The Spotlight by Founders Capital - Edition 12

What We’re Reading

Bet on or Against the Unicorns - Bloomberg, Matt Leveine

Accessing or shorting private tech unicorns is difficult due to their illiquidity, but synthetic instruments like swaps and tokenisation offer a workaround. New products, such as RiverNorth’s long/short unicorn funds, let investors bet on indices of private companies without owning equity. While these bets don’t fund startups directly, they reflect growing demand for exposure, and speculation, in private markets.

Four reasons why private credit isn’t actually a systemic risk - Financial Times, Courtesy of Goldman Sachs

Goldman Sachs argues that private credit does not currently pose systemic risk, countering concerns raised by institutions like the IMF and Moody’s. They cite four key reasons: limited leverage, liquidity backstops rather than full drawdowns, minimal asset-liability mismatches, and senior secured loan structures. While risks could grow with scale, current exposures are largely contained and unlikely to destabilise the financial system.

Unicorns May Throw a Lifeline to Stock Analysts - Bloomberg, Marc Rubinstein,

Equity research is undergoing a quiet reinvention. As public markets shrink and unicorns now represent over $5 trillion in private value, Wall Street’s top research desks are pivoting toward private companies. With firms like JPMorgan and Citi launching private coverage and Robinhood experimenting with tokenised equity, a new revenue model may emerge, one where research on opaque, high-growth startups is once again essential, and analysts find relevance in the world of tokenisation and private market liquidity.

Must-Listen Podcasts

Pattern recognition and backing Europe’s next unicorns with Andrei Brasoveanu, Partner @ Accel - Riding Unicorns

Accel partner Andrei Brasoveanu shares how he went from math olympiads to high-frequency trading to backing unicorns like Celonis and Polar. He discusses trusting founders over metrics, Accel’s focus on non-obvious European talent, and how pattern recognition shapes great venture instincts. The episode also explores why technical founders have an edge and how strategic angel orchestration can drive early-stage success.

Balaji Srinivasan: How AI Will Change Politics, War, and Money - a16z Podcast

This a16z podcast with Erik Torenberg, Martin Casado, and Balaji Srinivasan explores how metaphors like “god,” “swarm,” and “oracle” shape our understanding of AI. Balaji contrasts monotheistic AGI visions with decentralised, polytheistic models, drawing on his crypto and ML background. The episode weaves through AI's technical limits, prompting, and the societal implications of distributed intelligence.

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.

Research & Resources

Generative AI VC Report - EY, August 2025

EY’s latest report reveals a generational shift in global venture flows. $49.2 billion was invested into Generative AI startups in H1 2025, already outpacing 2024’s full-year total. Despite a 13% drop in deal count, capital is consolidating into larger, later-stage rounds. The average mega-round size has tripled YoY, reaching $1.55 billion.

The U.S. remains dominant, capturing 97% of deal value, while Europe sees 23% of deal count but only 2% of funding. Six of the ten largest global venture deals this year went to GenAI companies, including OpenAI, Anthropic, xAI, and Databricks, signalling deep investor conviction in this space.

Agentic AI systems (those that perceive, decide, and act autonomously) are becoming a standout vertical, with applications in defence, enterprise automation, and compliance. Investors are favouring sector-specific, monetising AI platforms over exploratory R&D labs.

As mega-deals expand and early-stage capital tightens, EY notes a widening gulf in access. For platforms like Founders Capital, this bifurcation creates strategic entry points, combining flexibility and network-driven deal flow across both ends of the market.

Last week we asked you: Which of these trends do you think will matter most over the next 6 months?

The most popular response was: “(A) AI startups continue to absorb the lion’s share of funding”

Beyond the Boardroom

The Leadership Paradox: Why Radical Responsibility Is Your Superpower - Medium

This read reimagines leadership by extending responsibility beyond organisational outcomes into personal and family spaces. Through the author’s ORCA framework, it shows how leaders can: Own outcomes instead of assigning blame; Reframe the questions to focus on constructive possibilities and Build accountability systems and amplify learning from failures. It conveys how leaders who “own their stuff” create teams anchored in trust, innovation, and psychological safety.

Why Leaders Should Bring Their Best Self - Not Their Whole Self - to Work
Harvard Business Review, Tomas Chamorro-Premuzic

The modern obsession with authenticity, “bringing your whole self to work”, may be doing more harm than good at the leadership level. This article argues that great leadership isn't about raw transparency but disciplined curation. Power, when unchecked, amplifies toxic traits and blurs personal-professional boundaries. Backed by psychological research, Chamorro-Premuzic advocates for leaders to act more like method actors, projecting clarity, consistency, and emotional intelligence, rather than indulging in impulsive expression.

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