AI Frenzy: 3 Top VCs on the Groupthink Boom

This week at TechCrunch’s StrictlyVC event in Athens, part of the city’s Panathenea festival, I spoke with three prominent venture capitalists about the current state of investing, the looming wave of mega-IPOs, and where they still see untapped potential. Niko Bonatsos of Verdict Capital, Andreas Stavropoulos of Threshold Ventures, and Ben Blume of Atomico shared their takes on the market’s biggest trends. The conversation below has been edited for length and clarity. The full discussion is available at the bottom of this page.

With SpaceX reportedly targeting a $1.75 trillion valuation at IPO, and OpenAI and Anthropic possibly following suit, what will this mean for the broader market?

Andreas Stavropoulos: I recall the excitement around the Google IPO and how it reopened a market that had been deeply skeptical of tech in the early 2000s. It was a catalyst that inspired a new wave of entrepreneurs. The same dynamic is unfolding now. With each paradigm shift, the scale expands by orders of magnitude, and that’s natural. In today’s information age, what business isn’t a technology business?

Ben Blume: These are extraordinary companies. Each of these massive liquidity events generates wealth and returns that flow back into funding the next generation of startups.

Niko Bonatsos: My co-founder at Verdict was the first investor in what’s now called Cursor. So if Elon Musk is having a good moment, maybe Cursor,which Musk recently hinted he might acquire for $60 billion,will see some positive news too. More broadly, for the next wave of companies, as Andreas noted, they could target even larger markets. Immigrant founders, like Musk himself, tend to dream big, take risks, and go the distance. For those of us from Greece or other smaller markets, that’s an inspiring example.

Some worry that a SpaceX at that valuation could absorb so much public market capital that it hurts companies going public afterward. Is that a real concern?

Stavropoulos: You can view most things optimistically or pessimistically and make strong cases for both. A company like SpaceX, at a macro level, will likely draw more people into the market than the short-term impact of absorbing some liquidity. Consumer involvement in markets has exploded over the last 30 years,from almost nothing to people trading on their phones daily. Those numbers add up.

Blume: SpaceX is truly one of a kind. For years, space was dominated by government and public sector players. Giving investors financial access to it will capture widespread imagination. It might divert some long-tail allocations that would have gone into the next 20 or 30 software businesses, but the interest it generates more than makes up for it.

Is the current flood of capital into AI justified by future earnings, or is this extreme FOMO?

Bonatsos: If you’re an AI-native founder or a company in the American dynamism space, you can live life in the fast lane. If you’re not in one of those categories, it’s incredibly tough. In 17 years in Silicon Valley, I’ve never seen more groupthink. Three-quarters of all venture capital raised last year went to just five companies. Today, if you’re a 40-year-old tenured Stanford professor not building something in AI, no one wants to meet you.

That said, something real is shifting. Two founders with today’s AI tools can achieve more in two months with one funding round than they could a year ago with ten people, two rounds, and a full year of work. This is transforming how companies are started and capitalized,potentially skipping from pre-seed straight to Series B.

Stavropoulos: There will be a correction that pushes some capital out of the market. The promise and optimism still far outpace the short- to medium-term ability to show results. But on a long-term, macro scale, I don’t think we’re being overly optimistic. The problem is that shouldn’t be mistaken for thinking every 19-year-old with an idea is the next big thing.

How do you actually price deals when things move this fast?

Blume: The best founders have no shortage of capital options. You have to decide what’s a meaningful ownership stake for your fund and walk away when you can’t get there. The interesting dynamic is that we’re a $500 million fund competing with people investing from $10 or $15 billion funds. The incremental value of a dollar to us versus them is very different. That distorts round sizes and makes it hard for offers to compare directly.

Bonatsos: We focus on first-money investing,essentially replacing friends and family or angels. We invest in what I call “freaks,” individuals who, like in professional sports, break all the records. A day passes, and they learn and mature at a pace that takes the average smart founder a week. Most of the founders we’ve backed are working on markets that don’t even have a name yet,which is exactly why valuations are low. Larger asset managers can’t tell their teams to find companies in a market that doesn’t exist.

There’s a lot of talk about very young founders getting term sheets almost on arrival. Is age really a proxy for anything meaningful right now?

Stavropoulos: During times of disruption, when the world seems to be changing fundamentally, inexperience can be an advantage. Experience can actually lead you astray. That doesn’t mean it’s changed forever,we’re in a phase where things haven’t settled, creating fertile ground for new ideas, often from younger entrepreneurs. But I don’t want to over-generalize.

Bonatsos: The same thing was happening when I arrived as a grad student at Stanford in 2009. The iPhone was two years old, the App Store was one, and there were days when more VCs were on campus than students. Today is another singular moment. If you’re 22 in San Francisco building something in AI, a seed term sheet might land in your inbox,but if you’re 19, that means you’re really good; you might already have a Series A offer. Age is relative,I talked to a 24-year-old founder here in Athens this week, and when I said he wasn’t that young, I meant it. I met the Mercor kids when they were 19, and look where they are now.

Blume: If you generalize just from age, you miss what you’re really looking for: an extremely high level of intensity, the ability to move ahead of the market’s pace, and the mental dexterity to adapt in a constantly changing landscape. Those qualities matter more than the number on a passport.

What do you make of shady behavior around metrics, particularly how companies report ARR?

Blume: People are being relatively liberal with how they define the A, the R, and the R. New pricing models,token-based billing, free tokens counted as revenue,create many ways to express these numbers. Our job as investors is to cut through that and make decisions based on actual truths. Is it fine from a marketing perspective? Probably. Is it fine for deciding which companies get capital? No. But sophisticated investors can generally see through it.

Bonatsos: Sometimes I get an email with a very high ARR number from a portfolio company I didn’t remember doing that well, so I contact the founder. The answer? It was 365 times what they made the day before because a campaign hit. I told him to use a quarterly basis at least. Whenever a lot of money chases specific themes, some people develop a grifting mentality for short-term gain. In venture, you can only lose your money once on a bad investment, but the right one can return 100x,so you write off the bad actors and move on.

For aspiring founders, where do you see white space right now?

Bonatsos: Every VC firm used to have at least half its partners doing consumer internet investing. Today, maybe they have half a person,they’ve left the field entirely. But one of the best AI companies of the last few years, OpenAI, became massive because of ChatGPT. Consumer is coming back, which is almost a crazy statement. Those founders today have maybe five investors to pitch for their first or second round. I also think a new movement is emerging that will help restore the American dream through new consumer fintech ideas.

Blume: The opportunity for AI to interact with the physical world is orders of magnitude larger than what we’ve seen in workflow automation and digital processes. The physical world still shapes a large part of the economy. The bet on robotics in all its forms,not just the humanoid doing a backflip,remains one of the biggest open spaces over the next 10 years.

If you’re interested in hearing more from the three,including whether Stanford University has grown too cozy with the venture capital industry,check out the full conversation below.