure of working with Aaron at YouTube (he later went on to executive roles at Square and others) – he’s not a cynic by default – Aaron has put his sweat and reputation into these companies. He believes in the empowering potential of technology. But maybe no longer is as confident in the technologists.

For years, Silicon Valley symbolized progress. Its retreat from its core values leaves no clear heir — no other industry fights for the future in the same way. When tech is the villain instead of the hero, the future feels leaderless. And a country that stops believing its innovators can make the world better stops believing in much else, too.

don’t take the bait. vice signaling is eating silicon valley. [Jasmine Sun/@jasmi.news] – Ok so this is the *third* link in a row that notices the gaping fissures in our community. But let me tell you why I’m encouraged, rather than depressed – these are all practitioners, not just pundits. These are people who have done – and continue to do – real work of value. These are people looking to help remodel the house, not just criticize the architecture.

I also worry that Silicon Valley now punishes outward earnestness or virtue; young technologists have expressed fears of appearing soft—or worse—woke. I don’t want these vice-signalers to represent the industry, giving credence to already budding distrust of tech. If the bubble pops, or if an SBF-style scandal erupts, or if we get evidence mapping social crises directly to AI, the public will not be kind to those who got rich bragging on the way.

New Stack, Same Game. Why the AI Native Era Feels Different Yet Familiar [Ashley Smith/Vermilion Cliffs Ventures] – Author credibility check…. ok, Ashley had marketing leadership roles at Twilio, Parse/Meta, Gitlab, Github. Verdict: Credible. Now she’s full-time on her own venture firm, Vermilion Cliffs. Here she challenges one prevailing take: “There is a common assumption that someone like an OpenAI will simply build everything. The same assumptions appeared about AWS, GitHub, and Atlassian in their key eras. But every time the platform layer stabilizes, specialization accelerates.”

Importantly she’s not just writing her beliefs, she’s funding them.

How Screendoor became a key signal for emerging VC talent [Allie Garfinkle/Fortune – $] – Screendoor backs founders who are building venture firms. It’s often like backing seed stage companies – you need an eye for talent, stay close to the ground, and be willing to commit before others believe. Here Allie takes note that our portfolio is quite remarkable; that we’re often the first institutional LP to sign on to fund; and that when we invest, other LPs fast follow. Lots of work to do but proud of what Lisa and team are building.

Enjoy!

Encountered this ‘use scale’ at a high school for how students are permitted (even sometimes encouraged) to use Artificial Intelligence tools in their work. Struck me as very smart when applied with thought on a per subject, per assignment basis. Wonder what the teacher-facing guidelines are too!

56 investments into Homebrew IV(ever), the pivot we made in 2022 to investing our own personal dollars in an evergreen fashion, we’re in a reflective mood. The almost four years of operating in this new normal represents a ‘fund cycle’ of sorts, so we probably have enough early data to reflect on this style of venture investing versus the more traditional LP-backed deployment of our first decade. One of the most clear differences is how we treat startup valuation in our entry point. And it’s a meaningful change!

Whereas before, as a lead seed VC in a portfolio model structure, the negotiation would be a tradeoff (for us) between ownership target, check size, current fund size and total number of investments we wanted to reach for that vehicle. Now we offer a (mostly) consistently sized supporting check, are stage agnostic (although 90% of the 56 have been pre-seed/seed), possess no ownership requirement, and have an open-ended timeline. Essentially pricing, as a top line absolute concern, is less of modeled variable for us, and more of a signal to inform our decision. Valuation contributes to our conversation around four questions we ask ourselves:

A. What were the founders optimizing for? Maximizing valuation? Minimizing dilution? Enough capital to cleanly execute to next milestones? Or maybe a bit underfunded? All things being equal, we understand the market dictates prices, but just like a startup’s strategy can differ whether their strategic true north KPI is growth or margin or customer count or something else, so will the goals of a round lead you to different results. An initial financing can often be one of the first telling data points on what matters to a founding team, whom if we invest, we hope to be able to support for years to come.

B. Did the founders’ decision around pricing help or hurt the quality of the cap table? ‘Best’ investors or just the auction winners? Were there folks we believe are good partners to early stage companies who walked because of terms? Is there a lead investor and if so, are they underwriting to the same type of outcome, on the same timelines, that we’re seeking? Obviously impossible to fully know unless the founders are super transparent, and potentially subjective, but on our checklist.

C. Will the next financing be made more difficult because of the pricing set now? Good rule of thumb is to imagine what has to be achieved for the company to be worth 3x more the next time they raise. While this is likely overly precise, since startups are power laws so in hindsight the majority of a company’s financings were ridiculously cheap or insanely expensive, early on, in the Seed/A round, it’s at least a useful exercise. Start with too high a seed valuation and the degree of difficulty to get to a clean Series A is just that much harder. Since we’re investing our own capital and not playing the AUM “how much capital can I get into this company” game, our financial interests are more similar to founder/team needs: clean outcomes where everyone makes money at the end. Ahh, alignment is a beautiful thing.

D. What do we have to believe to imagine we can return 20x, 50x, 100x on this investment? Tied to the above, which is more about the pit stops along the way, we think of each dollar we invest as opportunity cost – it could have gone into a different startup. Homebrew IV hasn’t changed its return benchmarks and so while it’s still very much taking the risks involved to find generational startups early, the higher the entry cost the more we need to be convinced there’s a Large, Urgent, and Valuable problem to be solved, with a margin structure and outcome multiple.

We still firmly believe that if you are running an institutional capital firm you should err towards concentration – owning enough of your winners in order to move the needle on returns is the “easiest” way to outperform. But for our current playbook, Satya and I are hypothesizing that these four considerations will matter more to Homebrew IV’s financial performance than trying to hit an ownership target. Just need to wait 10 more years to be sure 😉