Lior Grossman

Figma just acquired AI startup Weavy for ~$200M. AI workflows are changing how creative work scales. Here’s why founders should pay attention 👇 Weavy is a Tel Aviv–based AI image & video generation startup. This is Figma’s most important strategic move since Adobe’s attempt to buy Figma was blocked. We’ve entered the AI design consolidation era, where major platforms are becoming AI-first for design and workflow automation: → Canva acquired Affinity (to expand into pro design) → Adobe acquired Rephrase.ai (AI video generation) → Freepik acquired Magnific (AI image upscaling) Because here’s the competitive reality: • Adobe controls the production suite • Canva controls lightweight brand creation • Framer controls design-to-web automation Companies now need to own workflows end-to-end to dominate the market. That means controlling: creation + automation + distribution Because in software, public markets reward leverage. It’s no longer about who has the best design tools but who automates the canvas itself. --- Our team at FE International is more bullish than ever on the rise of AI-first businesses. If you're a founder curious about your company’s true value, get a free valuation. (Link in comments) 👇

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SaaS monetizes features. Rails monetize mistakes. The main objection to Rails: "Isn't this just network effects?" No. Rails don't create network effects. They create learning effects. Every time work flows through the rail, it doesn't only deliver an outcome, it makes the rail smarter. SaaS scaled revenue. Consulting scaled judgment. Rails scale error correction. While LegacyCos bolt AI agents onto existing workflows, NewCos build differently. They know you can't buy five years of resolved edge cases. That compound learning becomes the moat. Learning Effects > Network Effects Classic SaaS defensibility came from network effects. Slack gains utility with more teammates. But SaaS compounding is bounded. Each instance learns locally. Operating Rails compound differently. Every GitHub Copilot rejection, every Stripe fraud flag, every CrowdStrike attack blocked makes the entire network smarter. Expensify example: When you correct a miscategorized expense, it only improves your workspace, despite 15 million users generating errors daily. Imagine Expensify as a Rail: every correction across thousands of companies teaching the entire network. Your operating costs benchmarked against similar companies. Edge cases from one company preventing errors at another. This isn't about user count. It's about work count. Every pattern resolved becomes reusable logic with provenance. Rails monetize mistakes across the network. SaaS monetizes features in isolation. The Three Laws of Operating Rails Law 1: Learn faster than they copy  Your rail must improve faster than competitors can imitate. A competitor can copy features in weeks. They can't compress five years of edge cases resolved, versioned, and rolled back. The moat isn't what you built; it's how fast you compound. Law 2: Make it tacit, not portable  Perfect documentation is easily copyable. The real moat lives in tacit knowledge, patterns that only work with your specific context, governance, and audit trails. Law 3: Power without transparency kills trust  As rails automate more decisions, they need more governance. One bad auto-execution can destroy years of trust. Constitutions, vetoes, one-click rollbacks aren't nice-to-haves. They're essential. NewCo Playbook: Start Boring, Compound Fast (Exclusive to newsletter subscribers) The winners won't be the ones who automate fastest. They'll be the ones who learn from failure fastest. LegacyCos are adding AI agents to workflows, hoping for magic. But intelligence in local instances doesn't compound. You don't build moats by making each silo smarter. NewCos who grasp Operating Rail laws will target boring shared burdens. They'll turn every error into network intelligence. They'll shoulder bounded liability to earn trust. And they'll compound learning at rates LegacyCo can't match. Strong operators compound errors into moats. Weak operators add features and hope. (Full version sent to subscribers)

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We helped a seller close a deal at 50% above their initial expectations. Here's how 👇 A UX design platform reached out to us for acquisition advice. They served a highly lucrative industry of web developers and designers with interfaces, resources, and tools, with high buyer interest..... .....yet most offers were lower than what the business was truly worth. So we stepped in to help: 1️⃣ Early prep We started planning 12–24 months ahead of a sale, before there was any pressure to transact. That meant: - Stress-testing the numbers the way a buyer would - Cleaning up revenue concentration and customer narratives - Tightening the story around why this business wins in its niche This was crucial for removing reasons for buyers to discount the deal. 2️⃣ Expert negotiation Strong interest doesn’t automatically lead to strong outcomes. We: > Ran a structured, time-bound process instead of chasing inbound offers > Managed legal, financial, and strategic questions in parallel > Pushed on terms over headline price This generated multiple strategic offers. 3️⃣ Strategic fit > highest initial bid The best outcome didn’t come from the loudest bidder, but the best strategic fit. We introduced a PE-backed digital services and marketing platform because it was the right strategic fit. Getting the fit right required understanding the UX product’s strategic role and seeing expansion opportunities others missed. The final offer landed nearly 50% above the founders’ initial expectations. A win-win for the founders and for the buyer. When an eventual exit is on your radar, the biggest factor is rarely “finding a buyer.” It’s clarity on value, timing, and process well before a deal is on the table. For expert guidance, you can DM me or connect with our team here: https://lnkd.in/eDmdFvAw

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TechCrunch claimed YC founders want "less oxygen (VC)." Reality check: ↳ $250M+ deployed on Demo Day ↳ Average YC company still raising $2-3M ↳ Oversubscribed rounds everywhere One contrarian founder doesn't make a trend. Parker Conrad is right: "A competitor will raise a ton of financing, invest more deeply in R&D, build a better product, and absolutely crush this guy." The data tells the truth: ↳ Anysphere: $100M ARR, 20 people → raising at $10B ↳ ElevenLabs: $100M ARR, 50 people → raised $180M ↳ Both quadrupling headcount post-funding. AI startups need massive capital to: 1.. Secure compute allocation 2.. Build moats against copycats 3.. Outpace Big Tech acqui-hires The real "vibe shift" isn't founders taking less money. Its founders are getting more selective about WHERE that money comes from. After 80+ YC investments, I can tell you… The best founders aren't anti-VC. They're anti-bad-VC. And they're still raising as much as they can.

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Cursor hit $500M ARR. Lovable went from $17M to $75M in five months. On paper, AI coding tools look unstoppable. Then you check the traffic data. Lovable is down 40%. Vercel's v0 dropped 64% since May. Bolt.new fell 27% since June. When revenue climbs while usage falls, that's not growth. That's a warning sign. Three forces are working against generic AI coding tools: → Developer sentiment is cooling. Stack Overflow shows usage up from 70% to 76%, but favorability dropped from 77% to 72%. People are using the tools more and liking them less. → Enterprises are hitting compliance walls. FINRA, GDPR, HIPAA. Many tools weren't built for enterprise procurement. → Switching costs are too low. When every tool feels the same, users bounce. There's no moat in being "pretty good at everything." Meanwhile, vertical AI is scaling fast. The market sits at $12.9B in 2024, projected to hit $115.4B by 2034. Big tech is buying specialized applications, not building generic copilots. ServiceNow paid $2.85B for Moveworks. M&A hit 177 deals in Q2 2025, nearly double the quarterly average. We're in Wave 2.0. Infrastructure is maturing. Value creation is moving to the application layer. CB Insights tracked 1,500+ tech markets. The most AI deals in Q2 went to companies solving specific industry problems. LLM developers tied for ninth place. The tools that win won't be the loudest. They'll be the ones that become essential. Full piece in Forbes (link in comments)

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Two trends in fundraising that I’m seeing on a daily basis: 1/ The "we'll monetize later" era for infrastructure startups is dead "We'll figure out revenue once we have users" / "we're focused on adoption first"/ "monetization comes later" This worked in 2021. It doesn't work now. Today’s market won’t reward research organizations or companies that believe in perfection over getting it in users' hands. If you don't have a clear path to revenue… you won't get funded. period. VCs aren't writing checks hoping you'll figure it out later. 2/ "Vibe ARR" is everywhere Remember Jasper? hyper growth, but the model companies ate them alive. We're seeing this again. Companies growing really quickly on point-in-time technology that isn't defensible These companies look amazing on paper. Growth charts going up and to the right. But if you think models are getting better and becoming platform companies, many solutions become obsolete. 

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Honestly, I have had enough of placid BS podcast episodes where people sit on the fence. “The 2:20 fee and carry model of venture is broken”. “VCs are spreadsheet monkeys”. “It is likely Putin will want more and to expand”. We cannot trust US tech, we need European sovereignty more than ever. My word, this does not lack opinion. Top 7 lessons from Taavet Hinrikus 👇 1. Why We Prefer Serial Entrepreneurs - They usually go for a bigger goal the second time around. - Torsten Reil built a gaming company before Helsing.  - Daniel Ek built an e-commerce company before Spotify. - Even if the likelihood of success is the same the outcome is so much bigger. 2. Why the Fee Structure of Venture Is Broken and VCs Should Not Get Rich From Deploying Capital  - The idea of collecting a 2-2.5% management fee does not align us with the outcomes. - We charge half of that at Plural & it enables us to make a few more investments. - You don’t want to hire people who are here for the biggest salaries. 3. The Fund That Makes Every Partner Invest Their Own Money With Every Check  - Every deal we do, the lead partner writes a personal check. - The size of it depends on the individual’s position. - We don’t like the idea of “playing with the house money”. 4. How This $500M Fund Makes Decisions - Every investor can only do a limited amount of deals a year, they have to commit their personal money & write a memo about the deal. - The memo has to include: - Why is it important to them? - Why is it important to the founder? - How can it be 100x from here? - Every deal we do, the partner has to be excited enough to be a co-founder of the company. 5. If It Is Not 100X We Do Not Want to Do the Deal - There are many great investments that are guaranteed to 5x. - They are not for Plural. - If we cannot imagine a 100x outcome we do not do the deal. 6. Change the GDP of Europe or No More Money for You - We tell our founders we’re here to have GDP levels of impact. - If your company is not doing it, we should not continue to fund it. - You can keep working on it, we’ll do our best to help you but it does not guarantee the next checks. 7. Why Europe Needs to Build Its Own Tech Now More Than Ever - Two things have happened: - The Russia/Ukraine war - Zelensky’s grilling at the White House - The US cannot be trusted to be the protector of Europe anymore.  - We need our own defence, space, & energy sector. Watch the full episode now by searching ‘20VC with Taarvet Hinrikus’ on YouTube, or click the links in the comments. #Founder #funding #business #investing #VC #entrepreneur #startup #investment #20VC

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The Headline family is experiencing incredible momentum, and today our portfolio company DeepIP is announcing a $25M Series B, bringing total funding to $40M.  This is the kind of company that doesn’t just add AI to a workflow, but it sets the standard for an entire category. The momentum speaks for itself: 1️⃣ 10x ARR growth in < 18 months 2️⃣ Trusted by 400+ law firms and leading corporate IP teams globally 3️⃣ 2M+ chats on the DeepIP platform We’ve had the chance to back FX (Francois-Xavier) L. and Edouard D., leading their Seed round with Headline. Watching them take on a problem as complex and high-stakes as patent work has been genuinely impressive. And working with them has been an absolute pleasure: these 2 are coupling very high ambition and humility. Tech built in Europe, but opening the US office very early and FX starting a life in NYC with his family with 0 hesitation in order to build a global category leader in the IP industry. What convinced me early is still what stands out today: patent teams don’t need another standalone AI tool. They need something that fits the way the work actually happens: documents, long-running matters, multiple stakeholders, and zero room for sloppy context handoffs. Big congrats to the whole DeepIP team + Korelya Capital, Balderton & Serena Proud that we’re doubling down at Headline and continuing the support for what’s next!

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Founders often scramble to prep materials *after* a VC shows interest. That’s backward. You should be ready for diligence before your first meeting with a VC. Smart founders: 🗂 Have their data room ready 📊 Can share a clear KPI dashboard if asked 💸 Keep clean, up-to-date financials 📣 Track and communicate metrics Flailing around getting your files in order can erode investor trust. Put in the work ahead of time and it will build confidence in you and your company. #FundraisingAdvice #StartupTips #RSCMFounderFriday

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Founders, your Ideal Investor Profile (IIP) is as important as your Ideal Customer Profile (ICP). While many founders are using ICP frameworks to find product market fit, I find almost no startups are using a similar framework for fundraising. Which investors are most likely to: - Convert? - Send $ on the timeline you need it? - Be a good long-term partner? I see early stage startups meeting with VCs who either do not have a mandate to invest in their geography or else are unlikely to convert soon (most common). I see founders meeting with investors who do not invest in their industry. If you are fundraising you are selling. Your product is your equity and your customer is the investor. Treat the process almost the same as you would when selling your startup's product/service. Design your IIP, go to market, get feedback, iterate, repeat.

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Samsara, ServiceTitan, and Procore Technologies have a combined valuation of $40B+ —and founders with wildly different industry experience. Yet VCs still debate whether it's needed to build great vertical software. As always, my stance is: It depends. The better question is: What type of founder are you, and what's your path to understanding your customers deeply? Some investors are adamant that you must have deep industry experience to build successful vertical software. Others claim outsiders have the advantage. Both camps love to cherry-pick examples that prove their point. But I've been advising and investing in vertical software companies for over two decades, and I think that's enough exposure to confidently conclude that founders of all backgrounds can be successful. Take these 3 examples (Samsara, ServiceTitan, Procore). They're some of the most successful vertical SaaS companies today. Some of the founders come from deep industry experience, but others have a background that would surprise you. → Procore's founders came from construction backgrounds and built a $10B+ company selling to their former industry. They'd lived the pain points they were solving for. → On the opposite end of the spectrum, Samsara's founders had zero experience in trucking or heavy industries. These MIT grads had just sold Meraki to Cisco for a billion dollars and were looking for their next challenge. They picked fleet management and transportation—two industries they knew nothing about. Today, Samsara is worth more than $20B. → Then there's Service Titan, which charted a middle path. The Stanford-educated founders didn't work in the trades themselves, but they grew up watching their parents run HVAC and painting businesses in Southern California. They bonded over their shared background and built a $10B+ company serving those same trades. So it's unreasonable to say that a founder's experience is the determining variable of success. Instead, what all 3 of these stories have in common is founders who deeply understood customer problems and built exceptional products to solve them. Industry outsiders often bring fresh perspectives and aren't constrained by "how things have always been done." Industry insiders have instant credibility and know which problems matter most. Those with adjacent experience can bridge both worlds. As an investor, I back founders regardless of their industry background. What matters most to me is their ability to build, learn rapidly, and maintain fanatical customer obsession. Where do you stand on the industry experience debate? I'd love to hear your thoughts.

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𝗧𝗵𝗶𝘀 𝗶𝘀 𝘄𝗵𝘆 𝗜 𝗮𝘃𝗼𝗶𝗱 𝗯𝗶𝗴 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝗻𝘁𝗶𝗿𝗲𝗹𝘆. I spent 15 years growing SaaS companies like those you see here. Now, avoiding these markets is a first principle of my game selection. Everyone wants to be a unicorn until they realize what competing at this level actually requires. With huge TAM, VCs flood in with unlimited capital and 7-year runways. This firms will outspend you, underprice you, and raise another round when you need profitability. When you're an operator bootstrapping your way, you've already lost that game. I'd like to think I'm a good operator. But I know I'm not perfect. And with a 2-year-old, mortgage, and student loans, I can't afford to need everything to go perfectly. So I stopped playing where VCs play and focused on markets they'll never touch. Because the truth is, you can still build serious wealth at 3-5x multiples (and provide AWESOME outcomes for sellers / founders). Markets without strategic buyers and jumbo TAM trade at 3x because there's no premium inflating things. That's not a discount. That's reality. Most operators make this mistake: they choose operator-friendly markets but expect VC-level multiples. Or they choose VC-backed markets but want operator-level risk. You can't mix games. VCs need Rule of 40 (growth + margin) to justify strategic exits. I use Rule of 5 (valuation ÷ revenue) because I avoid markets where those exits exist. Different multiples. Different competition. Different game. The multiple you can afford determines the markets you can win. I'm building more wealth at 5x in markets without competition than I ever did working for companies at bigger multiples. And I sleep better at night. // I share more on how I find and operate these markets on my Substack - market selection frameworks, valuation strategies, the full Rule of 5 playbook >> https://t2m.io/4aDyNCpu For the love of the game 🏴‍☠️ ⚡️ 𝘐𝘮𝘢𝘨𝘦 𝘊𝘳𝘦𝘥𝘪𝘵: 𝘗𝘢𝘭𝘭𝘦 𝘉𝘳𝘰𝘦 𝘢𝘯𝘥 𝘉𝘦𝘯 𝘓𝘢𝘯𝘨

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At Vibe Capital, we believe the venture landscape is bifurcating. The reason is simple: reality is full of drunk cats. "Drunk Cats" are the emergent, second-order effects that arise from simple rules. They can tank a product, entire system, or an entire country. The ability to see -and master - these drunk cats reveals the true split in startups today. It is no longer between software and hardware, but between "impressionistic" founders who map the world as it is, and "mechanistic" founders who can reverse-engineer reality from first principles. My latest Dave's Quick Hits newsletter provides the playbook for identifying and funding these mechanistic architects. It is about a fundamental shift from describing effects to mastering cause. I break down the three core stages of the Mechanistic Playbook: 1. See the System: Identifying the hidden rules and emergent flaws in any complex system, from software to biology. 2. Debug the System: Using technology to patch the legacy "bugs" of a previous industrial paradigm. 3. Architect a New System: Building with true primitives, like DNA, to program matter itself. The next trillion-dollar companies won't be built by operators chasing surface-level trends. They'll be built by system-thinkers who can see, debug, and architect reality’s source code. You can read the full analysis and the investment theses here: https://lnkd.in/dkhkBUwh #VentureCapital #DeepTech #FrontierTech #Investing #Strategy #Biotechnology #Nanotechnology #vibecap #vibecapital #drunkcats

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This 56 year old did what all Femtech Founders aim for. She reached the glorified $1B valuation. With its latest $100M raise, Midi Health, created by Joanna Strober, proved the world FemTech can do it. But what's the blueprint? For Midi: 1. The "Insurance Moat" (Unlocking the 99%) ⤷ ❌ Most Femtech companies are B2C subscriptions or "Employer-Only" (begging HR departments for contracts). ⤷ ✅ What Midi did right: They did the hard work of getting credentialed with major insurance payers in all 50 states before scaling. ⤷ 💎 In numbers: They are accessible to 45M women via insurance. VCs aren't funding a "clinic"; they are funding a national utility. 2. They Built "Software Margins" on a Service Business ⤷ ❌ Telehealth is usually "people-heavy." To grow 2x, you need to hire 2x more doctors, which kills your profit margins. ⤷ ✅ What Midi did right: This is where the AI Engine comes in. They use AI to automate 30-50% of the administrative burden (charting, triage, intake). ⤷ 💎 In numbers: A Midi clinician can see far more patients per day without burnout. Investors saw a path to profitability, not just growth. They serve 20,000 per week. 3. Pivot from "Point Solution" to "Lifelong Platform" ⤷ ❌ Perimenopause/Menopause is a 1-10 year transition. Once symptoms stop, the customer churns. ⤷ ✅ What Midi did right: They re-branded as "Midlife Health" (ages 35-65+). ⤷ 💎 In numbers: By adding services for weight loss (GLP-1s), heart health, and bone density (The "AgeWell" program), they extended the Customer Lifetime Value (LTV) from 3 years to 20+ years. It's not 'just' a cure; it's a very long-term relationship. You must be thinking: so what should I do? I've been there. Building Wild.AI for women. Having a very hard time raising, in rooms full of people who believe our market was niche. But we also didn't nail the revenue model. Late, very late, we started looking into that. We had a gold mine of data. But not much revenue. When we opened our B2B API, serving our model to wearables, it's when we realised that path was the right one. Also the one which led us to be acquired. For those earlier in the journey: what's the right way? Well, a very - very - good one, is to analyse others. Because in business, "copying" successful business models is not wrong. There's even a word for it: "pre-validated". Don't make your work even harder. Analyse the business who do well, and see how it can apply to you. I've done some of that work for you. I'll be digging more into the businesses I find interesting. Sign up to my newsletter if you want to get all the backdoor insights! https://lnkd.in/dy3wzu9A -- Save for later to get back to this post. Follow me, Helene Guillaume Pabis, an exited founder helping female founders build wealth-generating businesses.

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Dear Founders, Early-stage investing is nothing like stock market investing. And when Angels or pre-seed VCs invest, they’re not thinking like growth-stage investors. You’re too early for that. You’re pre-product. Pre-revenue. Sometimes even pre-team. So what are they really betting on? Not your idea (there are thousands of those). Not your business (there isn’t one yet!). They’re betting on: 1) You. The kind of person who gets things done even when it’s hard. 2) Your market. Whether this is a wave worth catching. 3) Your timing. Whether now is the moment to catch it. Yes, traction matters. Any shred of data that derisks your story helps. The more you have, the better. But no amount of traction will overcome the above 1, 2, and 3. Early investors don’t just invest in companies. They invest in people they want to see win, and in macro trends too big to ignore. If you want to raise early… Don’t just polish your deck. Show them you’re the person who will find a way, no matter what. Yours truly, David

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