Episode #99: The Death of VC’s Short Kings, Seed Valuations Need a Correction
This week Mia and Charles dig into Kyle Harrison’s “The Death of Venture Capital’s Short Kings,” on Benchmark and USV, the two firms that built their identities on staying small, both raising their largest funds ever this year. Then Nnamdi Iregbulem’s “Valuations Need a Correction” argues that seed valuations are financing prices for the few companies that successfully raise, not a read on what the average startup is worth. Once you correct for that, seed market value is climbing while the number of active seed startups shrinks, a concentration story that looks a lot like the Mag 7 and the S&P 500. Two pieces, one thread: more capital and higher marks are telling a much narrower story than the headlines suggest.
Key Points
- Venture is splitting into firms that need enough scale to lead rounds and shape outcomes, and firms that are content to participate with smaller, more flexible checks.
- Private market valuations may be masking a weaker underlying seed ecosystem, where rising prices are concentrated in fewer companies even as the broader population shrinks.
- The industry still lacks a clear framework for companies that are too small for traditional venture but not suited to private equity, and that gap may create a new investing model altogether.
[The Death of Venture Capital's Short Kings](https://x.com/kwharrison13/status/2108931049506083092)
[Valuations Need a Correction](https://whoisnnamdi.substack.com/p/valuations-need-a-correction)
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Transcript
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