E307: Why Size Is the Enemy of Venture Returns w/Glenn Solomon
Digest
Notable Capital, a spin-off from GGD Capital, focuses on early-stage investments (seed, Series A, Series B) in rounds under $100 million, differentiating itself from larger funds. They maintain a disciplined investment strategy with a long-term horizon, aiming for top-quartile returns with a $650 million fund. AlphaSense is highlighted for its role in refining channel research, providing real-time market insights to identify inflection points. The firm prioritizes a founder-centric approach, aiming to be a valuable partner. The conversation delves into the competitive AI landscape, particularly Anthropic's enterprise strategy and AI's potential to disrupt labor markets across various sectors, creating multi-trillion dollar opportunities. The impact of AI on the software industry and the potential for Artificial General Intelligence (AGI) are explored, emphasizing the importance of innovation and identifying "killer apps." Investors can capitalize on AI's evolution by focusing on applications and services, with rapid user adoption indicating a readiness for AI-based innovations. Core investment principles emphasize focus, deep expertise, and investing with conviction.
Outlines
Notable Capital: Early-Stage Investing and Differentiation
Notable Capital, a spin-off from GGD Capital, focuses on early-stage investments (seed, Series A, Series B) in rounds under $100 million, differentiating itself from larger funds. They maintain a disciplined investment strategy over 2.5-3 years with a long-term exit horizon of 5-10 years, emphasizing time diversification. With a $650 million fund, they aim for top-quartile to top-decile returns.
AlphaSense, Founder Focus, and the AI Revolution
AlphaSense refines channel research for investors, providing real-time market insights to spot inflection points. Notable Capital prioritizes delivering exceptional value to founders through a cohesive team approach. The discussion explores the competitive AI landscape, Anthropic's enterprise strategy, and AI's potential to disrupt labor markets, creating multi-trillion dollar opportunities.
AI's Impact on Software, AGI, and Investment Strategies
The impact of AI on the software industry is analyzed, questioning the "software apocalypse" theory. The potential for AGI and its implications for investing are explored, emphasizing innovation and identifying "killer apps." Investors can capitalize on AI's evolution by focusing on applications and services, with rapid user adoption indicating a readiness for AI-based innovations. Core investment principles of focus, deep expertise, and conviction are emphasized for successful early-stage investing.
Keywords
Notable Capital
A venture capital firm focusing on early-stage investments (seed, Series A, Series B) under $100 million, differentiating from larger funds with a disciplined, founder-centric approach.
Early-Stage Investing
Investing in companies during their initial development phases, characterized by higher risk and potential for significant returns.
AI Market Landscape
The competitive environment of artificial intelligence, including key players and evolving strategies in AI model development and deployment.
Large Language Models (LLMs)
Advanced AI models like ChatGPT and Claude driving innovation across industries.
Labor Market Disruption
The impact of AI and automation on employment, leading to shifts in job roles and the overall labor market.
Software Apocalypse
A theory suggesting AI advancements may devalue traditional software companies by commoditizing code.
Artificial General Intelligence (AGI)
Hypothetical AI with human-level cognitive abilities across a wide range of tasks.
Killer App
A groundbreaking application that drives the adoption of a new technology.
Channel Research
Market intelligence gathering from supply chain participants to understand market trends and dynamics.
Founder-Centric Approach
An investment philosophy prioritizing founder success through strong support and collaboration.
Q&A
How does Notable Capital differentiate itself from larger venture capital firms?
Notable Capital focuses on early-stage investments (seed, Series A, Series B) in rounds under $100 million, differentiating itself from larger funds that concentrate on mega-rounds. Their strategy emphasizes deep expertise and a founder-centric approach.
What is the significance of AlphaSense in the investment landscape?
AlphaSense provides investors with refined channel research, offering continuously refreshed insights into market dynamics. This helps them spot inflection points and make more informed investment decisions by accessing real-time data from operators and channel partners.
How is AI expected to impact labor markets?
AI is poised to significantly disrupt labor markets by augmenting or replacing human tasks across various sectors like software development, finance, and healthcare. This shift creates multi-trillion dollar opportunities as AI takes on more labor-intensive roles.
What is the \"software apocalypse\" theory in the context of AI?
The \"software apocalypse\" theory suggests that AI advancements might commoditize software by making code creation cheaper and easier. This could shift value capture from traditional software companies to service-oriented businesses that effectively leverage AI.
How can investors capitalize on the evolution of AI, especially towards AGI?
Investors can capitalize by focusing on applications and services built on AI infrastructure, identifying \"killer apps\" that drive adoption. Opportunities lie in sectors like healthcare, legal, finance, and in tools that support developers and cybersecurity professionals.
What is Notable Capital's core investment philosophy?
Notable Capital emphasizes investing with conviction based on deep expertise in specific sectors, avoiding \"shiny objects.\" They prioritize understanding core advantages and leveraging networks to make informed, low-loss early-stage bets.
Show Notes
In this episode, I sit down with Glenn Solomon, Managing Partner at Notable Capital, to break down how focused early-stage investing can outperform mega-platform venture funds. Glenn explains why 70%+ of venture dollars now go into mega-rounds over $100M, why Notable stays disciplined at seed and Series A, and how delivering “unscalable” founder support creates real edge. We also go deep on Anthropic, the so-called “software apocalypse,” AGI narratives, and where durable alpha exists in an AI-dominated world.
Highlights:
- Why $350B in venture funding hides a barbell market structure
- How focusing on sub-$100M rounds creates structural edge
- Why size is often the enemy of return
- Building a 42-person team to serve 8–10 new founders per year
- The case for consistent top-quartile vs. volatile top-1% returns
- Anthropic’s enterprise-first positioning and labor market opportunity
- Why AI is attacking multi-trillion-dollar labor markets—not just software
- The pendulum effect behind the “software apocalypse”
- Why distribution and proprietary data still matter in SaaS
- AGI as a phase, not a binary event
- Where net-new opportunity sits above infrastructure
- The danger of chasing “shiny objects” without conviction
Guest Bio:
Glenn Solomon has been a venture capitalist for nearly 30 years and has spent the last 18 years building what is now Notable Capital, the U.S.-focused team that previously operated as GGV Capital before separating in 2023. Glenn invests in early-stage software companies across enterprise infrastructure, cybersecurity, data, and AI. A Stanford graduate and former three-time NCAA national championship tennis team member, Glenn brings a disciplined, team-first mindset to venture investing. He is known for deep sector expertise, strong founder relationships, and a focus on delivering consistent, high-conviction returns through concentrated early-stage ownership.
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We’d like to thank AlphaSense for sponsoring this episode!
Sponsor:
AlphaSense is the market intelligence platform trusted by 85% of the S&P 100 that helps you make confident, data-driven decisions faster than your competitors. With powerful search capabilities designed for hedge funds, mutual funds, and private equity investors, AlphaSense gives you the edge to elevate your research. Visit: alpha-sense.com/howiinvest.
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Disclaimer:
This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.
(0:00 ) Introduction
(1:35 ) Impact of the hot M&A and IPO market on investment strategies
(2:43 ) Advantages and disadvantages of a $650 million fund and budget concentration for impact
(5:38 ) Delivering unique value to founders and competing with large funds
(9:40 ) Investment in Anthropic, AI market landscape, and opportunities
(15:21 ) AI's disruption in the software market and incumbent adaptations
(18:46 ) Investing strategies in a post-AGI world and AGI phase opportunities
(24:58 ) Timeless career advice for investors and the importance of sector expertise
(27:21 ) Closing remarks
Table of contents
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