My 2024 EOY Update

As we approach the end of 2024, I wanted to share a quick update on what I’ve been up to:

I’m still in Arlington, VA, and the kids are growing up nicely. Part of me still can’t believe that I’m now a suburban dad who spends weekends in a folding chair on the sidelines, shouting out “pointers” during soccer games, channeling my inner Jose Mourinho (Pro tip: there's a great mobile app opportunity to explain the 4-2-3-1 in a TikTok-style format).

Throughout 2024, I’ve been advising multiple startups and universities on conducting customer development, go-to-market strategies, technology commercialization, and various approaches to fundraising. This consultative experience has allowed me to stay updated on emerging technologies and market sectors that are poised for growth. I’ve been active on LinkedIn, posting articles about my observations, and I’ve been updating my blog as well. Additionally, I maintain a presentation archive with both current and past observations.

With the explosion of new AI tools, the resurgence of semiconductor-driven computing, and the increasing importance of proprietary data, I believe we are at a pivotal moment in the business cycle. There is a significant opportunity for both operators and investors to assist existing companies in adapting to these simultaneous waves of emerging technologies by launching new products and services from their current platforms.

When I look at my own portfolio of limited partner investments in venture funds, it's obvious that something doesn't work with the current venture model. AI has turned into a capital-raising arms race, where only a fraction of the entrepreneurial talent pool is raising disproportionate amounts of capital, thus creating a competitive barrier and shutting out the vast majority of viable ideas. Companies are staying private for much longer, thus obliterating the 10-year fund model, and creating a glut of pre-IPO companies with no liquidity for insiders or employees for a decade or more. This also affects the ability of emerging managers to establish their first funds, as I maintain that it no longer makes sense for most individual investors to become LPs simply because the investment duration is much closer to 20 years than 10.

This latter point is one of my more significant learnings over the last year. I say this on the eve of receiving a distribution from a venture investment I made over 20 YEARS ago. 20 years is 4-5 startups' worth of vesting cycles based on the traditional venture model; once upon a time you could have started and exited 4-5 companies in the same time it now takes to get a single LP distribution. That leads me to the conclusion that with the exception of institutional LPs investing on behalf of an endowment, or multi-generational family offices where there is already a second generation overseeing investments, venture has now shifted out of the window of viable strategies for most individual investors and passive corporate limited partners.

Informed by these and other insights I've gained during the course of 2024, I have decided to step back into an operational role in 2025, where I can apply my "two lenses" of innovation and investment to increase enterprise value.

I am particularly interested in doing so where I can combine three key areas:

1. Identifying undervalued, emerging technologies and sectors for investment where the return window is more "evergreen" than the standard VC window.
2. Launching new products that serve the Enterprise market.
3. Generating B2B revenue through partnerships, alliances, distribution agreements, and royalties/licensing.

Thematic areas that I find particularly compelling include:

1. Enterprise AI, especially the evolution from SaaS to customer-driven LLMs.
2. Vertical SaaS.
3. Defense and Homeland Security technology.
4. Commercialization of the $180B+ of federally-funded annual R&D investment.
5. Fintech/crypto in the Enterprise

I would greatly appreciate insights on companies/new ventures in these spaces. I'm always open to hearing about exciting new companies and offering help where I can.

I hope you close out 2024 in style, and I look forward to collaborating with you in 2025. As always, let me know if I can be of any assistance.