Name: The State of Venture
Uploaded: 2026-10-13
Duration: 17 min 12 s

Venture capital has moved from a broad-based bet on innovation to an increasingly narrow one, with a handful of frontier AI companies now absorbing most global investment. Opportunities are emerging well beyond Silicon Valley, even as female and minority founders continue to be significantly underfunded despite evidence of stronger returns. This conversation takes a global view of where capital is flowing next, from who gets funded early to which regions and sectors are poised to define the next wave of growth

Terri Burns, Founder, Type Capital 
Meena Flynn, Chair, Global Private Wealth Management; Co-Head, One Goldman Sachs, Goldman Sachs 
Laela Sturdy, Managing Partner, CapitalG 
Kristin Stoller, Editorial Director, Fortune 

The State of Venture

Conferences

fortune_most_powerful_women_summit

fortunemostpowerfulwomensummit

Hello everyone, how's it going? So thank you 3 for being here with me. I wanna start, uh, with, with one question about a question, um, which is what is the top question you are being asked the most right now, Nina from your clients, Terry and Leila from the CEOs and founders that you back, and let's start with you, Nina. Are we in a bubble right now? Are we in an investing bubble, whether that's the markets more broadly or whether that's AI specifically? Yep, makes sense, Terry. Um, I often get, uh, do you invest in traditional seed rounds or the 2026 version of a seed round? And what is the 2026 version of a seed round? Much, much larger, you know, we're seeing $100 million dollar seeds and preseeds, and so founders are wondering as they are trying to assess investors which type of seed do you do? Mm, OK. And Leila, I'd say the most common question I get from CEOs is how can we move faster. I think the thing that's changed the most in the growth tech landscape over the past year or two is the speed at which companies are moving. So the top decile companies, we have many that have scaled to 100 million in ARR in under a year, whereas in the fast generation that would take 5 or 6 years for the very best companies. So everyone is focused on speed and how they can build the technology faster, how they can hire faster. how they can get to market faster. Yeah, excellent, and I'm gonna stick with Mina's bubble question because I'm sure you all get asked it every day, as Mina said, but I do have to ask because so many people right now are warning that this first wave of overfunded AI companies is gonna disappoint. They're scared about this bubble. Leila, you sit in the seat. You're writing some of the biggest checks in AI. What is your take on this supposed AI bubble we're in? Is it real? Is it not? Well, I think I'll start with the numbers because I think the numbers are astonishing. The, the last data point I saw was that expectations for Capex spilled out in 2028 top $1.5 trillion. And so when you look at that as a percentage of GDP, it's, it's, I think it's around 2.8%, which is Higher 2 times what it was during the telecom build out and higher than the average during the railroads, so good reason to be asking questions. I think when you talk to the builders of the technology and again the companies themselves that are fueled by AI, the business results are quite compelling. So this revenue growth that we're seeing, um, early signs of, of ROI both. Enterprise use cases as well as you know, further afield things like robotics, life sciences, the, the efficacy of the products and the excitement around adoption is unlike anything we've seen. So we, we see really great, um, you know, reasons to invest in the companies that we've backed are making real business traction, but the scope of the investment is very considerable. And I wanna come back to some of those investments in a bit, but Mino, for the client side, when clients come to you being very scared about an AI crash, what are you saying to, to talk to them about this? Yeah, so I would say the first thing is when you look at the public markets. There is, uh, a lot of support from evaluation perspective when you actually look at the underlying earnings, especially in large cap. And so when you look at, you know, the top 10 names in the S&P, um, the, the revenue and earnings generation is, is spectacular to Leyla's point, like to the extent I mean Capex is significant and it's, it's. Almost more than 100% of cash flow, but to the extent that they needed to, they could turn that off. And so I actually don't think in large cap public markets that we're in a bubble. I think it's actually, um, you know, these valuations are attractive relative to the amount of revenues and earnings. Um, I think the one, you know, the, the thing that's important. As we work through this market cycle, this economic cycle, whether it's in public markets or in private markets, is really to think about not trying to time any one market environment or vintage or cycle. And so to put a finer point on that, actually for our clients for their private portfolios, we actually take 5 years to invest their money to get to a strategic asset allocation. And that's across a venture growth buyout private credit, etc. um, but when you really think about being really disciplined from that perspective, it gives you more confidence that you're gonna be able to withstand any one economic or vintage cycle volatility. Excellent. And Leila, one more for you before I come to you, Terry, which is I, I wanna talk about one of those investments that you've been making. Um, one of your big bets is. In isomorphic labs, which for those that don't know it's a Google DeepMind spin-off that uses AI to design new drugs, just raised $2.1 billion but the drugs are not yet, um, in, in human trials. So I'm wondering if you talk to us a bit about, you know, when will someone in this room take a medicine that AI designed and what makes you willing to bet on something before there's an actual product involved. Yeah, I'm glad you asked that question because I think, um, one of, uh, many of the most exciting applications of AI in my opinion are in these industries outside of just, um, enterprise workflows and certainly outside of asking a chatbot questions and health life sciences health are probably the application most of us as humans are, are, are most excited about. So there are many steps on the path to getting a drug, as many of you in the room know that work in biotech and pharma, um, and it's quite easy to actually see the efficacy of models that are purposely built for drug discovery, which is what the, you know, the isomorphic team has been working on for many, many years. The founding team got a Nobel Prize for the. Um, the science they did around, uh, protein folding model. So this is many, many years in the making, and, um, I don't know the exact timeline of when there are the, the reality of AI is there is discovery and there is the, um, the technology milestones that we meet with the with the technology itself and then there are many human milestones like clinical trials and regulatory, um, work that needs to be done, but I believe that we'll continue to see promising. Releases in terms of of um the progress that the models are making in areas like life sciences also other areas in the real world like robotics autonomy you know Waymo is another big investment of ours. I think we'll see the impact of this technology in cities in urban design in health and um that's where some of the most exciting applications lie. I, I would just agree with. About 100% in terms of our perspective is what's gonna help the the intersection of healthcare and AI especially with life sciences in terms of new drug discovery as well as um more use cases for existing drugs um really you know sets up for uh a healthier you know economic environment as well as a global population. But also, um, it's the one area actually health care in general where we see that there's gonna be more labor force needed versus other sectors and so a lot of people also are worried about what's gonna happen from a jobs perspective and just given the amount of innovation and the amount of opportunity it's also an area just from a jobs perspective as well as from an investment perspective where we think AI could have a significant. Benefit and we could do a whole other panel on that and then I want to later but Terry, I first do wanna come to you because this is a stat that I think has been thrown out today already, but studies are showing that female founded startups generate more revenue per dollar raised, yet teams made up of only women get, you know, around 1% of US venture dollars last year. So why is no one taking the easy money and talk to us about what, what the problem is and what you're kind of doing to fix it. Yeah, I think that you know when you look at at the broader market we are seeing a lot of concentrated dollars and that means a lot of dollars are going into very few companies, a lot of dollars are going into very few sectors, and we're seeing this across a number of different asset classes, but of course we think a lot about venture and we're seeing this in venture in particular, um, when you look at. The way that companies are ultimately underwritten, particularly in private markets, uh, there's always this bias towards repeat founders, folks who have done this before, folks who have preexisting networks, and frankly I think that that's a fairly logical way of, of underwriting. There's actually been a, a, a number of statistics that have shown outcomes from repeat founders versus, uh, versus first time founders. But we all know what history looks like, right? And so if we continue to double down on the way things have been done, even though there are some opportunities for some great economic outcomes, we obviously will see these downstream impacts for female founders and other demographics. That makes sense. Um, I, I wanna talk to you about. To Mina, because I, I think you know women are projected to control $34 trillion in US assets by 202,030. Does that close the gap, or do women investors end up backing the same founders that men do? And, and what are you seeing? I would say that there's, um, there's a lot of talk about women, our female clients wanting to back female investors, call it 5, 10 years ago. I don't think there was a number of managers out there as there are now and I think that there wasn't the conviction level, but I would say there's really in the last 1-2 years been a little bit of a uh a change that we've started to witness and I think it's gonna continue to propel going forward as it relates to investing in I would say areas that are specific to um females and so like for example health care. Female health care, um, women's health care is an area where there is a lot of women that are passionate about that and are looking for ways and are investing with, um, with, with female DC managers because they tend to understand it. Right, that makes sense. Now Leila, one question for you and then I'm gonna turn to the room. So if you have a question over here, just raise your hand and someone will bring a microphone over to you. Um, but companies are taking longer than ever to go public right now. It's, for example, Leila, you led Stripe Series D back in 2016. Uh, 10 years later it's still not public, but now it's worth $159 billion. What does this mean for the venture ecosystem? Why are we in this place? Yeah, um, it's one of the, uh, you know, most profound changes I think in the capital markets between public and private investments just how long these, uh, particularly blue chip private companies have stayed private, um, and look, I think, um, the reality is every single CEO Stripe is a great example, um, will face the choice of whether building his or her company in the private markets or the public's markets is more beneficial to executing the strategy. And I think Stripe is a good example of um a company that has repeatedly said hey we are getting access to everything we need huge capital in the in the in the private markets to the tune of billions of dollars that no one expected they would be able to erase maybe you look maybe 10-12 years ago that amount of capital just wasn't available for private um private companies um and the benefits of being able to do that arguably for a lot of CEOs is that they can be much more innovative in the private. Markets they can take longer term bets they're not answering to quarterly, uh, earnings calls on shareholders asking about their capital allocation. They've been able to make massive acquisitions. So Stripe just bought another one of our companies, Open Router, uh, a couple weeks ago, um, so you see the things that traditionally were associated with being the benefits of being a public company like, uh, deep capital markets for, um, to build. Your investor base and to do acquisitions are now available in the private markets so you're seeing a lot of founders making that choice. Um, we will see if that continues. I think there are also a lot of benefits of going public. We have a lot of amazing, you know, public companies in our capital G portfolio. There's a lot of advantages, particularly if you sell into the enterprise, but there's also some real limitations in terms of ability to execute your strategy, especially. and rapidly changing markets and platform shifts like we're in right now so it's a trend that has been building steadily over the last couple of years and um if the capital keeps showing up in the private markets I don't really see it going away. I, I will add though and I, I don't know if this is um the case in your example Leila, but I do think that this is an increasing challenge and maybe divergence of um. Uh, incentives for both founders and for investors, you know, throughout venture capital history, the vast majority of dollars that were returned to LPs were through IPOs and so having public exits was something that was really, really helpful for private industry. Now what we're seeing, I, I can't remember the stat off the top of my head, but in the last two years, the number of secondaries and the, the total amount that is. Traded in secondary to something like way beyond what it's been throughout all of secondary history and that's really challenging for founders and for CEOs, right, because now you have markets that are trading on a company that you have no say or control over and so I think it's really interesting to see how this is going to play out over time because there are are both benefits and downsides for both investors and CEOs and I, I think the other thing just to add to the alternative investment landscape whether it's. You know what, how long it takes to go public is, is one point, but what you're seeing is that we, we actually recommend our clients have 30% of their assets roughly into alternative investments. And the reason why is what Leyla was saying about is that there's so much value creation. There's so much access to capital. The average company is staying uh private 11 years now. That's like almost double what it was, you know, a. A decade ago and so you want to be able to take place in that value creation. There's also so many more private companies outstanding than there are public companies, so your investable universe is more substantial. And then the other, the other point is that there is on the emotional side of investing when you see a portfolio that goes like this every day and when you have an alternatives portfolio that doesn't mark to market on a daily basis. It puts that emotional side to the side and encourages clients to stay invested and so it's one of the things where you know to the extent that you have access to alternatives you size it right in your portfolio I think there's a tremendous amount of value creation that can happen there absolutely and and maybe one thing I would just add to bridge that because I completely agree and I think um we talk about some of the biggest and the best private companies that have generated uh uh substantial. amount of the returns over the past decade. There's also the hundreds maybe even thousands of companies that have raised a lot of capital and the public markets aren't really open to them. They're either too small, they're not growing fast enough, their financial profile is not attractive enough, and in the landscape that we're in right now, both public and private investors are very focused on scaled assets. They're they're trying to understand a lot of complexity. You have, you know, pub public analysts that used to cover software names that are deep covering semis and hard tech and so to get the attention of investors you really need to be growing at much higher rates than you, uh, used to. So some people say you have to be growing at 30% plus for example to be a software company going public and so the window is open for a few but not necessarily open for many. Which is another dynamic that we see um as to you know why there are so many private companies that have to access the secondary markets and other things now because we're sadly winding down to our last few minutes, Terry, I'm gonna come back to you because one of the things I find most fascinating about, especially because you talk to a lot of Gen Z founders, a lot of, a lot of first time founders, um, a lot are bragging, you know, with AI, I don't need the amount of people in my company. I can build a company with one person. I don't need 30 people. Um, if that's true, do the best young founders even need to, to raise capital anymore? And what's your pitch to the ones who are deciding not to raise and saying, you know, AI can do it all for me? It's a really good question. Um, we, we hear this a lot, and it's our job as investors to try and determine what, what is marketing versus what is really true. Um, to Leila's point, not only are so many scale-ups doing. So at a much faster rate than ever in history they are doing it with much smaller teams than before in history and so I do think that there is truth to this claim. Um, the challenge though is if you are building a fundamental app layer or dev tool AI company, uh, you need compute and so that is a huge cost for a lot of these early stage companies. So even though that they're, they're smaller teams. They still need just as much if not more capital. Um, what happens over time as we see costs go down I think will be really interesting, um, to, to sort of see what it looks like for really small teams to build big businesses and in particular the cost basis that's gonna be needed for that over time. That makes sense. Well, thank you three so much. Thank you all for listening, uh, I appreciate it.