Notes from a GP (Feb. 2026)

“Over the past 20 years or so, 80 percent of the results were derived by 20% of the workers at the firm. In the future? It’s going to be 95% and 5%. If you were above average at 2-3 tasks, you just made 1-2 different roles at the firm redundant. Since you can use AI tools to get what you want (faster than asking those two average performers) there is no point in keeping them.”

“Mercenary pitches have tells. They're full of finance nouns: valuation, exit, multiple, comps. They describe customers as a route rather than a relationship. They frame the business like a trade they're executing.”

“Missionary founders structure their pitch differently. They light up when describing the problem, not the market size. Customer wins feel like personal victories. They talk about what their team built and how to support growth.”

“If your reputation is not riding on your fund, you have not risked enough to make it work. Many first-time managers I meet make the mistake that they want to somehow spare their reputation if their fund doesn't work out.”

“You should be tracking everything. Your discussions, your misses, use AI to record and analyze your pitch meetings. You should be reviewing what the biggest deals in the industry were, why they were successful, crystallizing theories about what succeeded and why. You should be studying the great investors before you and the profiles that made them successful.”

“Most investors don't bother. They basically "vibe invest." Their success often boils down to how lucky their network happens to make them. That might work for a while, but luck is not a strategy, and it doesn't compound the way that ruthless optimization does.”

“A badly managed company will eventually collapse or be outcompeted. But venture is a power law business, and usually only a few people are making that power law happen. So long as those few people are able to do their work, a VC can continue to survive even while being poorly managed. But being managed well is an edge in the long run. It allows you to retain your best talent and grow them beyond the original partners. VC firms famously suck at generational transfer and elevating existing talent, and partners are often terrified to hire juniors who are smarter than they are.”

“The trend is not your friend. Every cycle has a narrative that feels irresistible. A category that's so hot that every other pitch deck is about it, every conference panel is about it, and every LP is asking you about it. You will feel pressure--from your team, from your LPs, from Twitter--to pile into whatever the theme of the moment is. And every cycle, most of those themes turn out to be a waste of money.”

“But the flipside of trend following is that you inevitably end up with a portfolio of "what was popular 18 months ago," which is the single worst portfolio construction strategy imaginable. Your job is to invest in what will matter in 3 to 5 years, and hot markets are reliably incapable of thinking that far ahead.”

“VC is the business of branding money. You win a deal by convincing a founder that your money is better than someone else’s. In reality, everyone's money is green.”

“Fundraising is an art of its own, and it depends wildly on who you’re raising from. Fundraising from family offices is all about relationships. These are multigenerational wealth dynasties with their own idiosyncrasies, and it takes time to build trust with them. They are very social proof driven. Institutions and funds of funds are a different beast: process-driven, diligence-heavy, they are more won over by spreadsheets more than dinners. They want a track record, they want process, and they want to see a durable edge. You must learn to speak both languages to be a great fundraiser.”

“Taste comes to the party wearing Yohji Yamamoto pants and an OpenAI commercial-leadership-offsite Patagonia quarter-zip. Taste does drink, just a bit and sometimes more than a bit on weekends, but it does have a shockingly high VO2. Taste is a complete vision of what post-scarcity protein-heavy brunch looks like: shiny Accutane-and-GHK skin, emotions muted by insulin inhibitors and novel neurotoxic research chemicals.”

“Comically, investors are the most prone to groupthink. We are quick to recite talking points from the newest All-In Podcast or viral tweet. This happens in various echo chambers online and offline.”

“Bad information is worse than having no information.”

“Chronically online-ness creates echo chambers because instead of interacting with a more diverse cast of characters, the invisible hand of the algorithm selects for ideas that do well with the vector space that represents your online existence. That vector space also further determines who you interact with, selecting for people within your bubble.”

“Top Down investors have an exceptional ability to underwrite people. They intuit founder quality, ambition, and character better than the rest of the market, often through pattern recognition. Their mental model is built on prior exposure to high-caliber operators, so when they meet someone who rhymes with those archetypes, conviction forms quickly.”

“If you read biographies, you're a Top Down investor.”

“A Top Down investor should avoid investing via outreach.”

“A Top Down investor's highest conviction should be in the team, not the business.”

“Bottom Up investors, by contrast, excel at underwriting businesses. They perceive when a company's structure, incentives, or product mechanics echo successful precedents. They speak in terms of the "shape" of a business and the underlying logic that makes it work. In their algebra, company quality is the constant, and everything else (team, narrative, etc.) can flex around it.”

“If you prefer systems books (markets, networks, and history) you're Bottom Up.”

“A Bottom Up investor should not invest in referrals.”

“A Bottom Up investor's highest conviction should be in the business, not the team.”

“In the short run the markets are a voting machine; in the long run the markets are a weighing machine. Every company begins its journey in the voting phase and ends its journey in the weighing phase. For investors and entrepreneurs alike, it's essential to know which machine you're in.”

“When you lose the framework that ties your daily work to a moral account of the universe, that void does not stay empty. Something else fills the house. The finance industry of the 1980s and the 1990s built a culture that was actively hostile to answering this question. Leveraged buyouts hollowed out towns, mortgage products extracted maximum value from people who could not understand them. Compensation structures rewarded quarterly execution instead of decades-long stewardship. The people doing the work were produced by institutions that had systematically selected against the instinct to ask whether the work itself was good.”

“He staffed his business with what Alan Greenberg, the legendary Bear Stearns CEO, called PSDs—kids who were poor, smart, and had a deep desire to get rich.“

“He wanted his best people to feel like owners, and not in some motivational-poster sense. He wanted them to have equity. Partners weren’t given shares, however. They had to buy them. Seventy percent of a new partner’s earnings went toward purchasing their stake, which they typically paid off over three years. It kept them poor enough to stay focused.”

“Lemann never liked money sitting idle; it made people soft.”

“Sicupira, still CEO of Lojas Americanas, gave him advice: “You don’t know anything about beer, so for the first three years please don’t do anything dramatic. You’ll be wasting my money.” In his first 90 days, Telles fired 10% of the workforce, tore down the office’s walls, eliminated reserved parking spaces, closed the executive restaurant, and scrapped the executive-only bathrooms.”

“He applied similar logic to people, borrowing from Jack Welch at GE the principle that the bottom 10% of performers should be cut every year. He began showing up at universities before graduation, searching for talent. In 1990, Brahma launched its first trainee program. The average age of the workforce dropped from 48 to 32.”

“Those close to him describe something like a photographic memory—for people especially. Names, roles, prior positions, where someone came from and where they might go. Much of the talent now flowing into 3G arrives through his network.”

“Minority stakes cannot remake a culture.”

“Most of their net worth was tied up in shares, so they took out loans, cut their personal spending, and halved the size of their São Paulo office to reduce rent.”

“Put the physical restaurants in the hands of the best local operators who can run them better, and that’ll allow us to aggressively expand our business.”

 “He quickly noticed that in countries where Burger King was doing best, the story was the same. The restaurants were being run by a local entrepreneur who knew the market and could actually speak the language. So they built a structure around that. An entrepreneur would get exclusive rights to a country and commit to aggressive development targets. Burger King would take an equity stake, keeping a seat at the table without putting up its own capital.”

“To this day, Schwartz visits Harvard and Wharton and other top business schools every year. Before arriving, he requests the resume book, studies it, and cold-emails the students he wants to meet. No other firm does this, according to Tango. Alex Sloane, an HBS graduate, told me that Schwartz’s Burger King event was one of two standing-room-only talks. The other was Joshua Kushner’s Thrive presentation. Everyone else sent their HR person.” 

“3G’s structure makes this possible. Most private equity funds have 10-year lives. Managers raise capital, charge fees, sell their companies and move on. 3G has no such clock.“

“The firm has fewer than 30 people, including a dozen partners, nearly half of whom run companies full-time. Capital sits ready. Each fund holds a single company. The partners are the largest investors in every fund. Virtually all of them started as associates. When one is invited to join the partnership, they buy in at book value, the way Goldman Sachs and Blackstone operated before they went public and got rich selling equity to strangers. Ownership in 3G will not pass to the founders’ children. It will go to the people doing the work. Tango called 3G ‘the most unique private equity business model in the landscape today’.”

“The investors match the model: a small group of family partners, many among the wealthiest in the world, who think in decades rather than fund cycles, and who have no interest in seeing their names in print.”

“The goal is to return the original capital, then let compounding run for decades. A traditional fund with a limited time horizon cannot justify planting seeds in France or training a 25-year-old to run a company. 3G can.”

“The idea that it's hard to beat the market is mostly trotted out by money managers. What they really mean is that it's hard to do when you manage other people's money, because it's difficult to get paid for doing the obvious thing. I think it's substantially easier than most people think for the person solely running their own cash.”

“They want proprietary deal flow, but they also want to participate in hot rounds. They want the optionality of flexible capital, but they're operating within funds that still demand aggressive deployment periods. They're trying to manufacture value and mark that value to the same aggressive multiples that their peers would see in competitive deals, creating inflated NAVs that ultimately turn into deep value traps.”

“The largest venture firms are investment banks now. They rotate out partners, force LPs into various SKUs, run corporate-backed fund strategies, all in an effort to index/foie gras innovation as much as possible while placing hands on the scale of society as much as possible. The partner with 0 carry who sits on your board is your VP at the bank who sent you deck comments. The structure, incentives, and vibes are the same.”

“When the institutions are optimized to fund the legible thing and the individuals are optimized to build the legible thing, the identity of the founder itself fades. Being a founder used to carry with it the implication that you had seen something others hadn’t, that you were willing to be wrong in public about an unlikely future you believed in, and take a risk of banging your head against a wall with high career risk for a long time. Now it is almost eye-roll inducing in many non-tech circles as people struggle to distinguish Another Founder with Another Launch Video building Another (insert zeitgeist here) Startup.”

“The venture-backed startup path doesn’t have its 2008, but instead has has something more diffuse and possibly harder to reverse: cultural exhaustion.”

“The relationship between founders and their investors reflects a status shift too. Venture capitalists have been dehumanized. When firms were led by individuals with recognizable taste and conviction, founders treated allocation as something worth thinking about. Now the partners are interchangeable, the institutions behind them are interchangeable, and founders treat them accordingly. The brand halo that once justified giving a top firm a better price has been replaced by a simple question of who writes the biggest check at the highest valuation.”

“There are early cohorts of founders who will aim to find vibe-alignment with their capital. This is the bull case for more opinionated or smaller firms at the early-stage. I’m talking my own book here, but as the mission actually starts to matter again (not in the “wink-wink” sense), if a core value-add of VCs has been “brand halos”, then founders will align with investors that show an aesthetic they want to feed into their startup’s status signaling. The capital you take becomes a statement about who you are, and people will start to treat it that way.”

"People will stop building venture-backed businesses. The psyop that even though you have a data center of thousands of Nobel laureates (or engineers) at your fingertips for $200/month and some API credits you still need to raise tens of millions of dollars will start to degrade. This is a bit of a meme and I don’t think VC will die, but there might just be different distributions of outcomes or capital efficiency over time.”

Chief capitalist to out-of-distribution individuals.