What 3 Top VCs Really Think About the AI Frenzy

During TechCrunch’s StrictlyVC event in Athens, part of the Panathēnea festival, I spoke with Niko Bonatsos of Verdict Capital, Andreas Stavropoulos of Threshold Ventures, and Ben Blume of Atomico about the current venture landscape, the impending SpaceX mega-IPO, and where significant opportunities remain.

The following discussion has been edited for brevity and clarity. The full conversation is available below.

Given SpaceX’s rumored $1.75 trillion IPO valuation, with OpenAI and Anthropic potentially close behind, what will be the broader market impact?

Andreas Stavropoulos: The Google IPO was a pivotal moment that reopened a tech-pessimistic market in the early 2000s, empowering a new generation of entrepreneurs. We are witnessing a similar shift now. With each paradigm shift, the scale increases exponentially, which is expected. In today’s information age, virtually every business is a technology business.

Ben Blume: These are exceptional companies. Each major liquidity event generates wealth and returns that fuel the next generation of startups.

Niko Bonatsos: My Verdict co-founder was the first investor in Cursor, now reportedly valued at $60 billion by Elon Musk. If SpaceX is having a moment, Cursor might too. More broadly, as Andreas noted, these companies target vastly larger markets. Immigrant founders, like Musk, often dream big and have little to lose, making them ideal for such ambitious ventures. For those of us from smaller markets like Greece, this is an inspiring example.

Could SpaceX’s massive valuation absorb so much public capital that it harms subsequent IPOs? Is this a valid concern?

AS: Perspectives vary, but macro-level benefits likely outweigh short-term liquidity absorption. SpaceX will likely attract more participants to the market than it removes. Over the last 30 years, retail trading has shifted from niche to daily activity via smartphones, significantly expanding market participation.

BB: SpaceX is unique. Historically, space was a government domain. Providing investors with financial access to it captures widespread imagination. While it may divert some long-tail capital from software startups, the interest and engagement it generates more than compensate.

Is the current surge in AI capital justified by future earnings, or is it driven by extreme FOMO?

NB: AI-native founders in the US currently operate in a fast-paced environment. Those outside this niche face significant challenges. In 17 years in Silicon Valley, I’ve never seen such groupthink. Nearly 75% of venture capital raised last year went to just five companies. Today, a Stanford professor not working in AI is largely ignored.

However, real change is occurring. Two founders using modern AI tools can achieve in two months with one funding round what previously required ten people, two rounds, and a year of work. This is transforming startup formation and capitalization, potentially allowing companies to jump from pre-seed directly to Series B.

AS: A correction will eventually push some capital out of the market. While optimism currently outpaces short-to-medium-term results, long-term macro trends justify the outlook. However, this does not imply that every young entrepreneur with an idea is a sure bet.

How do you price deals in such a fast-moving environment?

BB: Top founders have abundant capital options. Funds must determine what constitutes a meaningful ownership stake and walk away if terms are unfavorable. Our $500 million fund competes with $10–15 billion funds for the same opportunities. The marginal value of capital differs significantly, distorting round sizes and making comparisons difficult.

NB: We focus on first-money investing, akin to angel or early-stage funding. We back “freaks” — individuals who, like elite athletes, break records by learning and maturing in days what takes average founders a week. Most founders we support work on unnamed markets, keeping valuations low. Large asset managers cannot instruct teams to find companies in non-existent markets.

Many young founders receive term sheets immediately. Is age a meaningful proxy for success currently?

AS: During periods of fundamental disruption, lack of experience can be an advantage, as established experience may lead astray. This does not mean the trend is permanent; we are in a phase of unsettled dynamics that favors new ideas and younger entrepreneurs. However, generalizations should be avoided.

NB: This mirrors my experience as a Stanford grad student in 2009, when the iPhone was two years old and the App Store one. Days with more VCs than students were common. Today is a similar singular moment. A 22-year-old in San Francisco building in AI might receive a seed term sheet, but a 19-year-old is exceptional — possibly already holding a Series A offer. Age is relative; I recently met a 24-year-old founder in Athens, and when I said he wasn’t young, I meant it: I met the Mercor founders when they were 19, and look at their success now.

Image Credits:TechCrunch / StrictlyVC

BB: Focusing solely on age misses the key factors: intense drive, the ability to outpace market trends, and mental agility in a constantly changing landscape. These traits matter more than the age on a passport.

What is your view on questionable practices regarding metrics, particularly how companies report ARR [annualized recurring revenue]?

BB: Definitions of ARR vary widely. New pricing models, such as token-based billing or counting free tokens as revenue, create numerous ways to manipulate these figures. Investors must cut through this noise to make decisions based on actual performance. While such practices may aid marketing, they are unsuitable for capital allocation. Sophisticated investors can generally discern the truth.

NB: I sometimes receive emails from portfolio companies reporting unusually high ARR, only to discover the spike was due to a single campaign. I advise using quarterly averages. When capital chases specific themes, some adopt short-term grifting tactics.

In venture capital, you lose money once on a bad investment, but a successful one can return 100x. Thus, we write off bad actors and move forward.

For aspiring founders, where do you see white space today?

NB: VC firms once dedicated half their partners to consumer internet investing; now, perhaps half a person. Yet, OpenAI’s massive growth via ChatGPT highlights the return of consumer focus, which may seem surprising. Today’s consumer founders have limited investor options for early rounds. A new movement in consumer fintech may help restore the American dream.

BB: AI’s interaction with the physical world offers opportunities orders of magnitude larger than workflow automation and digital processes. The physical economy remains significant. Betting on robotics in all forms — not just humanoid backflips — represents one of the largest open spaces over the next decade.

If you’re interested in learning more about what the three think — including about whether Stanford University has grown too cozy with the venture capital industry — you can check out the full conversation below: