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YC believes it’s the Golden Age of Building. They’re incentivized to believe that, but still, we agree.

They released what areas are most interesting to them earlier this week, and we’re breaking down our thoughts below.

P.S. 💰 Are you a full-time investor AND do you want to get paid more?

Today’s highlights

  • YC’s request for startups

  • Founder vesting benchmarks

  • Forerunner raises a massive new fund

  • One thing to change how you think about money

TOP
Building szn 👷‍♂️

YC released its request for startups earlier this week, and a lot of the areas are not what you might expect.

Here’s where they’re seeing the most opportunity to build (and why) over the next few years:

Government software

  • Our country’s deficit is massive (and growing quickly)

  • AI is powerful enough now to automate many mundane tasks that the government wastes billions on each year

  • Elon, Vivek, and the Department of Government Efficiency will put more pressure on the government to become less bloated and adopt software before hiring more labor

Public safety technology

  • Advanced computer vision: Identifying suspicious activities or people in distress from video feeds, without compromising individual privacy.

  • Emergency response enhancements: Improving the speed and coordination of emergency responses are lifesavers.

  • Community safety tools: Improving how communities and law enforcement interact. Think Nextdoor but with more communication to law enforcement if necessary.

  • Efficient law enforcement technologies: Help law enforcement do their jobs more effectively and fairly (workload management, increasing accuracy in their operations, etc.).

Manufacture in the USA

  • Over the past 50 years, America has given up its role as the biggest workshop in the world, and we have outsourced this task to other developing nations

  • Hollowed out US manufacturing has led to social and political division, and bringing back American manufacturing is a bipartisan issue

  • ML-based robotics systems will make it possible to automate far more, which will reduce the cost-of-labor arbitrage that pushed manufacturing to other countries in the first place

Stablecoins 2.0

  • Stablecoin payment volumes have surged this year and are now over a fifth of Mastercard’s volume

  • Almost 30% of global remittances are now facilitated through stablecoins

  • Traditional finance institutions like Visa are offering platforms for banks to issue their own stablecoins

  • Stripe recently acquired a stablecoin startup, Bridge, for $1 billion, which will only attract more investor interest and capital into the space

LLMs for chip design

  • Each breakthrough in AI creates demand for more powerful chips to train larger models

  • Domestic chip design and manufacture is not just about economics anymore, it's about survival in a post AI world

Fintech 2.0

  • The SVB collapse feels like a distant memory, and investors are warming back up to the idea of fintech investing

  • There are structural advantage for a small startup without any legacy systems or processes to quickly build global financial products of the future

New space companies

  • The cost to reach orbit has dropped 10x since 2006 (SpaceX first launch)

  • If we are entering a future with access to space being as routine and inexpensive as commercial air travel, shipping or trucking… what new businesses does that unlock?

AI-aided engineering tools

  • Engineering tools have not evolved for several decades, but that is changing fast

  • With reasoning capabilities built into the new AI models that solve math and physics, we can unleash engineers to design and build physical systems faster and better than ever before

One million jobs 2.0

  • In the past, when massive technological change came about, people have ended up doing different types of work than they did in the past (machinery creating less farmers)

  • This could include tools for more people to run their own local businesses, or be able to earn a living by providing services to other humans either online or offline.

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HEADLINES

  • Forerunner, consumer tech VC that backed Warby Parker, Away, raises $500M Fund VII (Pitchbook)

  • SoftBank Vision Funds architect departs as funds log best gains in years (Pitchbook)

  • Altos Ventures, an early backer of Coupang and Roblox, raises $500M fund (TechCrunch)

  • Real Estate Startups Aren’t Seeing Much Love (Crunchbase)

  • Donald Trump Jr. Will Reportedly Join An Anti-ESG Venture Capital Firm Instead Of The White House—Here’s What We Know (Fortune)

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RECS

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Thanks for reading this far and giving us a little bit of your attention this week.

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RESULTS

Here are the results from our poll question in yesterday’s piece:

What percentage of VCs today would you guess have real company-building experience on their resume?

🟨🟨🟨⬜️⬜️⬜️ <10% (3)

🟩🟩🟩🟩🟩🟩 10-25% (6)

🟨🟨🟨🟨⬜️⬜️ 25-40% (4)

🟨🟨🟨⬜️⬜️⬜️ 40-60% (3)

🟨⬜️⬜️⬜️⬜️⬜️ >60% (2)

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