1/ New Lux LP letter...

Venture Capital Musical Chairs (And Why Founders Should Care) When I first got into venture capital, I assumed that General Partners stayed at firms for most of their careers. From the outside, venture capital shops looked like stable institutions. At the very least, they felt more permanent than the startups they backed. That assumption was dead wrong. Back then, I was at Tinder and a scout for Index Ventures. It was an awesome experience, but I definitely underestimated how turbulent things can be inside other venture firms I was co-investing with and getting to know more closely. That turbulence has only accelerated in the last few years. Every week, I see partners leaving, firms reshaping their strategies, and LP relationships shifting. It feels like watching ESPN at this point waiting for Shams to break some trade news. Luckily we have @jordihays & @johncoogan at @tbpn. For founders, venture capital musical chairs feels like something happening on the other side of the table. You sense the industry shifting, but you’re busy building your company. Whatever chaos is unfolding inside venture firms isn’t exactly top of mind. But you should be thinking about it a lot more. And here's why. When you raise from a venture firm, you don’t really raise from the firm. You raise from a specific partner. You take their calls, you trust their judgment, and you build your relationship around them. They’re the one who sits on your board, texts you late at night, and ideally, fights for you when things get tough. When they leave, you lose that advocate. Suddenly, the person who cared most about your survival inside the partnership is gone. In today’s venture world, that partner may not even be around by the time your next fundraise rolls around. I was talking to a former partner at a multi-stage fund yesterday, and she told me that the average partner at a venture firm sticks around for 7 years. And when they leave, the implications for you are important to understand. What often happens next is that you become an “adopted company.” Other partners don’t rush to claim you, because supporting you doesn’t count toward their scoreboard. Venture is a business built on attribution, and if they didn’t source or lead your deal, the incentive to spend time helping you is low. Board dynamics only make the problem worse. If your original partner leaves, their seat might be reassigned to someone who barely knows your business, or worse, someone who doesn’t care to. Now you’re wasting cycles re-educating a new person who has little emotional or financial attachment to your success. Instead of focusing on building, you’re back at square one, explaining the basics to someone who isn’t invested in your story. And then there’s the signaling risk. Other investors notice when your champion departs their firm. LPs notice too. Even if your company is performing well, your life will change. “Is the firm still supporting you?” You’ll get asked this question dozens of times by other investors, potential hires, and media. You can explain this pretty easily, but it’s just one of those annoying questions that you’ll have to talk about for many years to come. This isn’t meant to be morbid. It’s a reminder to choose your partners carefully and understand their career trajectory and standing inside the firm. Fundraising is chaotic right now. Bubble or not, founders and investors are speed-dating their way into big rounds, and everyone’s expected to build trust on a timeline that would be insane in any normal business relationship. My best advice is don’t assume the partner you pick will be there forever. Get to know the rest of the partnership, understand how they think, and make sure you actually believe in the firm’s culture and ethos. A friend put it well yesterday: the only person who’s almost certainly sticking around is the founder of the firm. That’s the longest term partner you're getting into business with. You may not get much access to the founder(s) of a firm, but it’s still worth knowing their story, their reputation, and how they’ve shown up for founders over time. Venture Capital Musical Chairs isn’t stopping anytime soon. If anything, it will get much spicier as we understand which partners took massive AI swings that will generate many billions for their firms, or leave their firms holding the bag. In either case, your partner still might leave. Investors who crushed this AI wave might use that momentum to spin out and start their own firms. And the ones who didn’t get big wins in this cycle might be looking for new jobs soon for reasons we all understand. As a founder, choose your partners carefully and make damn sure you’re not the last one left standing when the music stops. Fin.

Nobody in bulge bracket venture wants to price things. They just wanna justify paying 3-5x more than the last round. Founders, remember that when setting valuations. Make it easy to put up the evidence to justify a 3x+ step up.