Sam Lessin on Venture Capital & Investing

Essays

From the Podcast

You can't make any money on those. And the reason you can't make any money on those is because with open access, someone will always overbid or overprice. It just doesn't work. So it turns out that when markets get too efficient, they're bad businesses. And technology and AI makes markets efficient. The only way to have a good business, the only way to do a good venture deal is to have proprietary deal flow. You need a dark pool of deals that no one else knows about or dark pool of founders that no one else knows about or access that no one else has that's sustainable and ideally compact. And I think we're going to see this in a lot of things. We're like, the internet was all about bringing liquidity to marketplaces saying, okay, there is this inefficient market and we're going to make it more efficient and make money on it by effectively aggregating demand, supply and demand and hosting the market. I think that goes to zero value because it's too efficient and everything becomes in a company building sense about forget the software, forget the market story. It's all about can you own and control dark pools of value effectively? and then monetize them consistently.

— Sam Lessin, More or Less Ep 139

Right? So the thing that people miss about capitalism is that when anything's open, it ultimately collapses margins to zero. That's like how capitalism works. Right? So it's kind like in the public markets, you can't win against the people who are algorithmically trading super fucking fast in like the public markets. Right? On, on, if you think about it in our world, in the venture world, the public market is all the random ass companies and YC or things that everyone knows about. can't make any money on those.

— Sam Lessin, More or Less Ep 139

Here's the thing about it. There's no margin for the people that underneath them because they're sitting there like, like open RSA, they've built models and they just like arbitrage between them to zero, right? To your point about the Chinese open source models, they'll sit there and be like, okay, well, like this one's going to take longer, but it's cheaper or whatever. It's just the price of energy. like in let the only, the idea that this is my whole thing about AI, open AI in particular, being a company that sold this vision for cheap capital and buys 20 cents on the dollar of infrastructure for it to become a power. Right? Is that like, just because you use a lot of something doesn't mean it's valuable or a good business. Right? And like, I think this is like the upshot is like, I don't disagree with you.

— Sam Lessin, More or Less Ep 139

Yeah, I get it. It it becomes more interest. A hundred percent, but it also just becomes really interesting when, you think about like, okay, like right now you're talking about the loop is the economy question, economy, hot, infinite capital for these like head labs with questionable economics long-term, right? But like, it's fine. And like, they can run faster if all of a sudden they can't run as fast because they don't have the same infinite access to capital. Like, how does that play out? Right? Like there's all of a sudden, like, you know what I mean? Like all of a sudden the edge.

— Sam Lessin, More or Less Ep more_or_less_indian_wells_2026_03

But let's pretend it really did happen, even in the case of big ones like Harvard. It's annoying. You don't get to grow as quickly. endowment, like it makes it harder for donors to justify investing. And it does change what you invest in because you're going to want to like not have profits, right? So you can compound without taking profits continuously. Like there's like a strategy shift, but it's not fully existential. It's just annoying.

— Sam Lessin, More or Less Ep 99

That means that over time nonprofits will eat the entire capital stack of America in periods of prosperity. That doesn't sound right to me, right? So if you really want to redress this from first principles, now that's not practically what's going on. What's practically going on is much more political. It's in the weeds. It's not like a really let's redress the real situation here. It's like, it's much more like vindictive. And I don't think that'll end up playing out when you play it out. think it's great headlines. I don't think it plays out that way.

— Sam Lessin, More or Less Ep 99

But you want long duration assets, which it turns out that things like private investing in tech companies is what you want, right? Versus like hedge funds, which get fucked by this because you have profits every year. So I don't think it's going to happen. I think it's going years of litigation. Even if it does, it's fine. I mean, it's it's annoying. But like, if you really stripped Harvard of its, if you said, Hey, Harvard, you have to 20 % tax on your upside. Your endowment obviously has less bang for its buck in growth.

— Sam Lessin, More or Less Ep 99

But the angels don't matter. Those are tiny. I'm talking about real firms. I'm talking about you don't want Sequoia, Andreessen and Syracuse. No angels are irrelevant. They're just like tiny little baby checks. Who cares about them? It's more about like, you don't want eight venture capitalists on your board that are all big swinging dicks and think that they're in charge. Like that's like bad news. And you want people who can make decisions generally. There are always exceptions, right? But like, that's generally bad. Now again, these are just patterns. It doesn't mean they're right. Doesn't mean there aren't exceptions to it. But

— Sam Lessin, More or Less Ep 99

They're not really businesses. They're just like things that you need, right? And like people don't just build the things you need sometimes. So because I'm a pool house capitalist, I'm just gonna, I just built them myself. I don't care.

— Sam Lessin, More or Less Ep 99

Well, I'll tell you just why exactly. was because that way you can have in the end of the day, like it's all about ego and cheap capital, right? And the end of the day, like you get to a certain point where you've run out of everything, you have all the leverage, like, and Andreessen says, since our job is to ship money in as much as possible, here's also all the control because we don't care. We're just money shippers. And then you're like, egotistically, the next investor is going to also want to be on the board.

— Sam Lessin, More or Less Ep 97

I mean, I think it's more nuanced than that. think first few thoughts. One is I think OpenAI is doing a good job executing with a strategy of OpenAI, right? Which is like they need to grow and they need to market the shit out of like leadership. Like that's what they have to do from zero and get a lot of cheap capital. The big companies are doing exactly what you expect them to do. You can look at it be like, this is classic innovator's dilemma because they can't cannibalize. And so they're going to get taken out. Maybe.

— Sam Lessin, More or Less Ep 97

Right now, they're just competing for the quarterly earning headline of we have many queries of the AI, right? And that's what the game is. And that's fine because it makes cost of capital go down and investors get excited about the AI. It does have to translate into dollars eventually, obviously, right? And I do agree the problem is if 80 % or 90 % of your queries aren't monetizable because they're through bullshit patterns versus an actual pattern people care about, it's just way harder to monetize.

— Sam Lessin, More or Less Ep 97

Yeah, no, I don't know about that. I mean, like, there's plenty of compute floating around from a consumer perspective. I think it's more interesting, like capital raising side, where you're taking like this marked up extremely high leverage bet. And like, if you're an investor, you're like, ah, I got liquidation preference on a bunch of data centers, who cares what it's worth.

— Sam Lessin, More or Less Ep 93

Here's a question, do think there are venture capitalist spies? I've never heard of a VC spy.

— Sam Lessin, More or Less Ep 91

I think, look, the good news, I think for the VC, because at least the early stage one is I do think that like we're past the era of like funny money fights where like you have a thousand little baby, you know, GPs and venture funds running around because everyone's like, whoa, like this is not happening again. Right. So I do think Brit's right. There is, and Dave's right. There's definitely an LP pullback, but I think the biggest, I think it's actually good. I think it just means pricing goes down on things that you're more pricing, discipline or whatever else.

— Sam Lessin, More or Less Ep 90

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