Alex Menn

raising Fund II has never been harder. only 12% of first-time VC funds from the 2022 vintage have raised a second fund so far. here are 7 reasons i think so many struggle 1. they're better at fundraising than investing some managers are great at telling LPs what they want to hear. they have a compelling story, a convincing deck, and a thesis that sounds amazing. but can they actually pick companies that will generate returns? that's a very different skill. 50 out of 99 VC funds failed to return invested capital after fees, while 62 out of 100 failed to outperform public markets after fees and carry. the problem is that you won't know the final results for years. by the time Fund II fundraising comes around, LPs are already judging you on early portfolio performance, the quality of your decisions, and whether your original thesis is playing out. you need to show progress before the exits happen. 2. they have no real edge in deal flow venture returns are driven by a tiny number of exceptional companies. less than 4% of invested capital in its dataset of venture-backed exits generated returns of 10x or more. everyone wants those winners. but how are you actually going to find them and get onto their cap tables? if your strategy is just going to events, asking for intros, and competing for the same deals as everyone else, you're going to have a hard time. you need a real reason why the best founders would come to you, ideally before everyone else knows about them. otherwise, you're often left competing for deals that stronger investors have already passed on. 3. they don't have a plan for their winners finding a great company is only half the job. you also need enough ownership for that company to make a meaningful difference to your fund. i think this is where follow-on strategy becomes really important. as an existing investor, you get to see how founders execute, how the team works, and whether the business is actually delivering on its promises. that information can give you a real advantage when deciding where to put more capital. of course, doubling down doesn't always make sense. valuation, dilution, and concentration risk still matter. but if you've found an exceptional company, you should have a plan for how to benefit from being right. 4. they can't explain why LPs should choose them this one is pretty funny. VCs constantly ask founders what makes their startup different, why they'll win, and why anyone should invest. then some of those same investors go out to raise their own funds and struggle to answer exactly those questions. what's your investor-market fit? what's your edge? why should an LP trust you instead of giving that money to an established manager? especially when you're starting out, you need a convincing answer. and the fundraising environment isn't making things easier. only 81 first-time US VC funds closed through Q3 2026. 5. they're competing in a market where capital keeps concentrating this is probably the toughest part because even good managers can't control it. through Q3 2026, US funds of $500M+ captured 78.1% of all VC capital raised, despite representing just 6% of funds closed. firms raising their fourth fund or later took 88.2% of the capital, while the median fund size fell to $10M. think about that. huge amounts of money are flowing into venture, but most of it is going to a relatively small group of established firms. a new manager can have a strong thesis, good founders, and a promising portfolio and still struggle to raise the next fund. 6. they underestimate how much LP relationships matter i've seen how important this is. some managers only start building LP relationships when they're ready to raise, but by that point, they're already behind. LPs want to know how you think, how you make decisions, how you handle problems, and whether they can trust you over the long term. regular updates, honest reporting, and actually understanding what matters to each LP can make a huge difference. ideally, by the time you start raising Fund II, your existing LPs already know exactly why they want to invest again. and if they don't, you should understand why long before fundraising starts. 7. they don't think enough about liquidity this one is becoming increasingly important. a fund can have impressive paper returns, but LPs can't reinvest unrealized gains. TVPI matters, especially early on, but DPI tells a different story. at some point, investors want to see actual distributions. and when exits slow down, even funds with strong portfolios can struggle to return capital. that doesn't mean every Fund I needs substantial DPI before raising Fund II. but managers should understand their portfolio's path to liquidity and be able to explain it clearly to LPs. here are a few investors who recently raised their second funds and are worth following: @JedBreed, @jakobdiepen, @brettcalhounn, @yoheinakajima, @jamoses92, @kola_aina

here's what you need to understand if you want to start angel investing or launch your own fund: 1. be memorable. think carefully about your brand, what you stand for, and how you position yourself. especially when you're just starting out, quality and originality can make a huge difference in how people remember you and whether they want to work with you. 2. find your investor-market fit. why should LPs trust you with their money? what's your track record, and what unique knowledge or expertise gives you an edge? you need a clear answer to these questions if you want to raise a fund and succeed as an investor. 3. build your network. strong positioning and a good track record will help, but relationships are what bring you the best opportunities over time. a lot of your best deal flow will eventually come from people who know and trust you. just remember that knowing everyone means very little if you can't actually deliver results. 4. give useful feedback, even when you pass. i think this is underrated. if you're rejecting a deal, take the time to explain why and share something genuinely valuable. founders remember investors who understand their market and give thoughtful feedback. sometimes they'll come back in a later round, and sometimes they'll recommend you to other founders. 5. know exactly why you're investing. you need a clear thesis and a good understanding of what makes a particular opportunity worth backing. write an investment memo, structure your thinking, and make sure your reasoning actually holds up. 6. understand what you're investing in. don't just repeat what the founder told you in your investment memo. fact-check the claims, challenge the assumptions, and figure out whether the business makes sense. talk to people who've actually built successful companies in that industry. their feedback can save you from some very expensive mistakes. 7. do your founder references. talk to employees, partners, and previous investors. you can learn a lot about a founder from people who've actually worked with them, especially things you won't pick up during a pitch. 8. stay flexible. the market changes fast, and your thinking should too. keep watching what's happening, stay curious, and don't get too attached to your original assumptions. some of the biggest opportunities come from recognizing something that most investors haven't noticed yet. there's obviously a lot more to becoming a good investor, but i'd start with these.

the most important metric for any VC is obviously how cool their website looks so here are the top 10 VC websites: 1. paradigm.xyz (@paradigm) 2. slow.co (@slow) 3. blueyard.com (@blueyard) 4. airstreet.com (@airstreet) 5. 8vc.com (@8vc) 6. southparkcommons.com (@spc) 7. betaworks.com (@betaworks) 8. benchmark.com (@benchmark) 9. pillar.vc (@pillar_vc) 10. hummingbird.vc (@HummingbirdVC) honourable mention to @BeginVC, because it's our ranking and we're obviously the most objective judges in the world who did we miss?

the AI tools every founder and operator should have on their radar right now coding agents - amp (agent threads linked to git commits, useful as shared team context) - antigravity (another way to work with Claude and Gemini) - opencode (open source, multiple models, runs in your terminal) - claude code (subagents, skills, project memory, MCP) - codex (a second opinion from a different model family, great for code review) - cursor (multiple models in one editor) running agents across the company - QM (YC's open-source internal agent, lives in Slack) - multica (AI agents as teammates, with actual task management) - paperclip (a meta-harness for coordinating agents across different tools) - herdr (manage agents running across multiple machines from one place) - buzz (Jack Dorsey's workspace for people, agents, and code) agents that use your computer - claude cowork (desktop tasks and workflows) - dots (OpenAI's always-on agents inside ChatGPT) - muse (Meta's agent for computer tasks) - gemini spark (Google's background agent for Ultra subscribers) - grok bot (one of the more interesting interfaces in this category) tools for actual business workflows - fin / decagon / sierra (customer support) - ramp (finance and spend management with AI built in) - rogo / hebbia / alphasense (research and analysis) - reducto (document parsing, including messy real-world files) - clay (GTM research and enrichment) - granola (meeting notes that are actually useful afterward) - n8n (connecting tools and automating workflows) running AI on your own hardware - ollama + LM studio (running local models with more control over your data) - deepseek / qwen / kimi / GLM (open-weight models for high-volume workloads) - hermes (Nous Research's agent with persistent memory and local deployment options) - moshi (accessing agents from your phone) what am I missing?

most founders know they need to target the right VCs when fundraising but there's something else worth paying attention to: what kind of investor are you actually talking to? besides the obvious differences between private equity, hedge funds, VCs, and other investors, every VC has their own investment thesis, preferred stages, sectors, and geographies but even within venture, investors approach deals very differently I'd break them down into 7 types worth understanding: 1. lead investor. usually writes a larger check, negotiates the terms, and takes a meaningful ownership stake. often does extensive due diligence and may want a board seat or an active role in the company's development 2. follower investor. prefers joining rounds led by someone else. they still do their own evaluation, but often rely on the lead to set the terms and coordinate the round 3. angel investor. invests personal money, often in founders they know or industries they understand well. some are professional angels, while others invest alongside their main job or business 4. institutional VC. invests capital raised from LPs through a professionally managed fund. usually has a more structured investment process, with partner discussions, investment committees, and specific ownership or return targets 5. strategic investor. brings something beyond capital that can directly help your business grow, whether that's distribution, industry expertise, partnerships, or access to customers 6. family office. manages the wealth of one or more wealthy families. some have dedicated venture teams, others invest directly through family members or external advisers. their decision-making processes can vary a lot 7. syndicate. a group of investors pooling money to invest in a deal, usually through an SPV. in my experience, they can be easier to raise from, especially if you're looking for smaller checks and a faster process. but it really depends on who's running the syndicate one important thing: these categories overlap an institutional VC can lead or follow a round. a family office can invest strategically. an angel can organize a syndicate the point is to understand how each investor makes decisions, what they expect from a deal, and what role they can realistically play in your round that can make a huge difference in how you approach them and structure your fundraising

if you're integrating AI into an existing company, learn from the people actually doing it software - @sarahmsachs (head of AI at notion) - @fergal_reid (chief AI officer intercom, building fin) - @fnthawar (VP head of eng shopify, AI-first engineering) - @dharmesh (co-founder/CTO hubspot, publishes simple.ai) - @karrisaarinen (ceo linear, automation loops inside the product org) - @levie (ceo box, enterprise AI adoption) - @cramforce (CTO vercel) - @briansolis (head of global innovation servicenow) - @robdthomas (SVP ibm) fintech - @emilygsands (head of data & AI at stripe) - @rahulgs (CTO ramp, agentic systems in production) - @geoffintech (CPO ramp, wrote the company-wide AI adoption playbook) - @daschreiber (ceo lemonade, AI in insurance) data & defense - @ssankar (CTO palantir) - @2112Power (founder hadrian, automated factories for defense & space) mobility - @praveenTweets (SVP CTO uber, 70%+ of PRs now from agents) - @aelluswamy (leading AI at tesla) - @dmitri_dolgov (co-ceo waymo, physical AI at scale) - @qasar (ceo applied intuition) who else should i add?

one of the most valuable and easiest content formats for VCs to produce: when you're considering investing in a startup, you already spend a ton of time researching the market, talking to industry experts, understanding the competition, and figuring out where the real opportunities are by the end, you have a pretty solid understanding of the space. you know the biggest problems, how people are solving them, what's changing, and where the market might be heading then you make a decision: invest or pass and that's what makes the research especially interesting. you've done enough work to make an actual investment decision, so there's real conviction behind your conclusions so why not turn that research into content? basically, an anonymized investment memo without the numbers, focused on the market and product category rather than a specific startup. if you passed on the deal, you could also share more specific feedback privately with the founders, including the reasons behind your decision it's valuable for everyone: - founders, especially those just entering the space, get a much better understanding of the market - other investors can use it to get up to speed and know what questions to ask when a similar startup approaches them - agencies and service providers can better understand the industry's challenges and tailor their offerings to potential clients you're already doing the hard part. might as well turn it into something useful for others

the best fundraising strategy is to ask investors for advice tell them you've been working on something and have a hypothesis you'd love their thoughts on. they've seen hundreds of startups, so you want to know if you're thinking about the market the right way use the conversation to show how well you understand the problem, the market, and what you're building if you're onto something genuinely interesting, they'll probably ask if you're raising anyway. that's literally their job, finding great companies to invest in and if they're not interested, you still win. you'll hear their concerns, get a chance to address those concerns, and be better prepared when you talk to other VCs

facts that were true in 2020 > the average founder of a top 0.1% startup was 45 > 50-year-old founders were 2x more likely to succeed than 30-year-olds > founders in their early 20s had the lowest chances of a successful exit > even in tech, the average founder was around 40 > 3+ years of industry experience doubled your odds of building a top startup > founders who successfully exited were 46.7 on average facts that are true in 2026 > average AI unicorn founder age dropped from 40 in 2020 to 29 in 2024 > AI startups reach unicorn status in 4.7 years vs ~7 years historically > outside AI, unicorn founders are still getting older > health and biotech unicorn founders are older than those in other sectors > 40% of unicorn founders are repeat entrepreneurs > 25% of unicorn founders are immigrants

don't have ambitious people around you? build your circle online here are some of the best young builders on X to learn from and connect with - @gajesh (18, engineer eigenlabs, building darkbloomai) - @richardzphotoz (19, media & brand a16z) - @zach_yadegari (19, sold cal ai, building yourpersona) - @DeRonin_ (20, ceo arcane, angel investor) - @jia_seed (22, co-founder jam, ex-big tech) - @im_roy_lee (ceo cluely, raised $15m from a16z) - @sandylikesfrogs (Stanford, experiments with AI agents running businesses) - @0xSigil (Thiel Fellow, founder underdogai, backed by a16z) - @ansonyuu (hardware normalfactoryco, AI + manufacturing) - @mathurahravi (design engineer netflix, runs rabbitholeathon) - @AnnieLiao_2000 (founder solaris_ai, grew buildclub to 70k+) - @_rajanagarwal (AI research openai, ex-Amazon AGI) - @aditabrm (built r-1, reducto's document parsing model) - @schisofrenia (co-host MTSlive, AI interviews) - @hannahsgao (math/CS stanford, ex-openai) who else should i add?

if you're 15–19, these are some of the best programs you can apply to in 2026 1. Hack Club (free clubs + hackathons, ages 13–18) 2. Emergent Ventures (grants, ages 13+, rolling) 3. +EV ($1k–$50k grants, no equity) 4. Z Fellows (1 week, any age, optional $10k investment) 5. MIT THINK (up to $1k + MIT trip, deadline ~Jan 1) 6. Thiel Fellowship ($250k, no equity, must drop out) 7. RSI (free MIT/Stanford research, deadline Dec 11) 8. MIT PRIMES (free math research, deadline Nov 2) 9. Simons Summer Research (lab research, US juniors 16+) 10. MITES Summer (free 6 weeks at MIT, US juniors) 11. Beaver Works Summer Institute (4 weeks, AI + engineering) 12. Summer Science Program (5-week research, juniors only) 13. PROMYS (6-week math program, ages 14–18) 14. Canada/USA Mathcamp (5 weeks, ages 13–18) 15. Ross Mathematics Program (6-week math, ages 15–18) 16. SUMaC (Stanford math, grades 10–11) 17. Davidson Fellows ($25k–$100k scholarships, US) 18. Breakthrough Junior Challenge ($250k, video competition) 19. Neo Scholars (CS undergrads, optional $40k + residency) 20. Interact (2 fully funded retreats, ages 18+) 21. Dorm Room Fund ($40k investment for student founders) 22. MLH Fellowship (12 weeks remote + stipend, ages 18+)