Chris Lyons said something near the end of our conversation that I haven't stopped thinking about. We were talking about the companies that don't make it — the ones that struggle, that grind, that maybe never get to an exit — and he said the VC firms that show up anyway, that lay themselves on the line for those founders even when the numbers aren't moving, those are the ones that get the referral for the next great deal. Not the firm that was there for the home run. The firm that was there for the strikeout.
That sentence flips everything most people think they know about venture capital.
The common mental model is: find the next Uber, write the check, wait. The model Chris lives by is closer to: build a reputation as someone worth working with, and the next Uber comes to you. Those aren't the same business. The first one is asset allocation. The second one is service — genuine, unglamorous, no-guarantee service — and it happens to produce better returns than the first one when you do it long enough.
Chris is President of Web3 at Andreessen Horowitz — a16z, for anyone who doesn't track those abbreviations — and he founded the Culture Leadership Fund, which is one of the reasons I know him. We've been in deals together. We talk regularly. I've been on his speed dial and he's been on mine for years now, which means I've had access to a level of education most people don't get until after they've already made the expensive mistakes. This conversation was about making that education available to everyone who can't call Chris directly. That's most people.
The thing venture capital actually is
The simplest definition Chris gave: investing in ideas before they become businesses, and getting equity in return. Seed round, Series A, B, C — each stage is a different version of that same bet, placed at a different point on the founder's journey, with a different amount of evidence available to you.
What I think gets missed in that simple definition is the word equity. You're not lending. You're not buying a product. You're buying ownership — a small piece of something that, if it wins big, wins extremely big. The investment vehicle is designed around a specific math: most bets lose, a few break even, one or two return more than everything else combined. Chris called it the Babe Ruth strategy — most strikeouts in baseball history, most home runs in baseball history, those two facts live in the same guy's career. That's the mental model you have to carry into VC. You are not trying to bat .500. You are trying to hit the ball out of the park on the swings that connect, and not flinch at the ones that don't.
The implication of that math is counterintuitive: a fund batting .300 — three wins out of ten investments — isn't underperforming. It might be outperforming. If those three wins are the right three wins, they cover the seven losses and return the entire fund with room left over. Most people, including me when I was first getting into this space, have to consciously retrain their brains to stop flinching at the losses. The losses are part of the structure. The structure is designed around the losses.
Why the stage matters more than the number
Not all equity is equal. The check you write at the seed round is a completely different instrument than the check you write at Series B, even if the dollar amount is the same.
At the seed stage, Chris's phrase for it is the dream phase — there might be a prototype, there might be early traction, but you're often investing before there's real revenue. Which means you're not investing in numbers. You're investing in people. You're asking: has this founder's entire life, every detour and obsession and failure and pivot, led them to this specific problem in a way that makes them the uniquely right person to solve it? He called it the idea maze — how did you get here, and does the path you took through the maze make you someone who can actually navigate what's ahead?
That question sounds soft. It is not soft. I've seen people make seed-stage investments based on deck quality and lose everything, and I've seen people back a founder on feel and conviction and watch that bet return fifty times. The qualitative call at early stages is the whole job. By the time you're at Series B, you have data — you're doing a different kind of analysis. At seed, you're doing anthropology.
The other thing that's changed — and Chris was sharp on this — is that AI has compressed the distance between idea and viable company dramatically. WhatsApp had under 25 people when Facebook acquired it. Instagram had maybe a dozen. Those seemed like anomalies. They're increasingly becoming the baseline expectation. Small teams, small capital requirements, faster paths to either traction or failure. Which means investors get more shots on goal, and which means the bar for what counts as a differentiated bet has risen. You can't just find a competent team anymore. You need the team that is genuinely unreasonably positioned for this specific problem.
The deal you don't win doesn't teach you anything
There's a version of venture capital that looks, from the outside, like a club. You need connections. You need proximity. You need a warm introduction and the right zip code and the right school on your resume. Chris grew up partly in that world, and he's been honest with me about the parts that were real and the parts that were mythology.
The mythology: that the barrier to entry is credentials.
The reality: the barrier to entry is demonstrating, in advance, that you can identify something worth backing and that founders want to work with you.
He's seen people enter the VC ecosystem through Substack — building an audience by writing clearly about where industries are heading, and becoming someone that early-stage founders want on their cap table for the signal value alone. He's seen people build a track record by making introductions, connecting founders to other investors, showing that their network is real and warm rather than theoretical. He started his own career as a founder — working in music, building a startup, getting into an accelerator, expecting three months in San Francisco and spending eight and a half years there. The credential wasn't the entry point. The demonstrated edge was.
I think about that a lot in the context of how I approach deals now. I've been on both sides of this. I'm not a celebrity check writer — I don't want to be. I want to be useful to the founders I back in ways that are specific to what they actually need. That might be an introduction. It might be a conversation about how I think about brand. It might be just being someone who picks up the phone when things aren't going well, because that's when having a real investor matters versus a transactional one.
The Mercury investment is a good example. Chris got me into that deal around Series A, when it was a company most people hadn't heard of. I talked to the founder, understood what he was building, understood where it was trying to go, and I've stayed engaged since. That engagement isn't charity — it's how you learn, how you build relationships that compound, and honestly how you earn the right to be in the next deal that's equally competitive.
PULL QUOTE: "The best companies don't even need your support. But when you think about your reputation as a venture capital firm... the companies that went through the struggle that you laid yourself on the line for — those are gonna be the referrals that help get you that next great investment." — Chris Lyons
The cap table is the culture
The piece of this conversation I want to spend more time on — and we only scratched the surface — is what Chris is building with the Culture Leadership Fund and why the thesis behind it is more durable than it might look from the outside.
The argument isn't "athletes and entertainers can add value to startups because they're famous." That's the surface-level read, and it undersells what's actually happening. The argument is: Black culture has been the source of some of the most influential consumer trends of the last three decades — in music, in fashion, in language, in what gets marketed to whom and why — and the people who create that culture have historically been on the wrong end of the equity equation. They get paid for the endorsement. They don't get the cap table.
Chris's version of the fix: get cultural leaders access to equity before the companies go public, not after. Not as a diversity initiative, not as a PR move — as a strategic thesis. The companies that are building products aimed at consumers shaped by Black culture are going to have an actual edge if they have actual cultural leaders embedded from the beginning. Shared genius, is how Chris put it — two different kinds of expertise, two different ways of seeing the world, combined into something that neither could produce alone.
I've been a part of that thesis for years now. The reason it resonates with me isn't just financial. It's about who gets to own the next wave of what matters. Technology is where generational wealth is being created right now. If we're not at those tables early, we're endorsing the product after someone else owns it. I've been on the endorsement side. It's fine. The cap table side is different.
Three things I'm doing differently after this conversation
- I'm treating every VC investment I consider as a service commitment, not just a capital deployment. The check is the starting gun, not the finish line. Chris said it plainly and I want to internalize it more completely than I have: you're in a service industry. The question for every investment isn't just do I believe in this company — it's what specifically can I do for this founder that they can't easily get elsewhere, and am I actually committed to showing up to do it? If I can't answer that with something specific, I need to be honest with myself about whether I'm adding anything beyond the check.
- I'm paying closer attention to the idea maze at early stages — not the deck, the person. The deck is the costume. The person is the bet. How did they get to this specific problem? Is the path they took the kind of path that actually produces someone equipped to solve it? That's the question I want to be better at asking, and better at answering honestly, before I commit to a seed or early Series A. The expensive lesson most investors learn is that great-sounding ideas in the hands of the wrong founder don't become great companies. The inverse is also true.
- I'm taking the CLF thesis seriously as a long-term framework, not just a current investment. The cultural influence isn't going anywhere. The convergence of that influence with the technology sector is accelerating — Chris said it and I believe it — especially in AI, in music, in anything touching consumer identity. The window to get into those cap tables at the right moment is real, and it closes. The founders who are building companies at the intersection of culture and technology right now are the ones who will matter in ten years, and the investors who built relationships with them at the seed stage are the ones who'll have the returns and the reputation to show for it.
The last thing Chris said before we wrapped: look, it's literally just the modern day version of backing the next big thing before the rest of the world sees it.
That's it. That's the whole game. See it first. Show up fully. Earn the referral.