Money Prints Money

After my gaming company, I spent some years doing fund of funds investing. Over that time I talked to more than 160 VC partners across the US and Asia as an LP. Since the recent wave of AI and agents took off, and since some of Ventify’s target users are VCs, I’ve been thinking about them again.

At Ventify we did some research on a few VCs recently. The finding was that their recent performance is not great. But money prints money. A manager can be slow to understand the new agent thinking and the fund’s numbers can look poor, but it still makes money. When a fund sits on billions of dollars, the flow of that money itself earns returns, unless someone does a truly terrible job.

A friend asked me a harder question. If VCs keep making money anyway, what will they actually invest in? The old narrative was that people get paid for generating value through their work, whether that was labor work or mental work. Now the paradigm is shifting. Mental work is turning into electricity, which turns into tokens, which turn into agents. The thing that produces value is no longer a person sitting at a desk (this is gradual of course, it will play out across the next few vintage years). So what does a VC deck even look like now?

My take is that VCs will still be there. Money is money, and money prints money. The structure doesn’t disappear just because the underlying production function changes. What changes is who figures out the new pattern first.

I think the first movers will not be career VCs. They will be the quick runners, experienced tech leaders who recently became VCs and still have their hands in the new tools every day. Those people will find the first patterns of how to invest in this new world. Once they show some results, other VCs will copy the pattern. That is how this industry has always worked.

So VCs are not going anywhere. Just the order of who leads and who follows might shuffle a bit. The thing is, some VCs might not have their next fund.