Q1 2026 LETTER: Unbundling Outlaw 1.0

Good morning, and happy Holy Week.

Earlier this morning, I sent out the Q1 update for Outlaw to our early backers, and I have clipped the condensed version below.

The TL;DR:

P.S. This is a longer email and will probably get clipped by Gmail. Click the button above to read the full version online.

P.S.

I’m nearing the end of fundraising for fund I, and I am relieved to be spending the next several months focused on deployment instead of fundraising.

My next (probably final) close date will be May 31.

I will be sending out more info to a few people who have been closer to the process over the past several months. If you are interested in getting more involved, you can find time with me here or move to next steps through the link below.

Invest → Outlaw Ventures Fund 1, LP - Closing Pack

Thesis Unbundling

For the past ~year, the Outlaw thesis has evolved in our dialogue with the market.

There is a lot that goes into each of those statements, and over the past quarter, we have unpacked our internal thinking to sharpen our own reasoning and better justify our reason to exist as a firm.

Working backwards, this is how we think about narrowing and building the portfolio for fund I.

I. Artificial labor markets. Dropping inference costs has made it economically irrational to hire most entry-level white collar roles. If the TAM is labor markets, we are still in the early innings of discovering the true SOM for agents and other artificial forms of labor.

II. The token revolution. As the world shifts to become machine legible, every business is becomes a token factory either supplying, building, or orchestrating tokens (data, identity, money, expertise) that feed into different agentic work streams.

III. Software 3.0. Software 1.0 was built on handcrafted logic but constrained by human effort. Software 2.0 was built on earned systems and networks, trained on data, and scalable through compute instead of humans. Software 3.0 is generative, self-improving, and is able to dynamically solve for bottlenecks of the previous eras.

IV. The modernization of the private investment firm. We think the private markets in 2026 are at a similar inflection point as the traditional finance industry was in 1984. If you look under the hood at different funds today, you will see a massive gap in the sophistication of their workflows. Based on our experience, the best funds today operate more like software firms than traditional financial services businesses, and there is a high correlation between firms who have rebuilt modern workflows funds who have distributed capital + been able to raise fresh funds.

I. Labor decoupling and K-shaped economies. As the disconnect between asset appreciation and wages widens, we believe all roads lead to buying or building assets.

II. The Golden Age for builders. The lowered cost of starting a business, the tool stack available to non-technical builders, and the status that comes with starting a company has made it the best time in history to be a founder.

III. Everything is computer. Software at the world, and now the world is being rebuilt in software’s image. The value in software is moving up the stack from code → to deployment → to integration → to orchestration.

IV. GTM is the new engineering. As the value chain evolved, the most important hires within a business today became those solving complex problems within GTM.

V. Finance as culture. The financialization of everyday life is accelerating. Finance has become the dominant framework through which people understand value, make decisions, and interpret the world. A few sub-themes we are most interested in include finance as entertainment, independent media and the rise of the kingmaking, labor emulating capital, and the ownership economy.

I. The age of infinite leverage. Modern people can methodically apply, increase, and compound leverage until they stand on a mountain of levers - accomplishing 1,000x their peers, and the gap between the levered and the un-levered is going to keep growing.

II. Pareto, feast or famine, and the cruel mistress of power laws. In this asset class, very few companies are responsible for the bulk of returns. Very few people within those companies are responsible for the bulk of the decisions that led to scale. The secrets to scale are underpriced, they are not public, and very few people have them.

III. Out-of-distribution inputs → out-of-distribution outputs. We are in the business of finding out-of-distribution ideas, people, and companies.Understanding the companies that break the bell curve can be best understood by first understanding the DNA of the people who make decisions within the firm.

IV. Black Swan farming, vol of vol, and benefiting from chaos. As the world becomes increasingly extreme, venture as an asset class stands to benefit the most (buying the index becomes riskier, concentrated bets on variance become safer, options beat equity).

More on the actual founders that make up the portfolio can be found here.

We now share the ~30-page version of our thesis on our website for new visitors to understand how we think prior to a first meeting.

$5b Founders

Our goal with fund I is to own 1.5% of a $5b business with the following portfolio construction.

Our approach to finding a $5b business is to spend the bulk of our focus on first finding out-of-distribution individuals. We are extreme advocates of success begetting success and winners keeping on winning, and that is the core of our founder selection philosophy.

We define “out-of-distribution” as founders who have seen extreme success in a transferrable field. If you are looking at a normal distribution curve, we think of these types of founders as the right tail that is 3-4 standard deviations from the mean (exited founders, former Pareto employees at current Pareto companies, etc.).

Given how rare these types of businesses are, we think there is uncaptured opportunity in studying the $5b founders of the current era to to study patterns and find parallels for the next era of $5b founders.

We have created a roster of 71 founders who have built $5b+ software and technology businesses over the past 20 years. For each, we have built a repository of speeches, papers, memos, biographies, and other articles that help us get a sense of their story and frameworks for looking at the world. This will be a 14-part project with ~5 founders covered in each part.

The first two have been created below.

Investment Firm of the Future

Last week, we wrote an in-depth piece on building the investment firm of the future. It was was one of the top-performing newsletters we have written over the past six years.

In the piece, we break down down the history and future of venture capital into four eras in order to reasonably predict the future of the asset class.

When the VC industry first got started it was 20 people, all connected to Arthur Rock, a lot of whom were related. Investors were gatekeepers, all were monolithic brands, and the power dynamic favored them.

This was a world where seed rounds typically dilute 50%, companies went public within five years of company formation, and founders were regularly fired or pushed out for “professional” CEOs.

Pension funds began to touch the asset class, and the ‘70s were the first decade in which venture capital raised more than $1 billion. David Swensen took over the Yale Endowment in 1985 and pioneered a new form of portfolio management which encouraged an emphasis on alternatives.

Reaganomics created a golden era for private equity. Firms began staffing up and expanding focus and geography. The cottage industry of venture was quickly disappearing and being replaced by something much larger and more complex.

The dot-com bubble let the genie out of the bottle and created more good than bad for the industry. The gold rush of younger talent minted the next era of founders like Zuck, Elon, and TK.

An infinite stream governance-insensitive growth checks delayed the need for going public. The ‘99 repeal of Glass-Steagall eliminated the Four Horsemen investment banks which made it much harder for young companies to IPO.

Paul Graham and the YC mafia gives rise to our latest cast of emerging elite: the Collison brothers, Chesky, Sam Altman, and a roster of new Millennial founders.

Marc Benioff introduces the world to software-as-a-service, recurring revenue becomes the North star, and the factory model of venture capital solidifies. Cookie-cutter founders built cookie-cutter vertical SaaS companies with cookie-cutter playbooks as software ate the world. Venture sprawl happened vertically and horizontally, and the venture-fication of the world began to be felt by those inside and outside the asset class.

The monolithic brands of the previous era begin to acknowledge their own inability to be everything so they start to appoint nodes. Traditional celebrities, media heads, ex-operators, and spinoffs started funds, and capital abundance forced firms to compete against the “commoditized” capital label.

Venture today is where PE was 20 years ago.

The 2030s will be the first decade that sees the slowdown of the historic logarithmic growth in venture-backed outcomes.

While we’ll see hundred-billion IPOs become table stakes, it is highly unlikely we see a flock of $10t+ companies (1/3 size of US GDP) going public over the next decade.

In the grand scheme of things, none of this will matter, capital will continue to flood the venture asset class, underwriting baselines will grow to hundred-billion-dollar outcomes, and IRR compression will accelerate as inflowing capital outpaces exit scale growth.

The industry structure will consolidate to a few incumbent institutions and a long tail of boutiques. Incumbents will adopt a multi-asset model to escape the local return crunch. Surplus dollars will flow into tangent asset classes that traditionally belonged to LBO, credit, or public equities specialists as large-cap venture firms seek to diversify their revenue base by launching venture-relevant financial products.

The existential problem of modern venture capital is that it keeps chasing the finite game of increasingly competitive equity financing at the expense of the grand opportunity in front of it: becoming the main provider of financial products in the innovation economy.

The dominant venture franchise of 2075 will be a financial superstore - selling capital to those building the future, while offering capital products to everyone who wants exposure to that future. Asset class boundaries will continue to dissolve. The most successful firms will look like the best alternative asset managers of today: platforms that started in one product and methodically expanded into every adjacent financial need of their customer base.

The deepest competitive advantage in that future state is investor talent, and the single best indicator of where venture returns will concentrate in any given decade is where the top 1% of young principals and junior partners want to work.

The firm that attracts, develops, and retains the best investors at the earliest stage (not by paying them the most, but by giving them ownership, autonomy, and a platform to run their own book) compounds talent the way the best funds compound capital.

Build

Firms notoriously lose their identity as they scale. The better your ability to define the firm you want to be in the future, the better your ability to make the right decisions in the present.

I have written an ~8k word blueprint that goes into depth on:

If anybody wants to see it, has built something similar, or wants to jam on ideas / help us think through things, let me know.

Lessons From the Greats

Don Valentine taught me about ego death, maintaining common sense in a field of geniuses, and how to build a firm that outlasts you.

Michael Moritz taught me to value of orthogonal frameworks.

Doug Leone taught me to build a culture of winning.

Josh Kushner taught me about the value of conviction, how to maintain firm DNA through scale, and the alpha of hiring non-obvious investor talent.

Bill Gurley taught me about asymmetric regret and solving the principle-agent problem.

Bob Kagle taught me about venture firm flywheels and recruiting as the ultimate multiplier.

Fred Wilson taught me about the power of writing, how to develop a thesis, and the how to say “no” to more capital.

Marc Andreessen taught me about ambition.

Peter Thiel taught me what to ignore.

Brian Singerman gave me the best case for being a generalist.

Jeff Horing taught me the value of investor talent programs.

John Doerr taught me about execution and hubris.

Neil Mehta taught me about craftsmanship.

Micky Malka taught me about adaptability.

Pat Grady taught me to fear irrelevance over failure.

Graham Duncan taught me that talent is the best asset class.

Orlando Bravo taught me about finding great partners.

Steve Schwarzman taught me about pursuing financial opportunity.

Fund updates

I’m nearing the end of fundraising for fund I, and I am relieved to be spending the next several months focused on deployment instead of fundraising.

My next (probably final) close date will be May 31.

I will be sending out more info to a few people who have been closer to the process over the past several months. If you are interested in getting more involved, you can find next steps through the link below.

Invest → Outlaw Ventures Fund 1, LP - Closing Pack

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