Frances Song

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.

454

64 Comments

💡 How do you prove you’re ready to lead your first deal in VC? Moving from supporting diligence to leading a deal is a huge leap in VC. In a recent nextNYC webinar, Claire Biernacki explained how she built conviction early on by developing a thesis, backing it with expert calls and research, and earning partner buy-in. For anyone climbing the ladder, this is the playbook. #VCDeals #WomenInVC #CareerTips #StartupInvesting #VCcareers

11

1 Comment

Summary: The venture firm CRV has raised $750 million for its 20th flagship fund, which will focus on investing in early-stage startups, particularly in the consumer and devtools sectors. Key takeaways: CRV's new fund is smaller than their previous one, but still received strong demand from investors. The firm has a history of successful investments, with 80 startups eventually going public since its founding in 1970. CRV is shifting its focus away from late-stage rounds, citing lower overall returns, and towards seed and Series A investments. Counter arguments: Some may argue that CRV's decision to not raise another late-stage fund could limit its opportunities for growth in the future. The success of the new fund will ultimately depend on the performance of the startups it invests in, which can be unpredictable in the volatile tech industry. #venturecapital #fundraising #startups https://lnkd.in/g8d-N9jX

1

Fresh capital alert: These VC firms have secured new funds and are deploying into startups. 🔴 San Francisco-based Sunflower Capital announced $250 million across Funds I and II to back companies at the early-stage infrastructure. 🔴 Austin-based TipTop VC launched a debut fund to invest in pre-seed and seed-stage Vertical AI startups. 🔴 San Francisco-based FPV Ventures closed $525 million for Fund II to invest in long-term, mission-driven startups across sectors. The raise brings the firm’s total AUM to nearly $1 billion. 🔴 Milan-based P101 SGR closed €250 million “Programma 103” fund to support Europe’s digital-transition SMEs. 🔴 London-based Volution launched $100 million fund to scale UK & European B2B software companies post-Series A. 🔴 Austin-based Escalate Capital Partners closed $350 million Fund V to provide growth capital for tech and healthcare firms. 🔴 London-based Verb Ventures launched €25 million fund to back supply-chain data & logistics platforms. 🔴 Santa Clara-based Earthling VC announced $45 million Fund I to back pre-seed AR/VR and robotics startups. 🔴 Stamford-based Haatch closed £7 million fund to invest alongside UK angel syndicates in early-stage B2B startups. #NewFundAlert #VentureCapital #StartupFunding

47

8 Comments

A big milestone today for Grow Therapy, which just announced a $150M Series D led by TCV and Growth Equity at Goldman Sachs Alternatives, with BCI and Menlo Ventures joining Sequoia, Transformation Capital, and SignalFire. When we led Grow’s Series A in 2021, it was rooted in a belief that mental health access in the U.S. isn’t hindered by supply, it’s a systems problem. To win, Grow needed to be deeply integrated into the healthcare ecosystem, not operating as a point solution. In just 5 years, more than 2 million people have used Grow, with over 10 million therapy and medication management visits delivered on the platform. What stands out is the infrastructure the team has built: Grow now partners with 125+ health insurers, including Medicare and Medicaid across most states, reaching 220 million covered lives. At the same time, tools like its clinically-guided AI notetaker are reducing provider documentation time by nearly 70%, helping clinicians focus more on care. This is what durable healthtech looks like: deep payer integrations, measurable outcomes, and technology embedded directly into existing healthcare workflows. Excited to continue partnering with Jake Cooper, Manoj Kanagaraj, MD, Alan Ni, and the entire Grow team as they build trusted mental health infrastructure for insurers, employers, health systems, and most importantly, patients.

472

19 Comments

Two weeks ago, Brex and Capital One announced an agreement for Capital One to acquire Brex for $5.15 billion. This is the largest bank-fintech deal in recent history. I've spent the last two weeks thinking about what this means for the PE firms and portfolio companies I work with. The short answer is that everything just changed in terms of what's possible. Brex and Ramp combined had about 3% of the corporate card market. The real fight was never between us and other fintechs. It was always against American Express, JP Morgan and the big banks who control 90%+ of the market. We've been building great products, but we've been doing it with a fraction of their resources and balance sheet capacity. That constraint just disappeared. On day one, we become the #3 corporate card issuer in the US. We gain access to $700 billion in assets, a $6 billion R&D budget, and the ability to offer credit limits that are 10-20x higher than what we could do before. Our AI roadmap just accelerated by 2-3 years because we now have the infrastructure and capital to move faster than anyone else in the market. What makes this work is that Capital One understands how to acquire without destroying what made the company valuable in the first place – or as Pedro has repeated over the last two weeks, “don’t crush the butterfly.” They did this after acquiring ING Direct and they're doing it with us. Pedro stays as CEO, the team stays intact, the culture stays unchanged. Rich Fairbank built Capital One in the 90s by using data and technology to disrupt credit cards. He sees the same DNA in Brex. This isn't about cost cuts. It's about giving us the resources to win the market outright. For the PE firms I work with, this changes the equation significantly. You now get institutional-grade underwriting capacity with the product innovation and service model you've come to expect from us, all backed by a top-10 bank. Same team, same partnership approach, just with Fortune 50 resources behind every relationship. The future of corporate finance isn't American Express or JP Morgan with a better app. It's AI-powered corporate cards from the people who invented it, spend management, real-time compliance, and embedded banking built on infrastructure that can actually support it at scale. That's what we're building now, and we just got a 50x multiplier on our ability to execute. If you're a PE firm interested in how this impacts your portfolio companies, let's talk.

105

2 Comments

SF VC Takeaway #2: Pricing expectations, performance bars, and what’s actually getting funded. One theme that came up repeatedly in SF was how far pricing expectations and performance bars have shifted, even compared to just a few years ago. A few things investors kept anchoring to: 1️⃣ Median Series A valuations are higher than their 2021 peaks, but fewer of them are getting done. 2️⃣ Capital is being concentrated into fewer and fewer companies (and lots of capital!) 3️⃣ “Good” progress is no longer enough and the bar for standout performance has moved in an AI-native world So what does “top performance” mean right now? One investor told me that top quartile seed companies in their portfolio are going from $0 to $2M in ARR in <12 months. Outside of pure traction numbers, a few other themes that came up to describe "top performance": 📈 Explosive early revenue ramps (or a very credible path to them) 📊 Strong velocity and momentum for 2 quarters in a row, even if the baseline is small. 🚀 Clear signals of category leadership, not just product-market fit. Sometimes shown by either domain expertise, speed of product optimization, or by lack of competition in the category. This creates a counterintuitive dynamic where it can be easier to fund a company with strong pedigrees in a hot space and no traction yet than a company that went from 0 to $1M ARR at what used to be considered a rapid pace. Pricing today is driven by trajectories, not moments in time. We used to say investors invest in lines not points; I think that's more true than ever now because crossing certain milestones doesn't carry as much influence as it once did. Finally, investors still say that valuation matters, but many of them are acting differently. Pace and belief in category-defining companies really sets the price; while slower growth gets scrutinized rather than discounted. One silver lining in the camp of durable growth: Series A rounds are happening so fast that many companies don’t yet have meaningful history of retention data. Large bets are being made on velocity before the durability is proven. Several investors told me the same thing: we may soon swing back to a market where retention, not growth, becomes the defining metric. Let's hope so. I'll share my third SF VC takeaway tomorrow!

59

7 Comments

Noticed that VC funds are getting looooooonger? Special VC roundtable guests Tomasz Tunguz, Dave McClure, and Grady Buchanan discuss a noteworthy trend: venture funds that once extended around 10 years are now stretching to more like 12-15 (mainly because startups are staying private longer). Find out why some companies are remaining private for decades… or even FOREVER in this TWiST highlight.

137

9 Comments

Here's a problem we see all the time in early studios: they copy-paste a VC fund's operating cadence and wonder why nothing feels right. Weekly deal flow reviews. Portfolio monitoring calls. Valuation-focused LP reports. All borrowed wholesale from a fund playbook. But a VC fund's primary activity is deal selection -- source, evaluate, check, board, wait. A studio's primary activity is venture creation -- generate, validate, recruit, build, launch. Those are fundamentally different jobs. When you run a studio like a fund, things break in specific ways: Your meetings are wrong. You're reviewing deal flow instead of venture build progress -- milestones, blockers, resource allocation. The work is building, not sourcing. Your team is wrong. Studios need builders at every level -- operators, designers, engineers. Not just investment professionals. You can't build companies with a team designed to pick them. 📉 Your metrics are wrong. Entry valuations and markups don't tell you anything useful. Cost-to-build-a-venture, time-to-market, and venture survival at 18 months -- those are the numbers that actually measure whether the studio is working. Your LP reporting is wrong. Report operational progress -- what's building, what's launching, what's been killed and why. Not just portfolio movements. Here's the lesson -- the studios that struggle most are the ones that adopted VC templates without modifying them for fundamentally different work. The portfolio companies don't exist until the studio creates them. Not a fund that happens to build things. A builder that happens to have a fund. The operating rhythm should reflect which one is primary. 🎯

10

1 Comment

Early fund success isn't just momentum. It can be a mathematical lock. Consider the following math problem, known as Polya's Urn: - Start with an urn containing one red ball and one blue ball. - Draw a ball at random, return it to the urn. - Whichever color you drew, add one more ball of the same color to the urn. - Repeat 100 times. Now think about this question: if your first two draws are red balls, what’s the probability by 100 draws that the fraction of red balls in the urn is below 50%? Let’s walk through the math... Before your first draw, the probability of red or blue is 50%. The expected value of the mix over time is also 50/50. Now draw your first ball. Draw red, put it back and add another red ball. The Urn is now 2 red, 1 blue. Next-draw probability for red: 67%. Expected long-run red rate: also 67%. Draw again and also draw red. The urn is now 3 red, 1 blue. Next-draw success rate: 75%. Long-run expectation: 75%. The fraction of red balls in Pólya's urn is what mathematicians call a martingale — a process whose expected future value always equals its current value. Wherever the early draws push you becomes the system's new expectation for where it will end up. Early draws have massive influence. The long-run destination is being written in the first few chapters. Now let’s extend this to fund performance. Imagine that each draw represents the performance of an investment. Red means success; blue bad result. Follow the same draw mechanics and you can quickly see that a couple of early successes start to heavily tilt your long-term probabilities. Specifically, if the first two balls you draw are red (successes), the probability that after 100 draws you are less than 50% red (successful) goes to only 12.5%. In just the first two moves, you have greatly shifted the eventual end state probability. This is often what plays out in VC. Ramana Nanda at Harvard and Olav Sorenson at Yale studied investment-level data across hundreds of VC firms in 2020 and found that each additional IPO among a firm's first ten investments predicted an 8% higher IPO rate on all subsequent investments. The mechanism wasn't superior investment-picking. Early success improved reputation expanded co-investment networks, and unlocked deal flow that wasn't previously available. Each success literally added a red ball to the urn. The persistence data confirms the pattern. Harris, Jenkinson, and Kaplan at Virginia, Oxford, and Chicago found that top-quartile VC firms repeated top-quartile performance 48% of the time: nearly double the 25% you'd expect if outcomes were independent. Bottom-quartile firms stayed bottom quartile 40% of the time. Once the urn tilts, it tends to stay tilted. Most models treat portfolio outcomes as independent draws from a fixed distribution. Pólya's urn shows why that's wrong. In systems where success breeds access and failure breeds friction, early results don't wash out. They compound. Cheers!

12

4 Comments

76% of top-performing VC firms say tech tools directly improved deal flow, LP engagement, and internal collaboration 🚀 In 2025, staying competitive in venture capital means embracing the right stack. From sourcing smarter to automating fund ops and marketing, the VC Tech Stack is evolving fast—and those leveraging it are pulling ahead. 🔍 This post breaks down the tools transforming VC operations—from CRMs to LP portals and AI-powered market intelligence. 📬 Want the full breakdown with data, trends, and tool links? Check out this week’s Venture Capital Archive: https://lnkd.in/dg7NzGdn #vctech #vcstack #dealflow #venturecapital #fundmanagement #productivitytools #vcnewsletter #lpengagement #startupfunding #innovationtools #vc2025 #vcarchive

8