"I read a stat recently that said only 1 in 5 to 1 in 7 companies actually reach that Series A mark from the seed round. The expectation is that instead of reaching $800,000 in revenue, you're now going to be reaching $3 million in revenue within the first year or two. It's quite a hard area to hit. There is a really big bifurcation in venture capital right now." - John Lin, Founder of Linea Ventures
"The toughest thing about AI is the pace at which things are changing; companies are developing so fast that there is not as much defensibility as there once was. You have to be really careful about where you invest and make sure that you are constantly innovating to create some level of customer lock-in or data generation that establishes long-term moats." - John Lin, Founder of Linea Ventures
"In the last four to five years, more money has shifted towards the pre-IPO market, and today, companies worth over $1 billion make up about two-thirds of the funding rounds. However, if you are a normal founder who wants to go and raise $1 billion, it is actually quite difficult. You need to be one of the top AI researchers or AI founders in the space in order to go and raise such a round." - John Lin, Founder of Linea Ventures
The next three years should deliver what the last thirty did. That is John Lin's argument, and it is why he thinks the ground under founders has shifted.
John Lin is the Founding Partner of Linea Ventures. Previously, he helped start F-Prime Capital's west coast tech practice and was also a Principal at Trinity Ventures. He has invested in 50+ companies, including Numeral, Squire, Branch, Side, Weights & Biases, Triumph and You.com. Prior to that he led Product and Engineering at Roomi and worked at McKinsey and Yelp. John graduated with degrees in Business and Computer Science from UC Berkeley.
He joined Jeremy Au on why AI coding has made good engineers five to ten times more effective, why everything in AI is both overhyped and undervalued at once, and where value still accrues now that a model costing billions to train can be built for tens of millions.
Then the part most founders have not priced in. A Series A used to mean $800K in revenue and a $40M round. Today it is closer to $3M and $70M, and by John's reading only 1 in 5 to 1 in 7 companies make the jump. Round to round survival has fallen from about half to somewhere between a third and a sixth.
Plus how he picks: a $1B market, a path to 25x, companies between $1M and $10M in revenue, and the one question every founder has to answer.
John’s LinkedIn: https://www.linkedin.com/in/john-lin-39a18921/
Linea Ventures: https://lineavc.com/
Keywords: AI Investing, Venture Capital, Seed Funding, Series A Crunch, AI Infrastructure, Startup Defensibility, Angel Investing, Silicon Valley Tech, Founder Advice, SaaS and Fintech
