In his 2025 WTF VC report, Sam Lessin outlines how venture capital has fundamentally changed — and isn’t going back. The factory-model of standardized rounds, milestone-based markups, and predictable exits is gone. What replaces it is a fragmented, belief-driven, and deeply customized ecosystem, where narrative matters more than traction, and alignment with capital allocators outweighs traditional benchmarks.
Here’s a breakdown of what Sam means:
1. From Factory Line to Regatta
Startups no longer follow a clean, linear path from Seed to Series A, B, and C. Sam describes today’s environment as a “regatta” — founders raise opportunistically, adjust course often, and occasionally skip stages altogether. There’s no universal pricing mechanism. Instead, each raise is a custom trade between a founder’s story and an investor’s incentive.
In other words, everyone is a capital allocator now, and the rules are case-by-case.
2. The New Currency: Belief
Valuations today, Sam argues, are less about revenue and more about narrative. If you can tell a compelling story about infinite upside — especially in a meme-friendly way — you’re more likely to raise than someone with solid but unremarkable numbers.
This shift puts the spotlight on founders who can sell belief, not just deliver KPIs.
3. Founders Matter More Than Ever
Sam notes that generalist founders were good enough to scale SaaS tools in the previous cycle. But today, survival demands something more specific: missionary energy, resistance, deep domain expertise, and storytelling. Founders need both “rizz” (charisma) and “tizz” (relentless focus) to navigate a market that rewards conviction over optionality alone.
4. Deal Structure Is Strategy
As capital becomes more belief-driven and outcomes more binary, structuring deals correctly is a survival tactic. Sam emphasizes the importance of protecting downside — through clean terms, fair ownership, and liquidation preferences — while keeping upside optionality alive.
In this environment, how the deal is structured matters as much as the product itself.
5. Know Your LPs (and What They Want)
A key point Sam makes: LPs are no longer looking for the same things. Some want volatility-smoothed returns on paper; others want real liquidity. Some care about narratives, others about category exposure.
Founders and GPs alike need to understand who their capital comes from — and tailor what they’re offering accordingly.
6. What Still Works: Optionality + Protection
So what kinds of companies are still attractive? According to Sam:
- Businesses that could be massive (infinity optionality)
- But also have a downside cushion (revenues, assets, real usage)
- Led by founders with the right mix of storytelling and stamina
AI still has potential, he says, but only when it creates second-order value or powers something real — not just hype. GBOs (Good Boring Operators) and niche infrastructure plays are also compelling when backed by belief.
Conclusion: No More Playbooks
Sam’s central thesis is clear: VC in 2025 isn’t standardized anymore. It’s contextual. There’s no factory line — just a regatta of belief-driven trades, tailor-made strategies, and slow-burning conviction.
Winning in this market isn’t about pattern-matching. It’s about knowing who you’re talking to, what story you’re telling, and how you survive the long haul.
The line is gone. Welcome to the regatta.
Check out the full WTF VC report here — it’s genuinely worth the read.