This week at TechCrunch’s StrictlyVC event in Athens — part of Panathinaia festival taking place in the city — I sat down with Verdict Capital’s Nikos Bonatsos, Threshold Ventures’ Andreas Stavropoulos, and Atomico’s Ben Blume to ask about the current state of venture investing, the wave of mega-IPOs SpaceX is about to launch, and where they still see an ocean of opportunity. Our discussion, which follows, has been edited for length and clarity. You can see the full discussion at the bottom of the page.
With SpaceX eyeing a $1.75 trillion IPO valuation and OpenAI and Anthropic potentially not far behind, what will be the implications for the broader market?
Andreas Stavropoulos: I remember how exciting Google’s IPO was and how it led to a re-opening of a market that was very pessimistic about technology in the early 2000s — how it was a favorable event that brought in a whole new generation of entrepreneurs. The same is happening now. With each subsequent wave of paradigm shifts, the scale changes by orders of magnitude, and this is to be expected. What business today in the information age is not a technology business?
Ben Bloom: These are amazing companies, and with each of these scale liquidity events, they create wealth and returns that flow back to the next generation of companies.
Nikos Bonatsos: My co-founder at Verdict was the first investor in what is now known as Cursor. So if Elon feels he is [having] a good time, maybe the Runner [which Musk revealed recently that he has the option to acquire for $60 billion] he will also have good news. But in general, for the next generation of companies, as Andreas mentioned, they could look for much bigger markets, and immigrant founders, as we know, are the ones who dream really big, have nothing to lose and can go far, and Elon Musk is an immigrant founder himself. So for those of us from Greece or other smaller markets, wow, you know, that’s a great example.
Some have suggested that SpaceX at that valuation could soak up so much public market capital that it hurts the companies that exit in its wake. Is this a real concern?
Stavropoulos: You can choose to see most things as optimistic or pessimistic and make very good arguments for both. Something like a SpaceX, macro-wise, will end up bringing more people into the market than the short-term impact of soaking up some liquidity. Consumer participation in shopping over the past 30 years has gone from not really being a thing to something that people exchange with their phones every day. These numbers add up.
Bloom: SpaceX is such a unique company. For a long time, the site was owned by the government and the public sector. To give investors real financial access to it — I think it will capture a widespread imagination. It may intellectually draw on long allocations that might otherwise have gone to the next 20 or 30 software companies, but I think the interest it generates more than makes up for it.
Is the current flood of capital into AI justified by future gains, or is this a case of extreme FOMO?
Bonatsos: If you’re a native AI founder or company in the American dynamism space right now, you can live life in the fast lane. If you’re not in one of those two buckets, it’s really hard. In 17 years in Silicon Valley, I have never seen more groupthink. Three-quarters of all venture capital raised last year went to five companies. Today, if you’re a 40-year-old professor at Stanford and you’re not building something in AI, no one wants to know you.
That said, something real is changing. Two founders with today’s AI tools can make more progress in two months with one funding round than they could a year ago with ten people, two rounds and a full year of work. This is changing how companies start and how they will capitalize themselves — potentially going straight from pre-seed to Series B.
Stavropoulos: There will be a correction that will push some capital back out of the market. Promise and optimism are still important ahead of the short- to medium-term ability to show results. But on a long-term, macro scale, I don’t think we’re overly optimistic. The problem is that we shouldn’t be fooled into thinking that every 19-year-old with an idea is the next big thing.
How do you actually price deals when things move so fast?
Bloom: The best founders have no shortage of capital options. You need to think about what a significant ownership stake is for your fund and walk away when you can’t get there. The interesting dynamic is that we are a 500 million dollars Fund looking at the same opportunities as people investing from a $10 or $15 billion fund. The incremental value of a dollar for us versus them is very different. This distorts the round sizes and makes it difficult to stack like-for-like offers.
Bonatsos: We do seed money investments — basically instead of friends and family, instead of angels. We invest in what I would call “freaks” – people where, like in professional sports, a few people break all the records. A day goes by and they learn, mature, and make the progress that the average smart founder needs an entire week. Most of the founders we’ve backed so far work in markets that don’t yet have a name — which is exactly why valuations are low. Bigger asset managers can’t tell their teams to find companies in a market that doesn’t exist yet.
There is a lot of talk about very young founders getting tenure sheets almost on arrival. Is age really a proxy for anything meaningful right now?
Stavropoulos: In times of upheaval, when the world seems to be changing in some fundamental way, it is especially conducive to inexperience. Experience can really lead you astray. That doesn’t mean it’s changed forever — we’re going through a phase where things aren’t settled yet, and that creates fertile ground for new ideas, and usually younger entrepreneurs. But I don’t want to overgeneralize.
Bonatsos: It was exactly the same when I arrived as a graduate student at Stanford in 2009. The iPhone was two years old, the App Store was one year old, and there were days when there were more VCs on campus than students. Today is again one of those unique moments. If you’re 22 in San Francisco and building something with artificial intelligence, there might be a term sheet in your inbox — but if you’re 19, my God, that means you’re really good [laughs]; you may already have an A Series [offer]. And look, age is all relative at this point — I was talking to a founder here in Athens this week who’s 24, and when I said he wasn’t that young, I meant it: I met the Mercor guys when they were 19, and look where they are now.
Bloom: If you’re trying to generalize from age alone, I think you’re missing what you’re really looking for: an extremely high level of intensity, the ability to move ahead of the pace the market moves, and the mental dexterity to adapt to an ever-changing landscape. If you have these things, it is more important than the age on the passport.
What do you think about the shady behavior going on around metrics — particularly how companies report ARR [annualized recurring revenue]?
Bloom: People are relatively liberal in how they define A and R and R. New pricing models — token-based pricing, free tokens counted as revenue — create many ways to express these numbers. Our job as investors is to narrow it down and make decisions based on the real truths. Is it good from a marketing point of view? Probably. Is it good to decide which companies to raise capital? No. But sophisticated investors can generally cut it short.
Bonatsos: Sometimes I’ll get an email with a really high ARR number from a holding company that I didn’t remember doing well, so I’ll contact the founder. The answer? It was 365 times what they made the day before because they hit a campaign. I said to him, can you use it on a quarterly basis at least? Whenever a lot of money chases specific issues, some people develop an unpleasant mindset for short-term gain.
In the venture you can only lose your money once on a bad investment, but the right one can return 100 times — so you delete the bad actors and move on.
For the aspiring founders in the audience, where do you really see the white space right now?
Bonatsos: Every VC firm used to have at least half of its partners investing in the consumer internet. Today, maybe they have half a person — they’re completely off the field. But one of the best AI companies of recent years, OpenAI, became massive because of ChatGPT. The consumer is coming back, which is almost an insane statement. These founders today have maybe five investors they can pitch for their first or second round. I think there is also a new movement emerging to help restore the American dream through new consumer fintech ideas.
Bloom: The opportunity of AI interacting with the physical world is orders of magnitude greater than what we’ve seen so far in workflow automation and digital process. The natural world still shapes a large part of the economy. Betting on robotics in all its forms—not just the humanoid doing a backflip—is still one of the biggest open spaces in the next 10 years.
If you’re interested in learning more about what the three think — including whether Stanford University has gotten too cozy with the venture capital industry — you can watch the full discussion below:
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
