Max Faingezicht

I’ve spoken to over 2 dozen MDs at PE firms I can confidently say that the arb of figuring out how to implement Vertical AI at portfolio companies is very real right now It will fundamentally change underwriting for those who can do it predictably and unlock generational returns. Most are aware they need to act. Very few have.

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Hot take: Big SaaS isn't dying. Not even close. SaaS incumbents have structural advantages that matter even more in an AI-driven world: proprietary data context, embedded governance and authority, deep distribution, and durable ecosystems. These are exactly the things most AI-native startups are trying to earn, and it's harder to work backwards. SaaS incumbents with a clear AI vision and tight execution will not only survive, but benefit from the AI revolution. This Avenir deck was a good reaffirmation of that view. Worth the read. Link in comments.

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Trying something new this week - a studio industry roundup with my take on what matters. The studio model is no longer an experiment being run in a handful of places. It is infrastructure being built across geographies, sectors, and institutional types. 5️⃣ stories from the past seven days:  1️⃣ OSS Ventures hit a EUR 40M first close on a EUR 75M follow-on fund -- capital raised specifically to back the 30 companies their studio created since 2019. The "build then fund" lifecycle is maturing. B'More Venture Studio with a similar thesis: studio operations first, then dedicated capital to scale what's working.  2️⃣ Delta40 raised $20M from 54 investors across 13 countries to launch Africa's first integrated venture studio and fund. The LP base is almost entirely DFIs and foundations. Impact capital is discovering the studio model as a deployment vehicle, something I seeing across geographies (conversations with Michael Bob Starr and Damias McDonald this week alone) 3️⃣ Start Holdings launched Start.vc out of NYC and Barcelona after a $200M EV infrastructure exit. Another operator-turned-studio-founder. This is the pattern we see quite often in our work at 9point8 -- experienced operators like Jason Goldsmith who've built and exited deciding the studio model is how they want to build next.  4️⃣ UBC HATCH admitted 10 new deep-tech spinouts for Winter 2026 -- mostly climate tech. University venture builders are quietly becoming one of the fastest-growing segments. Follow Evan Allen and Jaimie Testai to keep track of its rapid evolution.  5️⃣ The INVEST Act is advancing through the Senate. If passed, it expands qualifying VC fund size from $10M to $50M and loosens general solicitation rules for accelerator and university events. For studio-funds -- and for folks in the The Venture Studio Forum community tracking policy -- this could be the most significant capital formation legislation since the JOBS Act. If this roundup format is useful, I'll keep it going. What other noteworthy news hit your desk this week, and what stood out to you?

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The most salient narrative in tech today is the end of software. Public software companies have been pummeled, down 20%+ in the last 3 months. But I think the bear case rests on weak logic. There are 3 main categories of concern driving this narrative: 1. Vibe coding means businesses build their own software 2. AI automates away jobs, and seat licenses plummet 3. AI-native companies take share from legacy incumbents The first one doesn't hold up. The second is too important to dismiss casually, but lacks evidence thus far. The third strikes me as most threatening, but it, too, rests on a flawed logical foundation.   On rolling your own software, customers who choose to build almost always regret it. An internal IT team can build a CRM, but they can't maintain and improve it like a dedicated software company. Anthropic spending 8-figures on Workday for HR software shows that incumbent providers have more to offer than software skeptics realize.   Sure, there's a risk of AI automating away seats (and therefore seat licenses). But this creates opportunity for software incumbents to deliver AI-infused software that allows customers to do just that. Software vendors can easily shift to usage-based or other value-based pricing models. Relatedly, there's a larger fear that AI will trigger massive unemployment among knowledge workers. This deserves to be taken seriously. However, unemployment is currently quite low by historical standards, and current AI is beyond what most considered AGI a few years ago. I think the worriers here are moving the goalposts. The third concern--AI-native companies decimating software incumbents--is the most formidable. 20-25 years ago, Google hoovered up the attention economy by building the dominant consumer Internet product. Could Anthropic or OpenAI do something like this in b2b? It's not my base case, but it's the scenario that goes the farthest with me.   That said, I think there are 2 misunderstandings embedded here.   The first is that only AI startups can use AI tooling to accelerate product velocity. They aren't. The engineers at Shopify and Workday have the same access to Cursor, Claude Code, or open-source AI models.   The second, bigger misunderstanding is that these markets are zero-sum. By definition, technology expands the existing pie. So I disagree with the idea that AI growth will come at the cost of existing software companies. AI will massively expand software spend.   Which brings me to what's hardest to reconcile. If you believe AI-native startups will create major value, you're implicitly underwriting a world with fragmentation and switching costs among knowledge work tools. You can't hold that public software companies are all in the blast radius of Anthropic AND back the Harveys or Open Evidences of the world.   It doesn't add up, as the bull case of one is implicitly the bull case of the other. And while the market is voting like these are opposites, I expect the weighing machine to disagree.

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Over the past few years, fundraising has become significantly tougher, especially for smaller funds. This, unfortunately, is the case even for VCs delivering solid returns. In my recent Crunchbase piece, I talk about how emerging managers can survive (and even thrive!) in a challenging fundraising environment. I discuss why the process today is more about familiarity than performance, and highlight places where managers should look for capital that others ignore. Check out the full column via link in comments. Curious to hear from other managers who have recently raised successfully. Which part of this rings true?

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