Has AI killed the entire VC ecosystem?

Hey RB2Bers!

Last week the founder of Clearbit (acquired by Hubspot for $150M cash) told me, “VC, as we know it, is dead.” What makes this so nuts?

He runs a big VC fund!

Here's why he says the model is broken:

1. What VC money used to be deployed at doesn’t work anymore

- Large GTM teams are losing ground to more effective, leaner motions
- “Growth at all costs” has given way to “be capital efficient”
- The math doesn’t work at 20x revenue

2. The VC playbook erodes great brands by forcing them to overcharge

- Product-market fit generally happens at a compelling price-to-value ratio
- VC/PE funding forces GTM motions that require wildly increased prices
- Brand slowly erodes as investors hope and pray for their exit
- Or as he said, “Every year we were forced to look at accounts paying $40k and try to figure out how to charge them $500k”

3. Small teams can be AI-native and get lots done in a very short time

- It’s easier to start companies than ever
- You can sell, support, and serve people without humans

4. Influencer-led distribution is 100x capital efficiency gain (if done right)

- Believe me, this is true, I am living it

5. We’re heading towards a world where everything will be free

- Mark my words, you will start to see more companies w/ the RB2B playbook
- I think every space gets smashed by HUGE freemium plays and AI-driven PLG

6. If portcos were free to operate as they wanted, they wouldn’t need more $$

- Portcos can get way more done with fewer resources than 3 years ago
- They could (and would) operate profitably if they were allowed to

TAKEAWAY:

You have to ask yourself:

If companies were free to operate how they wanted to…

And that way of operating WOULDN'T require venture capital…

What the hell does that mean for the future of the Venture Capital market?

Amit Vasudev thinks it means the whole thing could (and probably should) just evaporate.

GUESS WHAT …

Amit is coming on Inbound-Led Outbound LIVE this Tuesday at 3pm ET. 

Santosh is hosting.

Sign up here.

Paternity Leave

I’m having a second child on Monday and will be out until October 11.

While I’m out, we’re going to cross several very important Milestones.

• 100,000 followers on LinkedIn (at 98k now)

• $3m ARR for RB2B in under 7mo (at $2.96m now)

• $2m MRR for our combined company (at $1.993m now)

The $2m MRR is a MAJOR one on my personal entrepreneurial journey.

Seven years ago, when I had been stuck at $250k MRR for over 3 years, I wrote in my journal about a dream to cross $2m MRR by my 42nd birthday - which was 5 years later.

In my head, $2m MRR represented the ultimate level of success.

If I could get there, I would have no other problems in my life.

What happened?

The startup I was working on at the time failed completely, but I held onto the dream.

And I didn’t quite hit it by my 42nd birthday, but I turn 44 on November 10 of this year.

We’re definitely going to hit $2m MRR by then.

I’ll take it.

Here’s a video the whole experience.

What’s the moral of the story?

Hold onto whatever your dream outcome is, even if you have no idea how you’re going to get there.

At the end of the day, it just gives you more fuel …

To keep building.

Have a great few weeks!

Adam