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For a population that claims to hate ads, we certainly do spend an eye-watering amount of money on them. Global ad spend surpassed $1T for the first time this year, Super Bowl ad rates hit $10M for a 30-second slot, and advertising powered more than 20% of U.S. economic output and more than 70% of Google’s total revenue in 2025. As individual consumers, we are served a deluge of ads, with some researchers estimating the average person sees 6,000 - 10,000 per day. Whether you notice them or not, they are present in every feed you scroll, every podcast you play, every storefront you pass.

Advertising predates our modern society by millennia. The earliest recorded advertisement, The Papyrus of Slave Shem, is from Egypt and dated some 3,000 years old. The author of the papyrus offers a reward for a runaway slave but can’t resist plugging his business in the process, promising a gold coin for any helpful news delivered to “the shop of Hapu the Weaver, where the best cloth is woven to your desires.” As human civilization has evolved, the medium of advertising has evolved alongside it. From print to broadcast to website to mobile, we have seen each generation of advertising advance alongside the technological shifts of the time. Yet no matter the channel, advertising has always been about matching a message to a person at a specific moment. Each frontier of ad technology has simply built on (or disrupted away) the previous modality to find and optimize that match a little better.

Today’s advertising stack runs almost entirely through Google, Meta, and Amazon, which together account for more than 62% of digital ad spend globally. Each of these platforms operates as an independent walled garden with its own demand, inventory, and measurement tools. This structure was borne out of three major market shifts over the past thirty years, with clear, disruptive winners emerging at each stage.

1. Broadcast → programmatic (1990s to early 2000s). The internet era introduced a transition away from print, television, and broadcast media to thousands of new publishers (websites) with no standard way to serve or measure ads across them. Cookies made basic tracking possible for the first time, but the fragmentation of the publishing landscape necessitated the adoption of new technology by agencies that were used to managing dozens, rather than thousands, of end channels. DoubleClick, which was acquired by Google for $3.1B in 2007, built the ad-serving and management layer for the early web, allowing advertisers and publishers to manage ads across websites for the first time using its Dynamic Advertising, Reporting, and Targeting (DART) platform.

2. Manually negotiated → real-time bidding (mid-2000s to mid-2010s). As the internet continued to grow, it outpaced the existing form of “insertion order” media buying, which required advertisers and publishers to formalize ad campaigns via purchase orders that detailed dates, budget, placement, specs, and KPIs. The process of drafting and signing contracts for every campaign rapidly became too burdensome for the quantity of online ad inventory available on the market. In 2010, the Interactive Advertising Bureau standardized OpenRTB, the new protocol for real-time bidding (RTB) that set the foundation for today’s style of ad auctions. The Trade Desk, founded in 2009, foresaw not only this market shift but also the desire for agencies to bid and buy via a neutral, third-party platform rather than publisher-owned marketplaces; it went public in 2016 at a >$1B market cap and serves thousands of corporate customers today.

3. Desktop → mobile (2010s). As mobile phones became mainstream, so did an entirely new ad interface: the mobile app, and in particular, the free-to-play mobile game. Cookies, which had powered the ad transition to online, didn’t work in apps, so the ecosystem necessitated new distribution and monetization tools based on cost-per-install rather than the traditional cost-per-mille (CPM) economics underlying website advertising. AppLovin, which trades at a ~$140B market cap today, built one of the first mobile ad networks, mediation platforms, and user acquisition engines to help game developers find and monetize users at scale, finding product-market fit with the long tail of small to mid-size app developers who lacked the resources and scale to build proprietary sell-side capabilities.

In its current state, the advertising value chain passes from advertiser (the brand or company trying to sell a product) to publisher (where the ad ultimately appears) with many handoff points in between. Advertisers contract out to agencies to research and identify target markets, draft and approve creative, and strategize campaigns in line with budgets and performance goals. Agencies then bid, buy, and manage advertising slots via demand-side platforms (DSPs), which consolidate and automate RTB across the advertiser’s publishing channels. On the other side of the bidding process is the supply-side platform (SSP), which holds the publisher’s available advertising slots and runs auctions to bid out the slots to the advertisers. The place where the DSP and SSP meet is called the ad exchange, though this has now functionally merged with the SSP into a single marketplace. In practice, bidding, buying, and ad placement take place within milliseconds, so that when you open an app on your phone, the ads that you see for swimsuits or watches or sunglasses as you scroll have been placed there in real time based on the user cohort that you represent.

The current advertising value chain

Given what’s occurring in today’s tech world, we have to believe that the next frontier of adtech is AI-powered, with several major tailwinds propelling a potential shift from programmatic → agentic advertising.

The first is infrastructural: in October 2025, a coalition led by adtech veteran Brian O’Kelley and including companies such as PubMatic, Optable, and Scope3 released the Ad Context Protocol (AdCP), an open standard for agent-to-agent communication spanning discovery, bidding, buying, and campaign activation. AdCP is built on Anthropic’s Model Context Protocol, which was introduced in November 2024 to connect and enable interoperability for AI systems across external tools and data sources.

Just as OpenRTB standardized real-time bidding in the programmatic era, AdCP codifies the “language” that agents use to coordinate across different DSPs, SSPs, and publishers to optimize ad spend and placement. Adoption is still early and challenged by the release of proprietary servers built on the MCP by Amazon, Meta, Google, and other walled garden DSPs / SSPs that would prefer to own their integrations directly. Yet the foundation now exists for less tech-native or resourced players to enter the field; Omnicom, for example, has started experimenting with AdCP’s capabilities for agentic media buying use cases, as has Magnite, which built and released a new seller agent earlier this year. Agents are also emerging in the upstream design and creative layer, with tools like Amazon’s Creative Agent allowing advertisers to better customize and target their creative strategy toward different audiences.

In addition, the move toward LLMs and chat interfaces as the primary levers for discovery and purchase intent – with more than 50% of consumers now using AI-based search for product research and recommendations – has positioned the chat window as the platform where the next generation of advertising will be built and won. The real unknown is the effect of this move on the macro landscape. It’s very possible that OpenAI joins the triopoly of Google, Meta, and Amazon as the next consumer winner, and that these players close off further, each building higher walls around their respective gardens (excuse the metaphor). In this case, it would make sense to build deep for these existing channels, with some differentiation across mature (Google, Meta, Amazon) or fast-growing (OpenAI, Walmart Marketplace, TikTok). But you could also believe, as we do, that there is meaningful leverage in supporting the long tail of distribution, as AppLovin discovered in the desktop → mobile era by aggregating fragmented supply and demand across mobile games that were unsupported by the big players.

With this context, we see three distinct opportunity areas for the next frontier of adtech.

1. Build deep for the mature landscape with new technology

Though the technology is evolving, advertising powerhouses like Amazon, Google, and Meta will not be disrupted away so easily. Rather, new tech will serve and win share of wallet with existing platforms.

In this space, Pacvue and Skai currently dominate as the clear enterprise category leaders in channel management, with AI capabilities such as Pacvue Agent and Celeste AI automating omnichannel management on their platforms. The Trade Desk also recently announced Koa Agents to execute campaigns in real time. On the startup side, Gigi and Caples.ai go deep on single platforms (Amazon and Meta), automating end-to-end ad workflows within these ecosystems, while Laurence and Kovva’s agents bid and buy in real time against advertiser targets and campaign strategy.

The TAM here is massive – forecasted to hit $1.6T by 2030 – yet it is a proven and saturated market experiencing steady, not explosive, growth. The landscape is crowded, so success in this space is less about disruption and more about defensibility; winners will have to go deep and build real differentiation against incumbents to do well.

2. Build for the next-gen surface of conversational AI

Conversational interfaces are already a new discovery and purchasing surface for users – we discussed our perspective on it here if you want to read more. In recent months, the AEO / GEO space has continued to heat up as brands and creators search for the best tools to serve a channel rapidly disrupting how consumers search and shop online.

Already a few key standouts are starting to emerge. Profound has ballooned to a unicorn valuation just 18 months after its founding as a platform that allows enterprises to track how AI describes them and generate optimized content to actively shape those answers. Prorata helps creators verify that their content is being accurately cited and monetized across AI-generated answers. Smaller startups like Smalk AI help advertisers and publishers adapt their discovery and monetization strategies to the agentic ecosystem, while Nexad sells an AI agent that autonomously runs and monitors ads on behalf of advertisers.

This market is nascent relative to the existing landscape, with U.S. spend on AI search ads projected to hit ~$26B by 2029. While the TAM is smaller, projected growth is in the triple digits (current spend sits just over $1B, setting the CAGR around 125%). Though category leaders may be taking shape, there is still a lot of room to win here, particularly as the supply side continues to be built out.

3. Build leverage outside of the walled gardens

As discussed, the AI app landscape is rapidly fragmenting into a long tail that represents a collective and meaningful opportunity set outside of the walled garden platforms. The incentives to serve this market are strong, compounded by the reality that usage-based pricing is replacing the heavily subsidized inference costs that used to power most GenAI apps, squeezing margins and pushing them toward monetization at increasing speed.

This is the least mature of the three opportunity areas that we see. On the demand side, Dappier builds customized conversational AI experiences for advertisers seeking to become more AI native. On the supply side, Koah Labs and Imprezia provide SDKs for AI apps to monetize their platforms, explicitly targeting the long tail of consumer apps as customers, while Kontext (ad generation for consumer AI apps) and Thrad (an SDK and API for contextual ad placement across AI apps) tackle the creative and demand layers.

Similar to above, this is a small but rapidly growing opportunity area: the global AI app market was valued at $2.9B in 2025 but projected to hit $26B by 2030. No single company has yet emerged as a forerunner, though history suggests that the ultimate winner will successfully accrue durable leverage by aggregating the supply and building atop it.

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We’re certain that adtech is entering its next phase, whether within the existing ecosystem or an entirely new one. As a non-consensus firm, we don’t like to bet on what’s already hot. Rather, as we watch the field grow busier, we’re looking for the players on the sidelines, observing the gameplay and coming up with new rules to win. If you’re building in adtech at the fringes, diving into what’s unexplored, and seeing the opportunities that others aren’t, we want to chat. Please reach out to chelsea@equal.vc!

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Today, we’re excited to announce our 4^th Annual Climate Capital Summit, taking place on Thursday, September 24th in New York City!

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Since our inaugural Summit in 2023, a LOT has changed in the world of climate capital. In 2021, the climate investing market was in a resurgence unlike anything we had seen in the prior decade. The moment was steeped in sustainability, energy efficiency, and carbon abatement. Today, we’re focused on addressing AI bottlenecks and innovation in nuclear energy. In between these two periods, there was a lull where companies related to climate felt nearly untouchable by mainstream venture capital.

For audacious endeavors that require capital throughout their lifecycle, these peaks and troughs can be perilous. We started Climate Capital Summit to ensure that there was a forum for engaged innovators to come together regardless of where we were in the hype cycle. We never intended to capture a trend, but rather to advance what we believe is the multi-decade transformation of the energy industry. Having hosted thousands of people who represent hundreds of billions of dollars of companies and trillions of capital, we’re proud to bring this group together for our most ambitious summit yet.

Energy is back in the zeitgeist as the clear limiting factor to AI’s ascent:

How do we produce enough energy to satisfy the power needs of the AI wave?

How do we power AI without destroying our environment?

How do we protect our environment without undermining economic prosperity and affordability?

Can AI help us discover energy breakthroughs that have evaded us for decades, providing the holy grail of clean, abundant and affordable energy?

These are the questions the market is asking today. We will tackle these (and others) at this year’s Summit. Perhaps the most important consideration is, “What can we learn from past climate investing cycles?” We often ask ourselves this question at Equal Ventures, and it’s one of the reasons why we cherish the opportunity to assemble this group of leading investors, executives, and innovators.

This year, we’re welcoming many of those investors, executives, and innovators back to the Climate Capital Summit, alongside a new group of leaders joining the conversation. We have even more exciting guests to announce in the coming weeks and look forward to bringing this exceptional community together. More details can be found at climatecapitalsummit.com.

Some of this year’s featured speakers include:

As always, the Summit will be invite-only to maintain our focus on the quality of engagement. However, we are always looking to bring new leaders into our community. We receive thousands of applicants for a few hundred slots, so make sure you request a spot early!

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Lastly, if you are interested in partnering with us as a speaker or sponsor to help make this year’s Climate Capital Summit the best yet, please email us at events@equal.vc.

We hope to see you there!

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Yesterday, there was a great post by Chris McCaan of Race Capital (I don’t personally know Chris, but enjoyed the post), discussing the binary nature of Series A financings in this market. As Chris said, “Capital hasn’t disappeared, but its concentrating around a smaller set of perceived breakouts. Series A used to behave more like a curve, where strong companies could find a price, now it is becoming binary.”

This dovetails with a conversation that I had with a peer of mine who has been in venture for 17 years at top-tier firms who noted “VC has become a caricature of itself…there is an incredibly small landscape of what the big funds want to fund right now (explosive AI growth stories, defense tech, data center buildouts, frontier tech) that it’s virtually impossible to get even great businesses funded outside of those categories.”

We wrote about the potential for this dynamic in “The Extinction of Venture Capital” roughly two years ago and it’s largely played out as we thought it might with the tail wagging the dog. With that, I mean that we’ve seen downstream interest dictate upstream behavior in terms of what other investment firms are interested in funding and what founders are building. This is the opposite of what we’ve traditionally seen historically, where downstream investors responded to the revealed success of what was working in market. Given that much of what we are seeing funded today at multi-billion dollar valuations is either pre-revenue (in the cases of frontier and defense tech – NOTE: a LOI is NOT revenue), deeply gross margin negative (many of the AI companies) or most closely resembles infrastructure capital (data center development projects with immediate interest, but a LOT of long-term liabilities), this isn’t the same game of observing and responding to the revealed interest of customers like it used to be. It’s capital picking categories and picking winners.

I have no problem with that game. It can be highly lucrative and I understand the incentive to do so. There are about 5k VC firms that can write a $500k check and about 5 that can write a $500m check. Not only can you get more money to work in that strategy, but you have less competition amongst investors and less competition between companies. As an aficionado of competitive strategy, I respect it.

But what does this mean for founders and VCs attacking opportunities outside of today’s zeitgeist. Well, it depends.

I personally see the “non-hyped” early-stage round to be one of the best long-term opportunities in the market today. This stage of investing (A/B) has historically been one of the most lucrative stages of investing and now the market’s binary nature has left a lot of GREAT companies seeking an increasingly thin slate of capital providers. A second order benefit of that, is that there will be inherently fewer competing companies in those categories - that these companies can become more profitable and capital efficient than ever before. A decade ago, dozens of companies in a single category could be funded throughout the entire life-cycle, providing tremendous optionality to customers and driving down the long-term profit pools for the segment. Today, if you can break through to profitability early, leverage AI to stay efficient, grab the pole position in a category that no one else is funding…well, you might just have the chance to create the next Veeva (for those who don’t know, Veeva raised only $9m (a portion of which was secondary) and achieved a valuation of >$50b in the public markets). For a firm like ours, THAT is the holy grail.

I’ve thought a lot about this dynamic over the last few years and we ultimately started bifurcating our portfolio into those that we felt were ready to get on the venture super highway (those that aligned with the zeitgeist with easy access to capital) and those that seemed like they could be great business, but unlikely to receive immense interest from downstream funders and needed to operate accordingly. We called these two profiles “heaters” and “cash cows”. I shared the graph below in a LP update that I did last year titled “A tale of two markets”.

If you follow the tables below the chart, you can see that the return profile of these investments is actually incredibly similar. What is different are the interim valuations in between. Those interim valuations show as validation points to LPs, but they are also dilution points – times where you need to invest additional capital (potentially at inflated prices that pull up your dollar cost average) just to maintain ownership. We like BOTH of these profiles in our fund and think it is healthy risk management to have a bit from each as we build out a portfolio. What has grown increasingly clear to us, however, is making sure we and the founders are aligned on which of these paths they are pursuing. Being self-aware enough to know what you are and what you aren’t is one of the most quintessential lessons in venture (and life) and nothing is more destructive than operating like a “heater” (high burn) when down-stream capital won’t be there regardless of growth.

I’ve thought a bit more about the mental model we should use to assess these opportunities (both upon entry and as the companies grow) and I ultimately see it as a function of capital intensity and competition. If you look at matrix of conditions below, these two factors determine the type of business you need to run and which skills are most important.

High competition and capital intensity (much of what is today’s current zeitgeist environment) incentivizes those who are the best fundraisers given the need/opportunity for downstream capital to provide a lasting advantage to the business. There are also capital intensive structures that have limited competition (partially due to their capital intensity) and while fundraising is deeply important in this category, capital structure is often more impactful (Hemant highlighted this earlier this week with his article on “capital as a moat”, expressing his belief that GC’s array of capital solutions were well suited to help founders win). Then there are the less capital intensive opportunities – those with competition and those without. The competitive categories are ones with low barriers to entry and will be hard fought battles. Ironically, given the amount of competition, some of these may elevate to become much more capital intensive businesses as we are seeing playing out in what were formerly quiet, capital efficient spaces like the insurance TPA market. That said, our favorite of all 4 quadrants on this chart (or what we would call the “Veeva Quadrant”) is the bottom-left, the quiet compounders.

As I think of the companies in our portfolio, some of the most exciting companies we have are in the bottom-left quadrant. They spend very little on sales and marketing, the CEOs are focused on their customers, their products and their teams > their social media profile or fundraising efforts, and they are owning new emergent categories with stellar efficiency. AI is a massive accelerant for these companies, enabling them to operate more efficiently than ever before, which is why many of the companies that we have in this category never raise despite tremendous performance.

Mike Maples once said “Patience is a form of arbitrage”. Never has that been more true than today. We’ve had several companies go from $2-5m ARR to $20-$50m ARR without a single mark-up because they don’t need the capital. As former PrinCo leader Andy Golden once told me, “Fundraising is an extremely expensive form of price discovery.” We’ve had these companies growing >100% per year that are cash flow positive and we currently have them on our books at 2-5x revenue. These companies don’t pump our interim returns the way that the heaters do, but frankly, we don’t need them to. We have enough “heaters” to post strong returns and we have a LP base that understands fundamental value and the beauty of quiet compounders. They understand the “Power of Patience”.

Not every firm can do that in a market like this (which is one of the most brutal fundraising environments for emerging managers that I’ve seen) and we are incredibly fortunate to have a LP base and a portfolio that can align on this type of strategy. While heaters and interim marks will grab the headlines, I’ve seen how some of these paper marks can come crashing down with a preference stack on top of you and I worry about the impact that can have on venture portfolios in the years to come. For Equal, we’ll continue to invest into both of these strategies, preaching self-awareness, efficiency and a relentless focus on creating real businesses (not just mark-ups), but I can’t help but feel that there is a dramatically underserved opportunity for the bottom left-quadrant. Investing in this quadrant seems likely to yield some amazing long-term results for the firms that can afford to be patient enough to see those outcomes play out. Admittedly there is a heavy dopamine response to one of our companies raising at a big valuation, but as philosopher Jean-Jacques Rousseau said, “Patience is bitter, but its fruit is sweet.”

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It’s become painfully obvious that global supply chains are growing in both complexity and risk. With tariffs injecting uncertainty into trade policy worldwide, geopolitical conflict exposing the economic dangers of single-country chokeholds over global shipping corridors, and consumer prices on the rise, companies are looking to make their supply chains more resilient – a costly and time-consuming endeavor requiring the overhaul of internal processes and the rapid upskilling of teams already burdened with legacy infrastructure and ways of working.

Historically, companies have built their supply chains on a network of third-party logistics providers (3PLs), outsourcing different physical tasks to specialized vendors across warehousing, distribution, packaging, freight, and fulfillment. 3PL relationships are owned by in-house procurement and vendor management teams. The data and tracking mechanisms across vendors live in disparate, outdated systems, making it unwieldy for these teams to manage the flow of goods between providers (or even know where their goods are). As you can imagine, traditional 3PL-based supply chains are also expensive. Each vendor bakes their own margins into their specific slice of the chain, and procurement teams spend hours, if not days, RFP-ing different vendors and negotiating prices down, while finance and commercial teams debate passing costs onto the consumer – stopgap fixes that do not fundamentally address the lack of end-to-end information required to optimize spend and reduce waste long-term. This complexity (and the labor associated with pricing and managing different vendors) often stymies some of the benefits of 3PLs across cost savings, breadth of opportunities, and overall risk management. Unfortunately, given the volatility of the global economy and commodity markets, this has left many businesses exposed to massive swings in transportation cost and availability, creating a sincere impact; in Q1 alone, shipper spending jumped by 21.8% year-over-year while shipment volume increased by only 0.6%, a clear sign that rising prices are rapidly squeezing margins and magnifying the cost of operations.

The problem of managing a fragmented supply chain is not a recent one. Starting in the late 1900s, companies began to see their supply chains and associated vendor relationships grow in both size and complexity. In 1996, an Accenture consultant named Bob Evans introduced a solution: the fourth-party logistics (4PL) provider, a model by which a company could outsource the entirety of its supply chain management to a single external partner to manage its full 3PL network on its behalf. Unlike 3PLs, 4PLs were by definition asset-light, selling the management services and analytics layer that sat on top of the 3PL network.

True to Evans’ background, early 4PLs were essentially consultants focused on increasing visibility into supply chains through centralized project management and coordination, sitting atop the underlying logistics stack and managing across it. As companies such as Accenture, Deloitte, DHL Supply Chain, and Kuehne + Nagel digitized throughout the early 2000s, their 4PL offerings became increasingly tech-forward, assuming the additional responsibility of building out and operating the systems that connected the parts of the chain. Managed transportation emerged as a sub-sector of the 4PL model specifically supporting freight, long considered one of the biggest pain points of any supply chain. As the model evolved, that scope grew to encompass the end-to-end logistics stack including carrier selection, routing, freight audit, load optimization, and last-mile delivery.

Currently, the largest managed transportation companies fall into two camps. Asset-based carriers such as J.B. Hunt layer managed transportation services on top of their owned fleets, while asset-light brokers such as C.H. Robinson, Total Quality Logistics, and RXO compete on the scale of their 3PL carrier networks and the quality of their underlying data infrastructure. This incumbent structure, however, was built for a more stable era. Today, tariff whiplash, route disruptions, and demand volatility are exposing the downsides of reliance on rigid and costly legacy brokers, posing the question: is the time ripe for a new era of managed transportation?

In previous eras of supply chain upheaval – most recently during COVID – we’ve seen 4PL-style orchestration companies across adjacent categories gain meaningful traction. Venture funding for this category hit a fever pitch in 2022 as the pandemic exposed the risks of relying on asset-heavy, capitalized infrastructure amidst a worldwide logistics breakdown. In the warehousing and fulfillment category, disruptive offerings such as Stord, ShipBob, Flowspace, and Flexe leveraged distributed 3PL partner networks and proprietary software to give brands access to flexible, scalable fulfillment solutions. Some tech-enabled freight brokers found success, such as Transplace (acquired by Uber Freight in 2021) and Flock Freight (which raised more than $450M). Yet other plays like Convoy famously failed after achieving nine-figure valuations, and smaller competitors including managed trans plays Loadsmart and Leaf Logistics attracted significant capital during the 2021-22 boom but floundered in the post-pandemic readjustment period.

This time, though the frenzy is comparable, some major tailwinds are shifting the landscape.

• Today’s global supply chain shocks are more permanent than the last. The war has demonstrated that Iran can wield significant and lasting influence over the Strait of Hormuz, with very real consequences for global shipping and commodity prices. President Trump’s tariffs have also fundamentally reshaped America’s reputation on the world stage as a reliable trade partner.

• Shippers want to offload risk, with increasing urgency. Firms have begun adjusting their supply chains to a “new normal,” prioritizing agility over scale and accepting that resilience will come with both higher costs and greater overall uncertainty. And as AI generates increasingly creative and effective ways to commit freight-based crime, companies are searching for more permanent ways to curb losses in this area.

• Technology is no longer the gating factor. Operationally heavy businesses have always been hard to run – not just because they are logistically challenging, but because they have lagged in tech enablement and digitization. However, recent AI innovations in supply chain technology have materially lowered the cost of adoption and are projected to radically reduce the difficulty of managing disparate transportation systems. In particular, AI has the potential to enable breakthroughs in coordination, tracking, and real-time pricing visibility across rail and air, two historically complex modalities which, with the right solutions, will make global supply chains increasingly adaptable.

• There is now a market for uncertainty. In April, the Intercontinental Exchange launched four new container freight futures covering shipping lanes between the U.S., Asia, and Europe. Though freight futures and derivatives have existed for decades, the absolute explosion of prediction markets onto the scene has revived the use of hedging as a strategy to mitigate risk by normalizing the concept of trading against real-world outcomes. Already, nascent offerings such as Pillar AI and Hedges allow participants to hedge against supply chain volatility or fuel price increases. We see a continued opportunity to insulate big shippers and freight forwarders from future pricing uncertainty.

The world has changed, and not just because those unused N95s are now gathering dust in the back of your bathroom drawer. With such strong tailwinds, it might be time to seriously revisit the managed transportation model. If you’re building to make transportation easier, cheaper, and smarter, we want to hear from you. Please reach out to zullo@equal.vc and chelsea@equal.vc.

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Everywhere you go in New York you see lines. For pizza, breakfast, upscale Italian dinners, and most recently, frozen yogurt – you can scarcely make it down the block without encountering one.

Given this is one of the trendiest cities in the world, it’s no surprise that people are first out the door when they hear about something exciting or new. Yet the lines are worth noticing not just for their presence but for what they represent. In an economy trending ever more frictionless, with personalized discovery, in-app checkout, and same-day delivery all offered DTC (direct to couch!), consumers are opting back in. They’re choosing to show up in person, to wait, to prize patience as the new status symbol rather than as an inconvenience that can easily be scrolled away.

In January, Eventbrite released its annual Social Study Report, which highlighted an overwhelming preference among Gen Z and millennials to reengage with real life via authentic, one-of-a-kind experiences. Nearly 80% of surveyed respondents said that they wanted to attend more events in person this year, with the vast majority desiring connection to their immediate communities via local fairs and markets, backyard parties, and “meet your neighbor” cafe events. It’s impossible not to view this as a rejection of the slop permeating the online world, where AI-generated affiliate content and product demonstrations are causing a major backlash against creators. Even on the retail side, CEOs are struggling to sift through the noise of “more products, more contents, and more trends” as consumers increasingly eschew their phones in search of products and experiences that they can enjoy in person.

Brands like Nike have started engaging their influencer networks differently, doubling down on hyper-local marketing efforts focused on live, “micro-community” activation. The bet is that, in an ecosystem trending offline, creators can more organically connect with and retain local customers by hosting smaller-scale, authentic events that build peer-to-peer trust. This is a real departure from the traditional retail model – formal, in-store footprints paired with a handful of online DTC channels – into one that is highly fragmented and localized, generating a new form of event-based commerce that brands are not yet equipped to manage. Consumers clearly want these experiences, but how do brands measure their value and prove out their returns?

Experiential marketing has always been an effective channel for customer acquisition and conversion, helping brands outperform across awareness, repeatability, and perception compared to traditional advertising methods. Yet as consumers shy away from curated, big-ticket experiences in greater numbers, they also sidestep the underlying infrastructure that allows brands to track and understand their in-person engagement metrics. This exposes a huge opportunity to serve brands that are trying to capitalize on this consumer shift so they can better optimize future events.

We’ve argued previously that the future of commerce will exist at the intersection of the digital and physical worlds: the Gen Z return to the shopping mall ushered by a new generation of digital tools, for example, or the “chronically offline” trend being catalogued – where else? – on social media. When we made our bet on Leap, we understood that the rebirth of retail would be powered by data, not footprint, and that brands would want to test and measure different in-store experiences without the burden and overhead of an expensive real estate lease. Yet the offline world remains difficult to track, in part because existing tools have not yet caught up with changing consumer preferences. In its current state, the landscape for measuring in-person analytics is still limited to two venues: the “store” and the “event.”

1. The Store. In-store and retail analytics for physical locations. Incumbents like RetailNext help retailers tie foot traffic and conversion back to business decisions such as store design, merchandising, and staffing, while players like ShopperTrak (acquired by SensorMatic in 2015) and Dor focus on the sensor vertical, building and selling people-counter technology to provide real-time traffic insights. Newer entrants like Pathr.ai (acquired by Standard in 2019) leverage computer vision to track and measure shopper behavior via in-store security cameras. Though technology advances have helped uplevel the capabilities here, serving this sector still requires operating within the traditional retail store environment.

2. The Event. Planning, execution, and measurement of events and experiential marketing activations, primarily at scale. Incumbents like Cvent and Splash (acquired by Cvent in 2024) handle end-to-end registration, ticketing, and event reporting for large corporate and consumer activations, while newer players such as Vendelux operate B2B, helping sales teams build out their pipeline through event selection and engagement. On the brand side, AnyRoad is maybe the closest use case we’ve seen so far, using AI to capture attendee data and tie engagement to downstream consumer behavior. Yet these products are all still built for the “flagship” event, relying on fixed venues and registration flows to streamline data intake; they break down when the experiences are smaller-scale, organic, and lack the established infrastructure for tracking.

As experiential marketing channels fragment further down to the community and neighborhood levels, brands will require tools to help them intelligently allocate their growing influencer marketing budgets and understand the impact of live activations on awareness, retention, and spend. The online stack is already well-served, with existing companies like ShopMy and LTK allowing brands to effectively track and attribute sales from social channels. On the discovery side, platforms such as Anvara and SponsorUnited allow brands to analyze the ROI of potential sponsors for events before connecting, and Hummingbirds pairs retailers with hyper-local creators to drive in-store velocity. Yet there is still a real gap in solutions supporting brands during and after the types of informal, smaller-scale events we are seeing today, offering a ~$130B market opportunity to anyone who can bridge this divide.

We’re not sure what the winners will look like, but we believe the right solutions will treat the point of sale as a person, not a place, and understand that authentic, in-person connection is a requirement for long-term consumer acquisition and retention. If you’re building in the offline attribution category, solving for the next wave of event commerce, or even just able to bring us some Dot Cakes – we’d love to connect. Please reach out to chelsea@equal.vc!

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This quarter marks a special moment in the history of Equal, as we promote Ali Afridi and Chelsea Zhang to Partner and Sophia Dodd to Principal.

I’ve now worked with Ali and Chelsea for a combined 15 years. That’s a scary thought. When I meet a 15 year old, they are a nearly fully-formed human. Yet it seems like I met Ali and Chelsea just yesterday.

As many of you know, I first met Ali through General Catalyst, when a few of the investors over there suggested we connect after they scouted Ali for a summer internship. Ali was unequivocally impressive and mature for his age, but it was his hunger, curiosity and humility that struck me the most. We ultimately offered him a job at Lightbank and he dropped out of college to join us. He couldn’t even buy a beer, but he knew he wanted to be a VC and work with founders. When we started Equal, he worked with us for free for months until we could finally do a close on capital. In many ways, he was not only a co-founder of the firm, but also its first investor. On our calendars for July is our 10 year “Ali-versary”, marking a decade since we started working together and he’s truly done it all for us. He’s not only an incredible investor and partner to our portfolio companies, but he’s also been instrumental in guiding our firm’s strategy. It’s been an honor to see him transform over the last decade from the college senior I once knew to the amazing investor, leader and person that he is today.

Chelsea came to us through an entirely different pathway. I was hungry to dive deeper into retail / CPG and she had textbook experience for my research intensive style given her analytical background from U Chicago, LEK and Wharton. She joined us in January of 2020 (just before the launch of our firm), while in her first year at Wharton. Then COVID hit. Chelsea spent the summer with us and by the end of it, I knew I wanted her to be a permanent fixture of our family. She prompted our move to more verticalized structures and ultimately our “Product Owner” model, as she excelled in driving research and portfolio support for our retail / supply chain companies, during a time when I was drowning and much in need of ways to find more leverage. She’s subsequently become one of our most active investors and board members, establishing a great emerging track record of commerce investments. Much like with Ali, she’s also played a pivotal role in driving the strategic direction of the firm and our personnel.

Ali and Chelsea have seen all the ups and downs of Equal. We’ve had plenty of both and while I believe we have adhered to many of the core principles that we set ourselves to when founding the firm, the composition is dramatically different. The two of these individuals also couldn’t be more different from each other, or for that matter, more different from me. One of those core principles was on the premise of “cognitive diversity” and the relationship between the three of us personifies that. We all come from extremely different backgrounds, social circles and work experiences, but have aligned on diverse perspectives within a shared lattice of decision making and principles. Their opinions make me better…their feedback makes us stronger. Nonetheless, it’s strange to think that if it weren’t for the world of venture capital, we might never have met. Yet here we are. These two have become two of the people I spend the most time with. But more importantly, they’ve become two of the people I respect and rely upon the most.

Two things made the decision to promote each of them to partner VERY easy. First, their progression. I have seen each of these individuals push themselves to new heights over the last few years. They’ve grown tremendously and founders/investors are recognizing that outside the walls of Equal. I think about the hard conversations we’ve had together over the years and how they’ve responded to elevate their game and it’s impressive. Investing in a slope like that is always the right call. That said, equally important is the premise of “partnership”. Each of these individuals has stepped up to the plate to perform duties beyond their role without request. I’m sure many of you saw this last year when I was out of commission while dealing with the death of my father, but their presence on these matters has been consistent from Day One. They want to be part of Equal and forge what it will be, caring more about our performance as a firm than their own personal gain. They’ve been leading Equal into the future, having led 3 of our last 5 deals. They are carrying many of the relationships with our founders and their 360s from their founders sang their praises.

I’m ecstatic to see more of that. As I see these two take on more investments, board seats and firm initiatives, I’ve become the dinosaur on the team. More often than not, I’m asking them to explain things to this feebly minded old man. I love that. I’ve always said that we should strive for players on our team that are better than ourselves and I’m confident that we have that with Ali and Chelsea.

It’s been an honor to work with them across the last collective 15 years and I couldn’t be more excited to welcome them to the Equal partnership and work with them in the years to come.

In addition to the promotions of Ali and Chelsea to Partner, we promoted Sophia to Principal. Sophia continues to demonstrate incredible work ethic and versatility. She’s increasingly stealing mindshare from our founders and exacting influence with investors externally. She’s dogged in her commitment to self-improvement with a “winners” mindset.

As some of you may remember, Sophia first approached us with a determined mindset about working at Equal, breaking open the doorway into our firm, despite our intentions to hire at a different level. She’s proven to be a great investment as she continues to exceed expectations and bring amazing insight, energy and hustle to our team. We’re excited to see her take this next step in her journey with our firm and with her career.

Life can come at you a million different ways that you’d never expect. Sometimes things break your way, sometimes they don’t. While I’ve learned very little in life, one thing that I have learned is that the moments where the wins are sweeter and losses are softer, when you have a great team alongside you. I’m really proud to see how each of our team members is progressing to achieve so much and know that they have even greater things ahead.

Please join me in congratulating all of them.

-Rick

PS - Give them a shoutout on X at @AliKAfridi, @zchelseaz and @sophiajdodd

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Research has been the bedrock of my professional career. I’ve often said that I invest from a position of “fear,” recognizing how strong the competition is and how essential it is to own a “right to win” if you are going to play this game. For much of my career, research was my “right to win” - enabling a “prepared mind” in obscure vertical markets that others lacked experience or interest in learning, providing some incremental edge that has enabled me to stay afloat as an investor over the last decade.

Much of my early career as an investor was defined by what would later be called “Prepared Mind Deep Dives” - essentially a powerpoint outlining our POV on a specific market opportunity. Those fancy powerpoints were incredibly powerful. They were a testament to the work we were willing to do behind a thesis, with numerous VCs admitting that they weren’t willing to do the same amount of work to 1) understand the market, 2) meet the customers, and 3) source/diligence all the relevant opportunities in the space. They would rather just join us on our journey. In many ways, those powerpoints were a sign of the sweat and commitment we were willing to put into a thesis and that provided an edge over the competition.

Over time, however, the advantage of those powerpoints has faded away. As I speak to other VCs on their adoption of AI, one of the primary use cases is getting up to speed on these obscure sector opportunities. All my experience toiling on desk research can now be automated. The work necessary to turn that into a fancy powerpoint goes from hours to minutes. What might have taken me 200 hours can likely be done in 2. The powerpoints we can make just aren’t as powerful as they used to be because everyone else can produce fancy powerpoints outlining a regurgitated thesis on the market. We used to distribute our research more externally and have pulled back from this a bit, recognizing that by putting our ideas out there, it makes it even easier for others to replicate our work. What does a firm that has defined itself on traditional research deliverables do to show its edge when those deliverables are democratized and commoditized?

But our firm has never been about just traditional research. We aren’t just reading reports about what is happening, we’re developing relationships to figure out what will happen. These reports were really just the output of the insights we gleaned from the relationships we developed with our thought partners (whom we lovingly refer to as “Bridgers”). As research deliverables get commoditized, I believe the strength of the relationships we have with these partners has evolved into the defining characteristic of our firm. And I’m far less worried about relationships being disrupted by AI than research.

While we’ll still have plenty of powerpoints that we put out, spending time with these industry partners has become one of my favorite parts of the job. I love the people in our industries. They are real-world demonstrations of how exceptional our country and its economy can be when properly executed. A few months ago, I was meeting with the former CEO of a nearly $40B company. I was flying back from Chicago to meet my wife/kids in Tampa for Spring Training (Go Yankees!) and this individual was gracious enough to make some time for me. We sat dockside for a few hours eating fish tacos, drinking Arnold Palmers and swapping stories - I loved every second of it. Not only is this person extremely successful, insightful and influential, but above all, he’s genuine, humble and appreciative. Here’s a guy that has had to kick and claw for every inch of his career and all he wants to do now is find ways to give back. He’s not doling out “expert calls” to the highest bidder; he’s trying to find the right folks to partner with and forge real relationships with. There is so much to learn beyond industry context when you get the chance to work with folks like that. We left that meal committing to find more ways to partner with one another. I love interactions like that and I’m fortunate that I get to spend more and more of my time with individuals like him that are not only deeply endowed experts in our industries, but the legends who built them.

This is where the core competency of our firm is shifting. We had staffed our firm for research, but have evolved into a firm anchored on relationships. With that, I’m now asking myself:

• What are the lessons we’ve learned from these individuals that aren’t indexed on the web?

• How can the industry leaders we work with help us define an opportunity and bring it to life?

• How can we align and mobilize our industry partners to provide unfair advantages to the companies we back?

• How can we create more value for our industry partners to attract, retain, and reward them?

• How can our firm evolve to optimize the potential of these relationships?

• How can we lean in on relationshpis, not just research?

These are the questions I’m asking myself on a daily basis.

More to come on how we’re doing this at Equal Ventures, but if you are an executive in Energy, Insurance, Retail, or Supply Chain, we’d love to get to know you. AI is an incredibly powerful tool, but we know that it’s the strength of our relationships with folks like you that will define our firm.

PS: Make sure to check out our Commerce Capital Summit and Climate Capital Summit! Our industry summits are some of our favorite opportunities to spend time with our existing industry partners and forge relationships with new ones!

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As folks evaluate AI-native services, I see tremendous belief (faith?) that initial product pull and lower cost will lead to long term structural value. Unfortunately, this isn’t always the case.

You can look through the ticker tape of time to see ample evidence of technology innovation yielding lower costs to customers, thus enabling early adopters of those technologies to seize market share. This is the foundation of the American industrial economy. Many players competing to out-innovate each other to produce bigger AND cheaper in the interest of economies of scale.

In some cases, this can be highly successful thanks to the concept of Jevons Paradox. We’ve explored this phenomenon before and it explains how, as the cost of a good/service comes down on a per unit basis, it opens up the scope of serviceable customers, thus driving higher overall consumption (expanding both the TAM and the profit pool for the market). We’ve observed this trend for decades in the personal computing market. As the cost of computers (relative to their performance) follows Moore’s law, we subsequently find new uses for consumption. As you can see below, while the price per unit of compute has fallen >99.99%, the overall TAM has grown dramatically as the growth in demand has more than offset those price declines. This is the story playing out in AI right now - demand growing as the price per unit of a computing function comes down.

But what if demand is fixed? AI is being applied to endless labor markets where demand is indeed fixed and the same supply side phenomenon (i.e. declining price curves) remains in effect. To give context, think about the market for auto insurance claims processing in a given year. When a car accident happens, there are two costs: 1) the cost of the actual claim (to fix or replace the car), and 2) the cost to administer this claim. The process to administer that claim is laborious and represents a great use case for AI and automation. With that, we’re seeing a LOT of companies attacking this space and many are demonstrating lots of traction by offering an AI-enabled service at a dramatically cheaper price than legacy players. Many of the emergent players are happy to offer their service below cost with the belief that 1) winning the market is all that matters, and 2) with scale, their margins will improve. In many markets, this can make a lot of sense, but not in commodity markets with declining pricing curves and fixed demand.

Instead, these folks are inciting a race to the bottom…one where margins disappear. As I spoke with one leading insurance industry exec, they said “We use 34 different TPAs…they are all getting cheaper as we bid them against each other…it’s beautiful.” These players are collapsing prices (and margin) in the market with no clear route to winning the market (TPAs typically have very low switching costs and the quote above shows how prevalent multi-homing is). When prices decline and demand is fixed/inelastic (i.e., demand doesn’t increase with lower costs), the market significantly decreases (see below) as does the margin structure for the industry. Even worse yet, these companies end up on an endless hamster wheel for customers. When prices decline by 50% in a given year for an industry structure like this, companies need to double their customer count just to maintain themselves.

As we see these companies, the margins are ephemeral. They initially swell as the insurgent player finds a way to innovate cost structure and grab market share, but then disappear as other new entrants come in and drive prices down. Making money in these markets is like being stuck in quicksand…the harder you compete cost structures down, the closer you bring yourself to your own demise.

We’re deep believers in AI-native services at Equal Ventures, but understanding how industry cost structures will evolve can make or break your company. There are nearly limitless markets that have and will expand dramatically with AI and if you’re a founder in our core sectors looking to win those markets, we’d love to hear from you.

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The Emerging Manager Circle community has become one of my proudest endeavors as a professional. It doesn’t make us any more, takes up a lot of time and isn’t used to help us raise capital or see more deals. That’s generally NOT seen as a success story, but anyone who has been part of this community over the last 5-6 years can attest to the impact it had on me, our team and the EMC community members.

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A few weeks ago, I shared an interaction I had with someone who I’ve known in venture circles for over a decade. While they have been out of venture for several years, they came up in the industry and given the social nature of our business, frequently attend venture events despite no longer working in venture capital, startups or even technology. For those who read the thread, it was a pretty harsh reminder of the journey I’ve been through. I applied for hundreds (if not thousands) of venture jobs prior to starting Equal. Countless VCs have denied me for jobs and I get it, I didn’t fit the profile. It took me a long time to crack into the industry and that’s fine. I’m here now and I’m proud of what we are building with Equal. But whilst surrounded by other emerging managers, this person chose to remind me of when I was “begging” them for a job. About the shitty clothes I wore (not much has changed there). And even commenting on my physical appearance - “I knew Rick back when he was fat.” (I’ve lost 30-40 pounds over the last decade).

This isn’t to throw a pity party. It’s to show why things like EMC matter. Sensing how uncomfortable I was with that interaction, one of the emerging managers who witnessed that reached out and said “Are you alright? That was not okay.” I’ve been beaten down so much over the years that I would have normally just shrugged it off, accepting these harsh indictments as truths about myself. But not anymore. Having fellow managers around me going through these same trials and tribulations has changed me. The folks in our community have supported me, pushed me to grow and pushed me to believe that we can make this industry better. It’s not just me, this community does that for each other. They help each other. They advocate for one another. And they’re the shoulder to cry on when times are tough (which they often are). The other night, I was with a few fellow emerging managers and one told me about the support he’s gotten from the group during what has been a tremendously difficult year. Moments like that show me that there is so much need and opportunity for what we do.

The EMC Summit is where we bring all of that together. Where fellow emerging managers and the LPs backing them can come together and focus on helping each other, if only for one day a year. EMC is meant to feel decidedly different from most venture events. Each year, we’ve had someone cry on stage (last year it was me) and the content we bring together can’t be found on the record or elsewhere. It’s ephemeral to that moment, making it all the more special. All the more honest. All the more authentic..

This year’s EMC Summit will be our biggest and best yet. We’ll continue to be free for all attendees and continue to maintain a 50/50 policy on GPs to LPs. While we will expand our headcount slightly from the past, we will continue to embrace intimacy over breadth. As many know, we make our application process (which is at the bottom of this post) open to all, but often receive 10x the number of applicants that we can host. We do our best to ensure that we create opportunity, while curating the highest quality audience we can, so we will be looping in a selection committee into this year’s process.

In terms of speakers, I’m excited to announce that we’ll have Ann Miura-Ko of Floodgate, Aydin Senkut of Felicis, Pejman Nozad from Pear, and Sunil Dhaliwal of Amplify joining us as speakers. We have several other speakers locked in that we’ll announce in coming weeks and I couldn’t be more excited to see this lineup of luminaries come together. This year’s summit will take place on 11/4 and there will be events for attendees the night before. We are not ready to disclose the location, but it will be in NYC (as if there was any doubt).We’ll have some news breaking announcements revealed this year and I’m confident that the content will be the best yet.

While the EMC Summit (and supporting events and activities we do throughout the year) is a ton of work, I’m very grateful to have this opportunity. We’re a small fund, figuring things out just as much as our peers, and I’m humbled by the responsibility to bring together such amazing people, many of which I have spent my entire career looking up to. I’m thankful to this community for the support it has provided to me and our firm over the last half decade. Anyone who knows us well knows we’ve had our peaks and troughs and it’s the support of the folks in this community that has gotten us through those tough times to be able celebrate the good ones.

We’re excited to bring everyone together and hope to see you there.

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If you are interested in joining us as a speaker this year or in future events, please submit your request here.

For those interested in partnering with us on sponsorship opportunities, please reach out to emc@equal.vc.

If you speak with anyone running a modern brand or retailer today, the same theme comes up quickly: the job has gotten a lot harder.

As merchants have expanded across owned channels, marketplaces like Amazon and Walmart, social platforms, wholesale relationships, and international markets, their underlying systems have not evolved in tandem. What used to be a relatively contained operating environment has turned into a sprawling, fragmented stack, where marketing, storefront, inventory, and operational data all live in different places and rarely speak to each other in a meaningful way.

Teams are left stitching together disconnected systems to answer the simplest of questions about performance or to decide where to allocate resources. Workflows that should be straightforward often require pulling data from multiple tools, coordinating across teams, and manually translating insights into action. At the same time, there is increasing opportunity to layer in AI-powered agentic workflows across the business, yet most teams find that without a unified data layer, these new capabilities are nearly impossible to adopt.

Enter Chord, built from the ground up to empower merchants in this fast-moving environment and position them to scale in an agentic world.

The company’s initial product focuses on bringing together data across a merchant’s core systems into a unified foundation, giving teams clear visibility into their operations and the infrastructure needed to infuse AI across the business.

Under the hood, this is powered by Chord’s context graph, a living data layer that unifies information across a company’s core systems while capturing KPIs, constraints, and historical decisions. Instead of relying on static dashboards or isolated data models, the system builds a more complete picture of how the business actually operates over time, allowing AI to move beyond analysis and begin participating directly in decision-making and execution.

In practice, operators can ask questions, generate insights, and immediately execute workflows without needing to move across systems. Processes that historically required days or weeks of coordination can now happen in minutes, not because the work disappears, but because the system has the context required to handle it more intelligently.

This serves as a gateway towards a much bigger unlock for merchants over time. As the system develops a deeper understanding of each business, it can begin to recommend and carry out actions across marketing, merchandising, inventory, and broader operations, evolving from an intelligence layer into an execution layer that helps run the company.

Early customers include brands like Sonos, Ruggable, Blue Bottle Coffee, and Mr. Beast, each operating at meaningful scale and across increasingly complex channel mixes. These teams are using Chord to move faster and operate with greater clarity across their businesses.

Chord is led by a seasoned founding team that has operated and scaled a large brand firsthand. Bryan Mahoney, former CTO of Glossier, has assembled a team of operators spanning best-in-class talent across commerce and tech.

The team’s journey to this point has not been a straight line. The company went through a meaningful reset in 2025, refocusing around the current AI-driven vision. Since then, they’ve demonstrated the resilience and experience required to build an industry-leading platform that is tailor-made for the nuances and needs of modern brands.

We’re excited to welcome Chord to the Equal portfolio. If you are interested in learning more, check out their announcement or reach out here.

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With a barrel of oil hitting over $100 per barrel, energy prices have come into mainstream focus a lot lately.

For those of us in the energy sector, however, energy prices have become a dominant focus of the last year as the demand from hyper scalers contributes to escalating prices. This trend, however, isn’t solely the fault of hyper-scalers or even the latest conflict in the Middle East. A few years ago, the climate narrative shifted from “sustainability” to “abundance” - a belief centered around the ability to produce endless clean energy, to justify its own consumption. As a life long climate professional, I’m here to say “Fuck Abundance”.

Our economy is already at a fickle state given inflationary concerns and the persistent mindset around unlimited energy consumption places systemic risk to the livelihood of everyday Americans. Utility bills used to be a nuisance…now there can be months where your utility bill is more than your mortgage. Reducing energy consumption used to be a sustainability imperative, but it’s now become an absolutely necessary economic imperative as you’ll see in the data below.

These 10 states are the ones paying the highest % of their monthly income to utilities and the rise in that % has been fairly dramatic over the last 3 years. Keep in mind, the incomes listed here are based on the average income for the state. Those in the bottom third of median incomes spend 16% of their income on energy. And, the utility bills listed here are the average over the course of the year, which is subject to volatility that could make a given month significantly higher than others. When you combine this with the fact that most lower income homes tend to be less efficient than higher income homes, it’s easy to see how utility bills could become a significant impediment to the individuals living in these states.

Equally interesting is the political composition of these states. Every single one of these states went “Trump” in the 2024 election. Counter to the narrative, these aren’t states that are experiencing inflated prices due to investments in clean energy and sustainability, they are actually the ones experiencing the greatest challenges because they didn’t (albeit South Dakota leverages a heavy dose of wind power). The result is that the average American in these states is being hurt.

Another lens that we thought worth looking into were utility bills as a % of a household’s mortgage payment (see below). Folks in South Dakota are now seeing their utility bill be 14% of their mortgage payments. In many cases, that’s going to be significantly more than their property taxes or other monthly household expenses. Anecdotally, I spoke with a homeowner in Pennsylvania who said that their utility bill in January (which was historically cold) was higher than the mortgage payment they had on their home. The average American isn’t used to paying 2 mortgages at once, so this has the potential to place meaningful household harm. Perhaps even more alarming, utility bills represent an even higher percentage of median rent.

The list above remains largely republican leaning, but the introduction of a few “purple” swing states is intriguing. This affordability crisis is largely removed from the surge in data centers. While Ohio and Pennsylvania are growing hubs, most of the other states on this list have relatively benign development. The states with the most data centers per capita including Virginia, Texas and California, would rank 19th, 27th and 48th for “Energy Bill as a % of Mortgage Payment (2024)”. These states are seeing booming AI / data center demand, while investing heavily in clean energy and sustainability, and are subsequently seeing dramatically lower bills as % of the relative income and housing costs.

The fact of the matter is that this problem is going to get a lot worse before it gets better. Our power generation infrastructure is decaying at an alarming rate as coal, nuclear and hydro facilities are extended beyond their previously believed useful life. As hyper-scaler demand continues to grow, supply can not come on fast enough to meet their demand. My contacts within large organizations that are seeking to bring more energy capacity online are sharing that they can’t even get turbines for at least 2.5 years (even when cutting to the front of the line), meanwhile the permitting backlog of projects results in an average lead time of ~4.5 years and the only 19% of projects requesting interconnection from 2000-2019 made it to completion by 2024.

Rising energy prices are ultimately a function of supply and demand. For better or worse, the ability to dramatically impact supply in the short-term is hampered by technological and regulatory impediments. While we can invest in these and progressively address over time, there is only so much we can do to address near-term supply. Given the extent of energy price escalations, why would we confine ourselves to a single side of a two-sided market? Giving up on demand-side management in cutting off half the addressable opportunity.

This is part of the reason why we find batteries and the concept of Virtual Power Plants (VPPs) so compelling, but they are unlikely to be enough and come with their own permitting and supply chain constraints (along with other environmental and economic externalities). The reality is the business case for investments in energy efficiency has dramatically improved amidst a time where we are not only seeing dramatic rises in energy prices, but also dramatic technology advancements that can cut into the largest cost center of energy efficiency - the soft costs of designing, evaluating, delivering and monitoring these projects. Truth be told, many of the largest energy efficiency opportunities are centered around automation and optimization of existing infrastructure, which requires little or no capital investment. We don’t need to build a new grid right beside our partially utilized existing grid, funding tons of new hardware / capex. Instead, we can and should make the grid we have run MUCH more efficiently. Nonetheless, the concept of energy efficiency tends to fall on deaf ears as we continue to pursue our obsession with consumption under the premise of “abundance”.

Unfortunately, we’ve seen this show before. For decades, the oil industry lobbied to expand recycling as means to promote continued demand in plastic production. Beginning in the 1970s and accelerating in the 1980s–1990s, major oil companies and chemical producers—including firms like ExxonMobil, Dow, and Chevron—funded trade groups and public campaigns to convince Americans they could “have their cake and eat it too”. In this fantasy, there wouldn’t be environmental consequences to the unlimited use of plastics, since the plastics would be recycled. Yet here we are 50 years later and only 9% of plastic is actually recycled and we have a pile of plastic sitting in the Pacific Ocean that is twice the size of Texas.

The reality is that you can’t have your cake and eat it too. We need to find ways to curb consumption (especially peak energy demand) to avoid catastrophic outcomes - both economically and environmentally. “Sustainability” no longer motivates this large-scale behavior change, but kitchen table MATH can. The ROI of investments in grid utilization and energy efficiency make sense and are overdue. We need to put storytelling of a make-believe energy economy aside to focus on the math. Failure to do so does nothing more than to hurt the average American.

“F*ck Abundance”

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The Commerce Capital Summit is an invite-only gathering of the biggest tastemakers in commerce - executives from prominent brands and retailers, founders of exciting commerce technology players, and investors across the PE/VC spectrum. Equal Ventures is co-hosting with Google to create a space for real, substantive conversations about the future of commerce.

From the beginning, our goal has been to meet a clear need in the ecosystem: bring together the decision-makers who are shaping the future of commerce as the industry stands at an inflection point. AI is reshaping consumer behavior and augmenting retail operations. Social commerce is rewriting the rules of brand building. The lines between physical and digital are ever blurring. There has never been a more important moment to get the right people in the same room.

We’ve already locked in an incredible group of speakers and will announce more over the coming weeks.

We invite all interested to request an invite here. The Summit is free of charge for attendees and more details can be found at commercecapitalsummit.com.

Commerce is being rewritten - we hope to see you at the Summit!

Shopping increasingly shows up disguised as entertainment. The purchase feels less like a transaction and more like a natural conclusion to a story that your brain has already rationalized.

Impulse buying is not new. What’s new is how efficiently social commerce manufactures the moment. Entertainment contexts, creator-led trust, and algorithmic feeds now do the merchandising for you, shaping why consumers want to buy in the first place. This shift is forcing brands to rethink demand formation as something that happens upstream of the storefront, in places they do not fully control, on timelines that do not respect traditional planning cycles.

The scale of this shift is already meaningful. US social commerce sales reached $87.0B in 2025 (up 21.5% YoY) and the category is projected to surpass $100B in 2026. TikTok Shop alone hit ~$15.82B in US sales in 2025 and is projected to exceed $20B in 2026 and $30B in 2028.

TikTok Shop Retail Ecommerce Sales

Source: EMARKETER Forecast, November 2025

Importantly, the above growth does not currently represent category sales dominance. Social commerce only represented 6.9% of US retail ecommerce sales in 2025, and ecommerce itself was projected to be ~16-17% of total US retail sales in 2025, with Q3 2025 data totaling 16.4%. These facts can coexist.

Even as a minority share of total retail sales, social commerce can matter disproportionately because it is increasingly the point of origin for consumer desire, reshaping how people buy through entertainment and parasocial connection.

What makes this moment distinct is that every major platform is now reorganizing around social commerce simultaneously. YouTube announced in-app checkout for 2026, with over 500,000 creators already enrolled in YouTube Shopping. YouTube CEO Neal Mohan’s 2026 letter explicitly positioned YouTube as a “premier shopping destination,” adding more optimal brand partnership tools and shoppable links to Shorts, as well as making it easier for influencer marketing agencies and brands to find and hire creators.

Instagram is increasingly a discovery engine built around short-form video. Reels captured 46% of total time spent on the platform in the US, up from 37% in 2024, while more than half of Instagram ads now run in Reels. Whatnot recently raised $225M at an $11.5B valuation, generating $6B in GMV in 2025, more than 2x in 2024 with high engagement, about 80 minutes per day and 80% month over month retention.

This is not limited to a single product vertical. “For TikTok, health, wellness, and beauty are top categories, followed by accessories, household items, fashion, and cosmetics,” according to EMARKETER. They go on to state that TikTok Shop’s best-selling items combine low price points, spur-of-the-moment appeal, trendiness, and they rely heavily on strong creator amplification.The breadth of categories gaining traction signals that creator-mediated commerce is becoming a general-purpose distribution model.

We see a number of opportunities as the market moves from renting attention to building scalable entertainment distribution.

Owning The Narrative

Both performance marketing and creator-led commerce are probabilistic systems. The difference lies in who owns the persuasion. In performance marketing, the brand controls the message and pays to put that message in front of people. In creator-led commerce, the brand delegates persuasion to a trusted curator and pays for access to that curator’s credibility, audience, and conversion ability. That works! But brands know that renting credibility comes with structural tradeoffs: you don’t fully control the message, you don’t fully own the audience, and you do not always retain the learnings in a way that compounds.

So, brands are starting to internalize the function, copy-cating mega-creators for insight. MrBeast’s listing for a Creative, Viral Marketing role is exceptionally explicit about the new composite skill that brands are scrambling to hire: someone who can “build engines, not campaigns” and “convert cultural moments into sign-ups, activation, revenue, retention, and repeat engagement.” That is a very different mandate from traditional brand marketing. It is much closer to a creator-growth operator sitting at the intersection of entertainment, distribution, and conversion.

The same logic is showing up in how brands talk about creators. Kat Chan, senior director of brand marketing at Duolingo, put it well: influencers will become “more core to brands than one-off transactional content.” EMARKETER also quotes Business Insider’s Tameka Bazile making the companion point: rather than simply paying creators transactionally, more brands are pulling creator talent closer to the team itself so they can internalize community, fluency, and virality.

The In-House Creator Stack

Large companies are now organizing around this at the executive level. Gap created its first-ever Chief Entertainment Officer role in January 2026 to build and scale its entertainment, content, and licensing platform across music, television, film, sports, gaming, and cultural collaborations. Gap has labeled that broader strategy “Fashiontainment,” and Richard Dickson later summarized the thesis even more plainly: “Fashion is entertainment, and today’s customers aren’t just buying apparel, they’re buying into brands that tell compelling stories and drive cultural conversations.”

You can see this shift take shape through the commerce infrastructure itself, not just organizational design. Sephora launched My Sephora Storefront in September 2025, an affiliate platform that keeps checkout entirely within Sephora’s ecosystem, built in partnership with motom. Within weeks, the program reached 1,000 live creator storefronts, exceeding internal projections. Condé Nast announced Vette, a creator-led commerce platform launching in early 2026, which lets influencers and editors operate independent curated storefronts with Condé Nast handling checkout and brands fulfilling orders via drop-ship.

Brands are proving that they want to own these channels. Owning the channel means owning the creative, learnings, and ideally the customer relationship that compounds over time. Affiliates and UGC then become variable distribution on top of owned content. Though they must tread lightly as EMARKETER found that 26% of consumers distrust any form of influencer marketing, so ensuring these truly feel like entertainment above traditional advertisements will be a thin tightrope to walk.

The New Operational Playbook

Once you bring the creator function in-house, the question shifts from “did we buy the right traffic?” to a harder set of problems: can we manufacture repeatable hits without turning the brand into a roulette wheel? When performance is driven by a fat-tailed content portfolio (most posts do nothing, a few do everything), the temptation is to chase the last spike. And when brand and creator-mediated content lives across TikTok, Instagram, YouTube, and owned channels simultaneously, this challenge can become genuinely complex.

Furthermore, striking success with virality is an operational stress test. When creator-led commerce works, it produces demand curves that look nothing like traditional retail: unpredictable spikes, overnight sellouts, and second-order effects that cascade through fulfillment, customer service, and inventory planning.

Modern Retail’s Feb 2026 case study on Cakes Body and Béis reads like a field guide to burst readiness: Cakes once hired TaskRabbit to ship after selling out overnight, later filled about 15 customer service roles in 24 hours, and kept the engine running by posting with high frequency and amplifying the best content into paid. Béis adds the second-order lesson: “it’s rarely just that one item.” Stockouts become the start of the next moment via pre-orders, wait lists, and hype-building around restocks.

Even TikTok is learning this in public. ADWEEK reported TikTok reversed a plan to phase out seller-fulfilled shipping in the US after pushback from merchants who argued that centralized fulfillment would reduce flexibility, pressure margins, and make viral demand harder to manage.

The Opportunities Ahead

In a world where commerce channels behave like content channels, with demand driven by algorithmic spikes rather than seasonal planning, brands need entirely new categories of tools and solutions. Demand forecasting that incorporates real-time social signals. Fulfillment infrastructure that can elastically scale within hours, not weeks. Customer service automation that handles 10x volume surges without degrading experience. Inventory systems that can convert a stockout into a waitlist into a restocking moment. The operational stack for creator-driven commerce is largely greenfield, and the brands riding the wave today are often duct-taping solutions together in real time.

If you’re building in any of these seams, we’d love to learn what you’re seeing. Reach out to us at sophia@equal.vc and chelsea@equal.vc

Equal Ventures is a thesis-driven, early stage venture firm focused on bridging the digital divide. We partner with founders and businesses deploying technology within legacy industries, specifically climate, insurance, retail, and supply chain.

About the Role

As an Analyst/Associate at Equal Ventures, you will work with the partnership to develop and refine investment theses, source new investments, and support portfolio companies from seed through scale.

You will be expected to own deals end-to-end, represent Equal externally with founders and ecosystem partners, and help level up the firm through content, events, and internal initiatives.

This role is based in person at our New York City office. Compensation for the role will depend on seniority and experience and includes a base salary in the range of $60k–$150k, guaranteed fund carry, and the opportunity to earn an annual performance bonus.

Core responsibilities include

• Proactively sourcing high-quality early-stage opportunities through founder relationships, ecosystem engagement, and outbound channels

• Supporting investment diligence, including market analysis, customer and expert calls, and conviction-driven memo writings

• Supporting portfolio companies on operations, hiring, go-to-market, fundraising, and partnerships

• Building Equal’s brand and presence within the ecosystems that we operate in by producing content, hosting and attending events, and extending relationships with key points of influence in our industries and the broader venture capital ecosystem.

• Supporting the firm’s overall operations: we’re a small team and everyone works together to own workstreams that help level-up the firm

About You

Experience

• 1-4 years of relevant professional experience

• Background in venture capital, growth equity, private equity, consulting, banking or a high-impact operating role

• Experience working with technology companies and/or within our major verticals

Attributes

• Hustle — As a small firm, we win through persistence, perseverance and sweat above all else.

• Professional — Takes immense pride in the detail, thoroughness, accuracy, and overall quality of their work.

• Self-directed — Works with team members to complete tasks without someone looking over their shoulder.

• Team Player — We like everyone in our firm to feel like an owner of the firm, which requires all of us to go above and beyond to support each other and the overall interests of the firm.

• Inquisitive — Obsessed with learning.

• Connector — Brings a depth of venture and industry connections to the table and is eager to build more.

• Integrity — Never sacrifice ethics for economics.

Application

If you are interested, please fill out the form here. You will be asked to respond to the following questions:

1. What are 1-2 sectors or investments that you are most excited about investing in over the next few years and why?

2. What are 2-3 companies that you find particularly interesting that have raised less than $5m? Why do you think they are exciting?

3. What do you like to read or listen to? This could include books, podcasts, blogs, newsletters, journals, magazines, etc.

4. In 100 words or less, why you?

We will follow up directly if there is a strong fit.

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Let’s call it how it is…it’s been a tough month for SaaS believers.

While I’ve never claimed to be a “SaaS” investor, I find the latest drawdown (20% in the last month alone) to be fascinating. What started as a globalized meltdown of the sector based on fear of AI disruption is now morphing into a far more subtle debate as the true merits of these companies.

Truthfully, these were the debates investors should have always been having on these type of companies. As we highlighted in our piece “Death to Revenue Multiples – Long live the DCF”, revenue multiples were always a terrible way to value software companies because each company is built and scales differently. Software companies typically had high barriers to entry (large build and distribution costs) that impeded competition and gave further advantage to scaled incumbents (If it takes each company $5m to launch a new product, but the scaled company has 1) a built in distribution network and 2) lower cost of capital, then they have clear competitive advantage over a startup). This enabled virtually EVERY startup company of scale to generate meaningful profits. Then times changed.

Over the last few years, we started to see the cost of developing and distributing software products come down dramatically, along with an acceleration of capital that significantly broke down those barriers to entry. The result was that a lot of companies grew very quickly, but this was primarily driven by a value transfer of once profitable incumbents (who were now being valued by a function of EBITDA / DCF) to startups (who were valued based on revenue multiples, indiscriminate of the underlying economics of these companies. While I’m most traditionally a seed-stage investor, looking at the financial statements of later stage companies would break my brain. Companies were spending endless dollars on “R&D” which was really just to maintain product parity with the market. The same went for promotional discounts, customer success and other items that made it clear that if the spending ever stopped, that these companies would churn customers and become irrelevant. The terminal value of these companies is truthfully “ZERO”…there was zero chance for them to ever achieve FCF profitability. Nonetheless, the broader market would value them on a growth-adjusted revenue multiple and investors were happy to fund the tab.

Now, AI has put this dynamic on steroids. The costs of developing and distributing software products has collapsed more in the last 12 months than it has in the last 12 years. This is what scares SaaS investors, as the cost of maintaining revenue growth for standard SaaS companies is skyrocketing. Folks are questioning who is going to flip the bill to maintain customer and market parity (let alone growth) and realize that there is an existential threat to the survivability of these companies. SaaS was just another “product” and like any other consumable, could be easily copied, produced cheaper and its momentary profits seized. Truth be told, many of these companies could (and undoubtedly) will, go to ZERO.

The reality, however, is that not all revenue is created equal. Amidst the landscape of SaaS slop, there are great companies. Ones that maintain durability via competitive advantage (or what we refer to as “Capabilities” and are actually being accelerated by AI.

Take a look at the chart below. This is the estimated “AI” revenues for a company that I’m personally invested in. Zero to nearly $2b in 3 years, not bad. What value would be put on an AI business that went from zero to $2b in 3 years when we see the best firms in the valley giving $500-$1b valuations for startups with $1m of ARR? AI is only part of the business for the company, but the overall business is demonstrating nearly 40% EPS growth (yes, its profitable), yet only trades at 4x sales, 14x EBITDA and 14x forward PE.

Most of you have probably figured this out already, but the company below is Salesforce (who I believe will be a huge beneficiary from AI) and is trading at a market cap of ~$175b despite over $40b of trailing twelve month (TTM) revenues. Salesforce is a great example of “the baby being thrown out with the bathwater”, as great companies are being beaten down indiscriminately from the bad ones amidst the SaaSpocalypse.

As you look across the SaaS landscape, there are known pockets of resilience. Companies that have built in developer platforms, cross customer network effects and/or maintain the system of record for their clients and the industry. We don’t view these companies as “products”, we view them as “platforms”, given the inherent flywheels in their business / product that enable compounding competitive advantage. These companies may (and often do) yield a low NPS score, but they are amongst the highest retention companies in existence. That’s not a sign of weakness, but rather of strength. Despite the countless startups that have attempted to take them down, nothing has stopped these companies and AI is likely an accelerant to the existing advantages of these companies by enabling them to rapidly develop, launch and distribute new features and customer experiences that they previously couldn’t…all at a fraction of the cost of what it would have previously cost them and a fraction of the cost of what it would cost upstarts to achieve parity.

In 2024, we dove into this dynamic and allotted each of the companies in Bessemer’s Cloud Index to “Product” or Platform”. What we found is that Platform companies demonstrated superior operating margins, FCF yield and Rule of 40. They tended to grow a bit slower, but they were superior businesses, yielding higher multiples. To my surprise, when we reexamined the revenue multiples of these companies to their SaaS peers, their multiples came down as much or more (see below). Many of the SaaS companies had made significant efforts to improve their efficiency metrics (Rule of 40 improved from 43% to 50% for our comp set over that time period), but that still dwarfed in comparison to the nearly 70% demonstrated by our platform bucket. Despite these sets of companies operating remarkably differently with entirely opposing positioning in today’s AI-fueled market, the entire basket was indiscriminately treated with a large draw down.

All this is to say that this “SaaSpocalypse” is temporary. To paraphrase Benjamin Graham, ‘The market is often wrong in the short-term, but always right in the long-term”. The destruction (or at very least, devaluation) of “product” SaaS companies is an inevitable and truth be told, I still think they are criminally over-valued. Many of these companies will die. The product platforms, however, will likely experience a very different fate and today’s lows may represent a generational buying opportunity.

As a founder, you need to be architecting your company as a platform from Day Zero, embedding the aspects of compounding competitive advantage into your product from the start. This tweet from my friend Jeff Morris Jr. sums it up well…”you need to spend less time on building an MVP in 2026 & way more time on product strategy”. As an investor, this is even more emphatically true…nothing is worse than investing in a road to nowhere and companies that are living on product pull without a defensible strategy are likely doomed to failure.

In the age of AI, build platforms, not products. Otherwise, you might as well be investing your time and money into dirty bathwater.

Frank Tanner of Morgan Creek has a fabulous framework for evaluating managers. He calls it the “5 S’s” – Source, Select, Secure, Support and Signal. As I think about how we’ve always handled our own performance management process for our team, it very much aligns with these 5 S’s focusing on sourcing, research / market intelligence, deal evaluation / execution, portfolio support and branding / marketing.

For a long time, I found little value in branding / marketing as part of an investment firm. From my naïve POV, our job was to invest in non-consensus companies, which very much meant that we should be finding opportunities that others weren’t. I saw folks preaching that VC was an “access” game and dismissed that as group think chasing momentum in over-priced deals. This led me to prioritize research to find the uncovered gems, knowing full well that I wasn’t going to beat Sequoia (either in clout or in check size) in an all-out dual.

Things changed dramatically when I started Equal. Some of our readers have likely heard this story in various different forms, but the process of starting a firm required me to build new skills. As one of my strongest LP connections told me when starting the firm, “Rick, I love you, but you have no juice…you have no brand.” They weren’t wrong. I had a solid track record with some early unicorns and real DPI, but very few in the venture community knew or cared who I was. This made it incredibly difficult to raise.

As we finally got Equal off the ground, I had put more effort into developing a brand – more so because this was clearly something LPs cared about, rather than me thinking it would actually benefit our investment process. It wasn’t until a friend of mine called me out during one of our peer circle sessions over Covid that things clicked. As long as I’ve been an investor, I have always written very detailed research reports on the spaces I like to invest and memos for deals I like to invest in (even a seed stage investment generally warranted a 20+ page memo). While I have many faults, seldom do folks fault me for the level of work and thoroughness I approach a given space or investment opportunity. To me, this process has been essential for me to build conviction as an early investor building a track record and I found warmth in the security blanket of being able to show my homework as if to say “Even if this deal doesn’t work out, look at all this fancy work I did. I swear, I’m not dumb or lazy!”

One day during one of my peer circle sessions, I was outlining my work for a recent investment when one of the other participants called me out saying, “Rick, you do all this work, but none of it ever sees the light of day. Maybe 10 people see this. Why are you being such a wuss?” At that point, I had never shared my theses or work publicly. Folks knew a few spaces I was broadly interested in, but I didn’t want to box myself into a corner and I was afraid that folks would poke holes in my work. As I outlined my rationale, the other participant in our peer circle told me “That’s an ego problem, not an economic one. You’re worried that people will disagree with you and hurt your feelings. Meanwhile, holding this back is hurting your companies, your firm and yourself. You need to put this out there and you will figure out whether people believe you or not, but doing all this work to let something sit on a hard drive is pointless.”

From then on, we started publishing some of our research reports (some of which have been viewed hundreds of thousands of times) and have become increasingly prescriptive as to where we would like to invest. While the messaging behind what Equal invested in was previously murky (which was a consistent point of feedback for passes during our Fund 1 raise), we now were able to tell people exactly what we were looking for. Before long, we stumbled on the “prepared mind” narrative and it’s become synonymous with our firm’s brand since.

This single push ultimately became one of the most impactful catalysts for our firm. All of sudden, I had VCs and customers reaching out to me to show interest in the findings that we developed. These folks became thought partners, expanding our universe of ideas and ultimately the networks that we could bring to a company. This also greatly benefited the companies – every single investment we made that had a thesis deck behind it (or what we have subsequently coined as “Prepared Mind Deep Dives”) was ultimately marked up…every single one. These reports became rally cries of a sort. We developed conviction as a team, we amassed a critical mass of customers/partners for that thesis through that process (generally aiming for several million dollars of pent-up revenue demand prior to investing) and could assess the interest of potential down-stream investment partners based on the work we published. While this work was extremely slow and methodical, it did enable us to marry our conviction behind a company with the connections and capital necessary to give these companies a marginally better chance at winning. This was immensely impactful in helping us find off the beaten path companies and heling them transition from “non-consensus” to “consensus” – where we believe the alpha of venture capital exits.

Over time, things have changed. We continue to be extremely research-oriented, but the velocity of seed makes the job of finding needles in a haystack more challenging than ever before. We still “hunt” (which is what we call our out-bound driven approach to finding the off the beaten path opportunities), but we certainly are seeing a lot more founders walk in our door than in the past. Over the last few years, we’ve developed and expanded our “hatch” strategy, which is working with repeat founders to start their next great company. Over the last 2.5 years, we’ve now done 6 of these and the current or exited combined enterprise value of the founders’ prior companies is nearly $10b. In each of these cases, we’re still doing our exhaustive research, amassing a critical network of customers and sharing our research with downstream partners to empower that “rally cry” effect, but are gaining access to founders that normally wouldn’t work with a firm like ours (we had previously invested in the founders’ prior companies in just 2 of the 6 cases). When I asked one of our most accomplished teams about why they decided to come to us, they said “I was asking folks who knew this space really well and yall’s name kept on coming up. I hadn’t even heard of you or Equal, but I realized that if you knew this space as well as others said you did, you could not only be really helpful, but also set a really powerful signal for future rounds.” I thought to myself, “signal”?

Fast forward to 2026, I’m seeing some companies raise at $1b valuations on <$1m of revenue. Those companies may be in the same space with identical metrics to companies that go unfunded. Why? Because of signal. I was speaking with a peer recently and he was telling me about one of his portfolio companies that recently completed its Series A with a top tier VC firm. We know each other well enough that I spoke to him candidly, “To be honest, I’m surprised. I heard that company was struggling, is it working?” He responded, “Not really, but Sequoia was in the seed so everyone was chasing it. Process was ferocious.” The single fact that Sequoia was involved in the deal (in what was a miniscule check compared to the quantum of capital they manage) incited a bidding war for a company that was not objectively performing. The reason why? Because Sequoia has signal.

We’re in an investment market that subjectivity reigns supreme. For better or worse, objective financial performance means nothing compared to the heat and momentum a company can generate behind it. We see high growth companies with outstanding metrics raising at single digital revenue multiples and others with comparable performance raising at several hundred times revenue. As a value investing disciple, it breaks my brain. Ultimately, these companies need to measure up to the valuations they’ve raised at, but undoubtedly, it’s far better to have these conditions as your tailwinds, than as headwinds. Being on the right side of that equation not only means less dilution and dramatically lower cost of capital, but it can be a powerful tool to help attract talent, customers and additional financing partners. All of this won’t win the game for you, but it certainly increases your margin for error. This forces us to evaluate with our companies how to turn market perception from “non-consensus” to “consensus”.

In a market that is rife with subjectivity, determining how to set signal is paramount. Often, founders can do this themselves. With most of our “hatches”, the founders are driving the signal far more than our research and business development support. But for off the beaten path opportunities, investor-led signal matters more than ever before. We’ve seen investors go from ignoring founders to clamoring after them once they have a reputable lead (who wouldn’t want to co-invest with a multi-time Midas lister?). We’ve seen customers do the same, racing to be the 2^nd or 3^rd “early-adopter” to a nascent company, after seeing it validated by someone else. As a partner to these companies, we repeatedly ask ourselves, “How can we better help this company show signal in the market?”.

We press upon ourselves to help set that signal through research, our “bridger’ networks and our industry summits. It’s more powerful in some areas than others, but a friend of mine at a top-tier venture firm said it best “Rick, if you guys do anything in these sectors, we’re going to take a hard look. But the second you go outside of those, we couldn’t care less.” Harsh, but ultimately very clarifying.

Once successful, signal sets itself (I don’t think Bill Gurley or Fred Wilson would need a 20 page research report to get people excited in a deal they are doing), but as an early venture professional and/or emerging manager, finding your path to signal is as existential as oxygen.

Follow the conversation on LinkedIn and X.

Next week will mark 3 years since my Grandmother passed.

She had a tremendous impact on my life and was always one for words. She dedicated her life to her family above all else, but she was also tough. She wasn’t the type of person to have embroidered pillows, but if she did, they’d have some of her favorite expressions like “You are lucky to be living” on them.

She appreciated everything that life gave her, but whining and excuses were not allowed. As I grew up, there were always plenty of things that I could complain or make excuses about, but she always had some quip back to me to assert, ‘So what are you going to do to fix that? The world isn’t going to do it for you.’ These little nudges had a big impact on my life. I’ve been knocked down a bunch along the way, but the folks who know me best, know that I get back up.

As a parent now, I think a lot about instilling those values in my kids. I’m a big fan of Angela Duckworth’s book “Grit: The Power of Passion and Perseverance” and candidly worry about the lack of resiliency across the social fabric of our society. We live in a world where scapegoating is endless. Not only is that misplaced, but it’s entirely unproductive. As Teddy Roosevelt once said, “Complaining about a problem without proposing a solution is called whining”. I love this quote so much that I had it put up on the walls in our office. Our job as founders and funders isn’t to identify the problems, it’s about finding the solutions. That’s how you win – finding solutions to problems over and over and over again. If you do that consistently over a long time horizon, you will achieve far greater success than simply identifying and whining about the problems.

The other day, I saw a post about a Stanford study highlighting that repeated complaining actually weakens your brain and strengthens stress pathways. The simple act of complaining about something actually engrains neural pathways in your brain that not only make you complain more, but make you less happy. Who wants that? The scaffolding of our minds is always evolving, but changes aren’t sudden. They compound over long time horizons to enforce increasingly stronger pathways. This is the basis of cognitive-behavioral therapy - identifying unproductive behaviors and consciously altering your responses to enforce more productive patterns to the point that they become instinctual. No one is born a “whiner”, but more importantly, no one needs to remain one.

As a father, this is a lesson I try to instill with my kids every day. One of the favorite expressions we have in our household is “Are you a winner or are you a whiner?”. My kids know the answer and they know that it’s far preferrable to be winners > whiners. Not only is this one of the fastest parenting hacks I’ve seen to get kids to stop complaining (which every kid is going to do from time to time), but it’s also part of my long term efforts to ensure that my kids are establishing the neural pathways for solving problems, not just complaining about them. I ask them what we can do to solve whatever they are having difficulty over. I ask them how they can contribute or take control over solving that difficulty. I then ask them what they think they can do even better next time. I’m not qualified to give parenting advice, but I’m hopeful that my intention and efforts result in my kids establishing the pathways and tools necessary to tackle the problems they will face in the years ahead.

As I think about founders, there are just some folks who know how to win. They do it over and over and over again. It’s not a secret that when you’ve had success once, it gets easier to achieve the next time. Often the “wins” get bigger each time, too. Elon Musk didn’t start off with Tesla or SpaceX…those came after starting Zip2 and X.com (which ultimately merged with PayPal). He learned how to “win” and kept on winning. As David Faber from CNBC said the other day “I don’t think you can ever bet against Elon…he just knows how to win.”

As this Stanford study asserts, winning isn’t an inherent skill, it’s something learned. Tom Brady didn’t win national championships at Michigan and Elon Musk didn’t sell his first company for a billion dollars, but as I look at the most successful folks in society, they have developed and reinforced patterns that enable them to win. They don’t complain about problems, they solve them. They attack them head on and are ruthless in their self-improvement to identify pathways to help further improve their odds of winning. I often come back to this Tom Brady quote, “To be successful at anything, the truth is you don’t have to be special. You just have to be what most people aren’t: consistent, determined, and willing to work for it.” That’s how you win, not by scapegoating, whining or complaining, but by consistently showing up with the determination and work ethic necessary to take small wins and compound them into big ones. That’s how you learn how to win.

If you are a founder (or board member), don’t just identify problems, solve them. Stack the solutions on top of each other and sure enough, you will be sitting atop some wins. Those wins can help catapult you to even bigger wins. Complaining about the problems isn’t going to get you anywhere and will only reinforce patterns to failure. As Robert Frost once said, “The best way out is always through.” I can safely say that Grandma Zullo would approve of that.

Last month we presented to our LPAC and shared our “State of the Venture Economy”, alongside the usual general updates that we do for such meetings.

Unsurprising to many that I speak with frequently, I’m pretty concerned about the state of the overall economy and capital markets. Even since last month, we’ve seen fairly unprecedented events (the Japanese bond market…) making me worry further about the state of markets.

I often return to this graphic from Boom and Bust: A global history of financial bubbles, highlighting the 3 core ingredients for bubbles to exist – speculation, marketability and money/credit. It’s safe to say that AI has incited each of these and as I see the state of the economy, valuations, wealth concentration, leverage and actual execution, it seems that we’re tempting the fate of a pullback yet again.

Amidst this, there are two major dynamics at play – a grossly over-priced seed market and an increasingly concentrated of venture players. I outline in the deck the data supporting these factors, but also some of the practical implications of this that could make life for emerging managers and certain companies very difficult.

My desire is not to be the wet blanket, but to be prepared for the fight ahead. I believe showing restraint when others are “all-in” is a prudent act of risk management to ensure our companies can achieve full maturity and our firm can continue to compound in the years to come. As I wrote about in the Fortune of Failure (initially shared with LPs back in Nov. of 2021 and later published in 2022), I think there is a lot that fund managers and founders can do to build resiliency against market swings like this. Information is the strongest defense mechanism for market volatility and I want to do my best to make sure that everyone is armed with as much information as possible, regardless of whether they choose to utilize it or not.

Plenty of folks have come to different conclusions on the state of the market (including A16Z, which coincidentally released a similar report today that is chalked full of amazing insights) and that’s completely fine. They could be right and I hope they are. The benefit of being a bear in a bull market as a venture capitalist is that when you are wrong, you know that you’ve left money on the table, but ultimately you have done very well. If you are a VC bull as the market turns bearish, however, that’s when things can get dangerous very quickly. For me, I’d personally rather take my risk on partnering with the best companies, rather than the movement of market cycles.

We don’t quite have the research or production team of A16Z, but I’m hopeful you find value in some of the data and insights from our “State of the Venture Economy” report. As always, we welcome feedback and encourage you to engage with us via our posts on Linkedin and Twitter if you can.

With that, please take a look at our full report here.

Follow the discussion on LinkedIn.

As some of you may have seen, we already posted our 26 predictions for 2026 a few weeks earlier. We did this year’s predictions as a team, but it nudged me to reflect on my predictions from last year to see how we fared.

I tried to make these predictions provocative at the time and the results are rightfully mixed. We’ll see how these trends fare as we head into 2026, but after a wild end to the year, I can safely say that we’re teed up for an ever more wild 2026.

1. The stock market will see a correction of at least 15% with technology stocks taking the biggest hit - RIGHT

While the stock market ended up double digits for the year it toppled >15% from beginning of the year and nearly 20% from it’s top. Technology stocks were certainly hit the hardest amidst this rout (Nvidia started the year north of $150 and hit a lot of $86 a share, a 43% drop), but ultimately bounced back to new all-time highs (it’s now in the high $180’s). That said, while we saw some weakness in software, but the AI-related trade more than covered for those losses.

Nonetheless, the same things that I was concerned about in 2025 leave me concerned on an even more sincere level in 2026. Valuations remain incredibly high (Tesla is trading at >100x EBITDA despite double digit declining sales) and we have the added complication of immense CapEx investment that hasn’t fully materialized in the income statement or balance sheet. As I’ve noted elsewhere, many of the top AI players are gamifying the depreciation schedule of their AI-related infrastructure (extending it well beyond it’s ACTUAL usable life to reduce its cost in the current year) and saddling up to off balance sheet SPVs for data center build outs – both factors that place a tremendous amount of downside risk to the system (as evidenced by rising CDS cost of large infrastructure build out plays like Oracle and Coreweave). These liabilities could cripple these companies (sending shares down dramatically) if momentum in AI falters and given the wealth concentration behind a consolidated list of Mag7 names, a down pattern likely couldn’t be contained to the tech sector.

2) We’ll see more defections from big VC funds and more emerging managers “growing up” - MIXED

The outcome on this one was a bit more ambiguous. We saw some major defections from VC mega funds, especially at the largest firms. There is a clear cultural shift that’s happening at many of the big shops and it will be interesting to see how it plays out in the years to come as these platform funds were able to reload on capital without issue, enabling them to attract talent to replace the departures.

As for emerging managers “growing up”, that was far less definitive. A few of the leading emerging managers started in the last decade raised funds (many of which at still unannounced), but I don’t think we saw anyone really steal the torch from incumbents. The real breakouts seem to be coming from the generation prior (those firms started in 2005-2015). There are a few firms really starting to heat up (folks like Kindred and Conviction come to mind, but there are many more), but given the massive growth of the larger platform firms (including the emergence of Thrive as one of those firms), it’s hard to make the case that we saw a major maturation of the emerging manager ecosystem.

3) A record number of funds will close up shop - RIGHT

I don’t have the data to support this claim, but anecdotally, this seemed to be right on. While it takes a long-time for firms to “die”, I know of a LOT of funds that effectively shut down operations, laid off staff, were acquired and/or returned capital. 2025 was a BRUTAL year for emerging manager fundraises (after a very favorable environment in 2021-2023) and many managers found themselves struggling to raise successive funds. Deep in their deployment cycles, this has left a lot of managers absent capital in an environment where the major platform funds have bid up seed-stage pricing to a level that makes seed investing (where emerging managers generally play) incredibly difficult. A decade ago, simply being in the pack of top quartile seed deals was enough to earn good returns. Now, that looks increasingly difficult and having a “right to win” is more important than ever. I’ve seen some incredibly prominent managers decide to take their ball and go home and suspect we’ll see more leading into 2026 unless there is a major turn-around in fundraising.

4) Tech and Trump break up – WRONG

I successfully called that the marriage between Trump and Musk would be short-lived, but the tech/VC community has gotten far more cozy to Trump than I ever would have anticipated. I theorized that Trump would ultimately have to choose between his traditional MAGA base and the traditionally left-leaning utopiast from the tech world, but much of the tech world has largely abandoned their leftist policy in favor to jump on the MAGA bandwagon. Whether this is a reaction to the impacts of left leaning policies in CA and more recently in NYC or simply the tech community chasing the favor (and dollars) associated with being in Trump’s inner circle, the tech community has shown far greater support for Trump than I anticipated. Keep in mind, it wasn’t long ago that venture capital firms put “F*ck Trump” on their homepage, so to see the broad support we are is fairly surprising.

5) America gets back to “business” – RIGHT

When I wrote this, “9-9-6” was not yet a “thing”. It’s crazy how much a difference a year makes and while we may be past peak “9-9-6” culture, America decidedly got back to business. Folks are bragging about sleeping in the office, culture is far more formal than I’ve seen in recent years and everyone is obsessed with “building”. Given the amount of capital available to founders, companies are tackling ambitious agenda’s with a heavy American Dynamism tilt (which outside of AI, was clearly THE category of interest) and now we’re seeing VCs opine on their new-found expertise in energy, manufacturing and defense policy at a level I haven’t seen since plethora of medical opinions we had from VCs during the pandemic.

I, for one, am ecstatic with the back to business mindset and it’s been great to see so many companies/teams moving with the pace/velocity/execution they are. In many respects, this is leaving a lot of cultures that were forged during the pandemic (which I would largely say were far more focused on work-life balance) in the dust, especially as the AI race provides a perceived prize that could potentially justify the hours, commitment and sacrifices made by these teams. Only time will tell, but I’m all for us getting down to business and hope this continues into 2026 and beyond.

That’s it folks, some right and some wrong. As always, I welcome feedback on our takes and how these trends will evolve in the years to come!

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“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” - Aristotle

Every year, I try to give myself a rally cry – something that will serve as my manifesto for the year. Historically, I haven’t publicized these, but those around me hear them early and often (likely to the point of ad nauseam). That said, I think these rallying cries warrant their purpose. It’s impossible to capture everything you want to accomplish with a single line, but simplifying your priorities into a single constraint often provides a lot more clarity.

I’ve been thinking a lot about my rally cry for this year over the last few months and really latched onto it after Thanksgiving. Last year was a year of historic highs and lows for me, leaving me craving consistency to level out that volatility. Consistency, while almost ultimately unattainable, brought a lot of rigor and efficiency to the endless queue of tasks I had to take on for our firm and my family over what was an unprecedented year. Simply put, it was the only way – show up and make sure that I treated every day like it was existential.

As I think about 2026, it’s my objective to make that consistency not just a survival mechanism, but a force. The beauty and curse of being in this business is that you become a sociologist of sorts – you are constantly interacting with different cultures across the companies and investment firms you work with, enabling a rare opportunity to see the best (and worst) practices across each. I’m on over a dozen boards and I can safely say that each culture is unique. When interacting with the founders of those companies, they are equally unique. But what is not unique is the consistency I see in the highest-achieving founders and organizations. The highest achieving of the bunch make commitments and keep them. They make audacious goals knowing the sacrifices necessary to achieve them. They don’t treat the fate of their business as a random walk, but rather something deterministic and self-correct decisively whenever they deviate from the path of success. Simply put, they commit to excellence.

Tom Brady has a quote that really spoke to me, “To be successful at anything, the truth is you don’t have to be special. You just have to be what most people aren’t: consistent, determined, and willing to work for it.” For someone who is devoid of any special abilities, I found this really inspiring – that I TOO could be successful as long as I was consistent, determined, and willing to work for it (although I don’t think I ever had the frame to play in the NFL or to be successful at any professional sport for that matter). But I think that quote only shows one side of the story. We are a function of our own flywheels and that street goes two ways – negative habits reinforce negative habits and positive habits reinforce positive ones. The trick is making sure that your own flywheels are headed in the right direction.

2025 brought a resurgence to work ethic with the popularization of “9-9-6” culture, but I think “9-9-6” fails to address the true core of what I found myself craving. I believe in productivity > activity. I‘ve worked enough 100+ hour weeks to know that hours worked is not the yardstick for achievement. I now appreciate the flexibility that I have to work when, how and where I can be most impactful. What matters more than when and where, however, is the how.

I’ve long believed that rules, KPIs and most goal frameworks are subject to gamification, especially if they aren’t artfully structured. With that, I’ve tended to focus on objectives and principles – constructs that serve the true intent of what you are hoping to accomplish and guide your actions in support of those. This is why the rally cry has been so critical to my prioritization, acting as a guiding principle for my actions throughout the year. As I put on my sociologist hat, I see the highest performing people and organizations share a singular principle. A commitment to excellence. There is a famed Buddhist principle that says that “How you do anything is how you do everything” and as I look at the highest performing people I know and follow, they treat everything (at least everything relevant to their businesses) with a commitment to excellence. They don’t cut corners, they don’t wait for success to find them and they don’t take it for granted when they achieve it. They make investments and sacrifices to get it right whether it be the most mundane of customer interactions or the “make or break” moment for their companies. They stack those moments on top of each other each day, compounding that commitment and making the process of achieving excellence the default, not the exception. They don’t revel in glory when they achieve success, they get right back to work and build on that commitment. When you treat mundane customer interactions with a commitment to excellence, you are positioning yourself to outperform in those “make or break” moments where excellence matters most.

This leads me to my rally cry for the year from no other than Aristotle – “We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

As I think about the powerful framing of this quote, it gets me incredibly excited for the year ahead. While I know I will stumble and fall endlessly on this path, my objective/principle is to commit to the habit of unlocking excellence. I’ve discussed this quote with a few of my founders already (one of whom fed me the “How you do anything is how you do everything” line) and it prompted some worthwhile discussions. Not so much on whether they were committed to excellence, but whether they were holding their teams to the same lofty expectation. That’s hard to do across large, fast-growing and heavily complex organizations, but if we’re really being honest with ourselves, the best organizations embed this ethos into their culture. Their employees don’t just “9-9-6”, they commit to excellence and do what it takes to achieve that (regardless of whether that’s a 50 hour work week or 120).

I’ll be the first to acknowledge that you can’t be excellent at EVERYTHING – it simply isn’t possible given the tradeoffs implicit with limited time/resources. But you can choose what to prioritize and to form habits around those to make achieving excellence easier. Unlike in football, venture is not the function of being born with special capabilities – it is a function of showing up with consistency, determination and the work ethic necessary to do the job right. That is something that we can all achieve if we set our minds to it. That’s what I’m committing to in 2026 and I hope you will too.