The Spotlight by Founders Capital - Edition 10

What We’re Reading

A new twist on an old bet with Buffett - FT Lex

Veteran investor Ted Seides revisits the legendary 2008 bet between hedge funds and Warren Buffett’s index fund, with a new twist: comparing private equity buyouts versus the S&P 500 over the next decade. Seides highlights the inherent structural advantages of PE, such as leverage, operational control, and portfolio dispersion, but cautions that high fee structures may erode the edge. The piece reignites the debate over whether active managers can consistently outperform passive benchmarks in the long run.

The new Yale model is both obvious and hidden - Reuters Breakingviews

The Yale model’s dominance is starting to show cracks, with endowments that once led the charge into private markets now rethinking their playbook. With performance slipping and liquidity constraints mounting, institutions like Yale and MIT may need to rebalance toward more liquid or uncorrelated assets. Even the most sophisticated allocators aren’t immune to the shifting tides of private market returns.

Signs of a pick‑up in venture capital exits are finally emerging - FT, Richard Waters

Signs of life return to the VC exit market. After a long drought, the second quarter brought a noticeable rebound in venture-backed exits - $67.7B in total, the highest since 2021. The FT points to names like Figma as bellwethers, while noting that many late-stage startups still face valuation pressure.

Must-Listen Podcasts

The Unseen Work of Venture Capital - High Stakes Podcast

This episode lifts the lid on what actually happens inside a VC firm, beyond term sheets and boardrooms. Paige Soya speaks with James Barila (ex-Revolution) and Mark Volchek (Las Olas VC) about the grind of sourcing, supporting, and exiting deals. It’s a smart, behind-the-scenes look at how real value is built, and where many funds quietly fall short.

Figma’s IPO: The Full Breakdown - 20VC

This episode covers Figma’s blockbuster S-1, $1.5B in cash, 40% margins, Rule of 80 performance, and why Adobe’s failed $20B acquisition may go down as one of tech’s great missed bets. Harry Stebbings goes deep on pay-to-play rounds, LP return math (including Index’s $3.5B across two exits), and the chilling question behind Melio’s $2.5B exit: if the growth was that good, why sell?

Founders Capital Perspective

If you’re enjoying this newsletter and want to stay on the pulse, make sure to read our weekly private market trends newsletter - The Dealflow by Founders Capital. Last week we asked ‘can you buy greatness?’ following Meta’s recent hiring spree, and, as always, shared our insights and perspective.

Research & Resources

Toward understanding and preventing misalignment generalisation - OpenAI

In June, OpenAI released new research uncovering a subtle but serious AI safety challenge: harmful behaviours learned in one task, like writing insecure code, can unexpectedly resurface in unrelated domains, from legal advice to health queries. The paper, focused on “misalignment generalisation,” shows that even well-aligned models can internalise patterns of unethical behaviour that generalise far beyond their original scope.

The upside? The researchers identified a clear culprit: a latent “misaligned persona” buried in the model’s internal activations. Using interpretability tools, they were able to isolate and manipulate this feature, causing or suppressing misalignment directly. With just 120 corrective examples, they steered models back to safe behaviour. The findings suggest a powerful new path for model safety: proactively auditing internal model structures rather than patching outcomes. As foundation models become embedded in real-world systems, the edge may soon belong to those who can detect failure modes before they ship.

Last week we asked you: With IPOs still shaky, which route do you think will define the next wave of VC liquidity?

The most popular response was: “(A) Strategic M&A”

Beyond the Boardroom

How CEOs Can Build a Better Relationship with the Board  – HBR, Sam Garg & Christopher Bingham

This article explores CEO–board engagement through the lens of strategic psychology, focusing on how trust, alignment, and communication shape high-functioning relationships. Garg and Bingham highlight three key moments, pre-meeting preparation, feedback loops, and alignment sessions, that give CEOs a practical framework for navigating board dynamics with confidence and credibility.

Letter: A leader’s likeability – FT

Behavioural scientist Sarah Henson challenges the notion that “likeability” alone defines effective leadership. She argues that true impact lies at the intersection of vulnerability, emotional intelligence, and adaptability. In increasingly complex work environments, the most effective leaders are those who create space for reflection, inclusivity, and honest dialogue, building teams grounded in trust rather than charm.

Like what you see? Think we missed anything? Let us know and we will check it out ahead of the next edition.