Alexander Jarvis’ Post

𝗚𝗲𝗻𝗲𝗿𝗮𝘁𝗶𝘃𝗲 𝗔𝗜’𝘀 𝗔𝗰𝘁 𝗼𝟭 (𝗦𝗲𝗾𝘂𝗼𝗶𝗮) The AI revolution is not just a technological shift but a massive investment op. Here’s how AI is transforming things: • 𝗧𝗵𝗲 𝗔𝗽𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗟𝗮𝘆𝗲𝗿:  --The Hotbed for GrowthAI’s real potential lies in applications, creating value by transforming workflows and customer experiences. --Expect 100+ AI-driven companies reaching unicorn status, a stark contrast to previous tech shifts. • 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗲𝘀 𝗣𝗿𝗶𝗺𝗲𝗱 𝗳𝗼𝗿 𝗗𝗶𝘀𝗿𝘂𝗽𝘁𝗶𝗼𝗻:  --AI will deeply impact healthcare, education, retail, and more, moving beyond simple automation to complex reasoning. --These industries, traditionally slower in tech adoption, now face rapid, AI-fueled evolution. • 𝗕𝗲𝘆𝗼𝗻𝗱 𝗨𝗻𝗶𝗰𝗼𝗿𝗻𝘀:  --Bigger Players on the HorizonAI will likely produce not just unicorns but also decacorns, hectocorns, and potentially megacorns as it penetrates every sector. --Investors can anticipate significant returns as AI-driven applications achieve large-scale growth and industry dominance. • 𝗔𝗜’𝘀 𝗕𝗿𝗼𝗮𝗱 𝗠𝗮𝗿𝗸𝗲𝘁 𝗜𝗺𝗽𝗮𝗰𝘁:  --Unlike previous tech waves, AI is omnipresent, transforming virtually every industry in ways that are shaping entirely new business models. --This scale of disruption presents opportunities in both vertical and horizontal markets, allowing startups to capture niche or broad-based demand. • 𝗔𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿’𝘀 𝗗𝗿𝗲𝗮𝗺:  --A Unique MomentWith AI’s ability to reason and solve domain-specific problems, this era marks an unprecedented moment for investment returns. --The forward-thinking investor stands to benefit enormously from the early-stage positioning in AI-driven startups across all sectors. For another perspective, read: Do startups have a chance vs big tech in the age of AI? History says yes…in due time https://lnkd.in/d3sUHBxc https://lnkd.in/dUPSYt6W

𝗔 𝗿𝘂𝗹𝗲 𝗳𝗼𝗿 𝗹𝗶𝗳𝗲: 𝗪𝗵𝗲𝗻 𝗶𝗻 𝗱𝗼𝘂𝗯𝘁, 𝘇𝗼𝗼𝗺 𝗼𝘂𝘁 You live your entire life zoomed in. 𝗜𝘁 𝗰𝗿𝗲𝗮𝘁𝗲𝘀 𝘁𝘄𝗼 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀: 1. The struggle feels bigger than it is. 2. Growth feels smaller than it is. Zooming out provides perspective—on the true nature of your struggles and growth. 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝘄𝗮𝘆𝘀 𝘁𝗼 𝘇𝗼𝗼𝗺 𝗼𝘂𝘁: 1. 𝗩𝗲𝗿𝘁𝗶𝗰𝗮𝗹𝗹𝘆: Zoom out via “altitude” and see the bigger picture context of the moment. 2. 𝗛𝗼𝗿𝗶𝘇𝗼𝗻𝘁𝗮𝗹𝗹𝘆: Zoom out via “mental time travel” to the past or the future and observe the present through that new lens. Go back 10 years and think about how your past self would be in awe of where you are today. Go forward 50 years and think about how your future self would give anything to be back doing the things you get to do today. Both vertical and horizontal zoom outs work wonders. Always remember: When in doubt, zoom out. 𝘚𝘰𝘶𝘳𝘤𝘦: 𝘚𝘢𝘩𝘪𝘭 𝘉𝘭𝘰𝘰𝘮, formatting by me (#adding value)

𝗔𝗹𝗲𝘅𝗶𝘀 𝗢𝗵𝗮𝗻𝗶𝗮𝗻 𝗲𝗺𝗮𝗶𝗹 𝘁𝗼 𝗿𝗲𝗰𝗿𝘂𝗶𝘁 𝗦𝘁𝗲𝘃𝗲 𝗛𝘂𝗳𝗳𝗺𝗮𝗻 𝗮𝘀 𝗰𝗼𝗳𝗼𝘂𝗻𝗱𝗲𝗿 𝗼𝗳 𝗥𝗲𝗱𝗱𝗶𝘁 In 2004 Alexis had an idea but he needed a cofounder. How do you go about getting someone to join you on a crazy voyage? This is the email he sent to Steve Huffman in 2004 which was the start of creating a $6b company. 𝗔𝗹𝗲𝘅𝗶𝘀 𝘄𝗿𝗼𝘁𝗲 𝘁𝗵𝗶𝘀 𝗼𝗻 𝗧𝘄𝗶𝘁𝘁𝗲𝗿: 𝘐 𝘸𝘳𝘰𝘵𝘦 𝘵𝘩𝘪𝘴 𝘦𝘮𝘢𝘪𝘭 𝘵𝘰 𝘚𝘵𝘦𝘷𝘦 𝘵𝘰 𝘵𝘳𝘺 𝘢𝘯𝘥 𝘤𝘰𝘯𝘷𝘪𝘯𝘤𝘦 𝘩𝘪𝘮 𝘵𝘰 𝘫𝘰𝘪𝘯 𝘮𝘺 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘣𝘢𝘤𝘬 𝘪𝘯 2004 𝘢𝘧𝘵𝘦𝘳 𝘮𝘺 𝘞𝘢𝘧𝘧𝘭𝘦 𝘏𝘰𝘶𝘴𝘦 𝘦𝘱𝘪𝘱𝘩𝘢𝘯𝘺. 𝗕𝗼𝗻𝘂𝘀 𝗿𝗲𝗮𝗱𝘀: Without Their Permission - Free book by Alexis ;) https://lnkd.in/dBBUuHb5 The Reddits - Paul Graham reminisces on the early days https://lnkd.in/dUZ8aQ8s

𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵𝗲𝗱 𝗹𝗲𝗮𝗿𝗻𝗶𝗻𝗴𝘀 𝗼𝗻 𝗳𝗼𝘂𝗻𝗱𝗲𝗿 𝗽𝗿𝗼𝗳𝗶𝗹𝗲𝘀 𝘁𝗵𝗮𝘁 𝗿𝗮𝗶𝘀𝗲 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝘚𝘰𝘶𝘳𝘤𝘦: 𝘈𝘥𝘢𝘮 𝘚𝘩𝘶𝘢𝘪𝘣, 𝘌𝘱𝘪𝘴𝘰𝘥𝘦 1 Adam analysed 15,000 early-stage start-ups to determine the optimal profile for fundraising. Here’s what he found: 💡 𝗧𝗵𝗲 𝗻𝗮𝗺𝗲 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗺𝗮𝘁𝘁𝗲𝗿𝘀. Start-up names less than 6 characters in length were twice as likely to raise as names longer than 15 characters. 💡 𝗖𝗼-𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗵𝗲𝗹𝗽 𝗺𝗮𝘀𝘀𝗶𝘃𝗲𝗹𝘆. Having multiple founders doubles your chances of raising a future Series-A. 💡 𝗛𝗮𝘃𝗲 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲: Having prior founder experience doubles your chances of raising. 💡 𝗬𝗼𝘂𝗿 𝗨𝗻𝗶 𝗶𝘀𝗻'𝘁 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴: A good school helps, but a great school isn’t necessarily better. Founders attending top-10 universities didn’t have a fundraising advantage over those attending top-100 universities (rankings determined by QS) 💡 𝗬𝗲𝗮𝗿𝘀 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 𝗱𝗼𝗲𝘀𝗻'𝘁 𝗺𝗮𝘁𝘁𝗲𝗿: Years of experience doesn’t matter. Early-stage founders with <5yrs of experience were just as likely to raise a Series-A/Series-B as founders with 15-20yrs of experience. 💡 𝗣𝗵𝗗𝘀 𝘀𝘂𝗰𝗰𝗲𝗲𝗱: PhDs were twice as likely to raise follow-on rounds. Do you agree from your lived experience?

AI LEGAL TECH (VC RESEARCH) According to LexisNexis, 90% of law firms plan to increase their investment in generative AI over the next 5 years. Battery Ventures identified 3 areas after analysis with 70 legal AI startups: 1. 𝗟𝗲𝗴𝗮𝗹 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝗮𝗻𝗱 𝗥𝗲𝘃𝗶𝗲𝘄: AI can streamline discovery and search, quickly identifying relevant data and automating document reviews (Enabling lawyers to focus on high-level strategy). 2. 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝗗𝗿𝗮𝗳𝘁𝗶𝗻𝗴 𝗮𝗻𝗱 𝗡𝗲𝗴𝗼𝘁𝗶𝗮𝘁𝗶𝗼𝗻: From implementing playbooks to automated hyperlinking, AI can expedite document creation and assist in negotiations (Example: Ontra using AI for 90% of contract processes). 3. 𝗣𝗮𝘁𝗲𝗻𝘁𝘀 𝗮𝗻𝗱 𝗜𝗻𝘁𝗲𝗹𝗹𝗲𝗰𝘁𝘂𝗮𝗹 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆: We anticipate the emergence of tools that can parse complex documents and identify prior art, completely transforming the patent landscape (U.S. patent market valued at over $3 trillion). The market is diverse with solutions targeting various segments from BigLaw to solo practitioners. This has led to the emergence of: • 𝗚𝗲𝗻𝗲𝗿𝗮𝗹𝗶𝘀𝘁 𝗽𝗹𝗮𝘁𝗳𝗼𝗿𝗺𝘀: Harvey, Leya, Cicero (stealth) • 𝗡𝗶𝗰𝗵𝗲 𝗽𝗹𝗮𝘆𝗲𝗿𝘀: Norm AI (compliance), EvenUp (personal injury) Recent funding activity, such as EvenUp's $135 million Series D, underscores investor confidence. 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀: • Data security concerns • Change management in a conservative industry • Potential reduction in billable hours With over 1.3m active lawyers in the US the addressable market is substantial. While AI excels at handling formulaic tasks, its capabilities in higher-level legal work remain unproven. Recent regulatory actions such as FTC fines against DoNotPay serve as a reminder of the need for an accurate representation of AI's current abilities.

Interested to know how much ARR is being made by generative AI firms? I don't get how Jasper is at $90m? I thought they would have been wiped out once people heard of OpenAI... But tell me what you think the future looks like for startups that leverage LLMs? Sapphire have made a good research report (I'll put the link in the first comment). Here is a quote: "The unprecedented growth of Nvidia’s data center business and OpenAI’s rapid expansion post-ChatGPT launch have set unrealistic expectations for the broader market. While we may not yet see many products at a scale significant enough to move the needle for big tech, we are seeing a broadening of categories with GenAI products at $25M, $50M, and $100M+ scale. This is both fast and healthy, given the technology’s immaturity. The table below, while imperfect and incomplete, is directionally correct and indicative of a growing number of scaling start-up and incumbent businesses. Based on our interactions with startups, we know many more companies will clear these levels of ARR in the near future."

OnlyFans make $1.3b a year with a team of 42. True thot leadership. Trung Phan notes: - $1.3B is net revenue figure (it paid out >$5B to creators) - 2 years ago had 61 staff To add: - Valve is $19m - Tether is $85.5m (Profit- $5.2b with 123 staff) - Butcherbox is $2.7m Twitter is having a field day taking the mickey out of people posting 'insightful' perspectives on this chart ;) "I finally figured out what VCs are good for: delivering a solid dose of comedy to get us all through the weekend." "Always get a good laugh from "thought leadership" on LinkedIn." I have a good link to read. I'll add it in the comments.

STARTUPS - EXTEND YOUR RUNWAY (PPT from Sequoia on making your startup live longer.) Whilst $ is going in to AI, raising is still not easy.  - 3y post-bubble to revert to a normal funding environment - Venture funding was halved in '01, so plan 36m funding Growing at all cost is over (VCs don't have the $ to keep it up). Time to get cozy with your P&L statement. - Break it down, dissect it, understand every nook and cranny. - Where’s your money going? - What’s giving you the most bang for your buck? It’s like Marie Kondo-ing your finances – if it doesn’t spark joy (or growth), thank it and let it go. Plot your potential cost-cutting measures on a matrix: - High impact, easy to execute (The dream scenario 😍) - High impact, hard to execute (Brace yourself 😰) - Low impact, easy to execute (Why not? 🤷♂️) - Low impact, hard to execute (Maybe save this for later… or never 🙅♀️) Focus on the high-impact moves, even if they’re tough. Your future self will thank you Set a Goal, Then Add 12 Months - Think you need two years to hit your next milestone? Great, now aim for three. Why? - Because you want to start fundraising a year before you run out of cash. Here is the deck. Check my blog in comments.

Startup Fundraising: The New 2.5-Year Rule (Data source: Peter Walker, Carta) The traditional 18-24 month cycle between startup funding rounds is outdated. Is it shocking to you? But there seems to be a shift in fundraising timelines The median interval between rounds is extending to 26 months in 2024, from the usual 18m. KEY LEARNINGS: # Extended timeline: Startups should plan for at least 2.5 years between raises, up from the previous 18-24 month standard. # Resource management: With longer periods between funding, strategic cost control, particularly in payroll, is crucial. # Sustainable growth: While pursuing growth, startups must prioritize sustainability. Even AI companies, despite more frequent raises, need to aim for "default alive" status. # Market adaptation: The shift began in 2022, coinciding with changes in interest rates and VC market dynamics. # Sector variations: Some industries, like AI, are raising more frequently but still exceed previous medians. This new landscape presents a delicate balance for founders: managing longer cash burn periods while maintaining attractive growth prospects for investors. The data underscores a clear message: securing new capital takes longer (7years), necessitating a recalib of startup strategies. If you are a startup or early investor- is this what you are seeing??