With 90% less typos at renaissancecapitalist.beehiiv.com.
There are few people whose intellectual range impresses and inspires me more than Josh Wolfe, cofounder and managing partner of Lux Capital.
Lux Capital is arguably one of the most impactful venture firms that might've ever existed, which becomes less debatable every quarter.
Josh has a brain the size of a small galaxy and cojones the size of big planets.
So much of my own thinking, mental models, and worldview is essentially a remix of the polymaths and people I admire, where Josh's weighting rivals the Mag 7's market cap concentration.
Every quarter, Lux Capital drops its LP letters which read like intercepted transmissions from tomorrow's reality and will hit you right in the middle of your monobrow, and I let Josh know this one was no different.
Some gems from this one, themed “the Friction Frontier” - almost as much of a must read here as Josh is a must follow on X.
P.S.
Just touched down in NYC, making the rounds with friends, founders, and funds.
Writing this from Avi Flombaum's place - founder of Flatiron School (acquired by WeWork before its multiples met reality) which taught half of NYC tech to code, including some Palo Alto royalty like Jack Altman.
Last time I was here, Avi and I visited Josh at Lux HQ and drank directly from the firehose. Like the time arbitrage Lux employs in their investments, those insights are still years ahead of whatever X's main characters are (re)discovering today.
If you're in the city and want to discuss anything (besides why your startup's TAM is lying to both of us), please reach out.
VC Exits: the voluntary and the involuntary
Josh has been speaking about the “barbell of VC firms” for a while which was part of why we never raised a fund with “outside capital”.
It’s now coming to a head, with “the minnows” involuntarily exiting as “the megas” voluntarily exit by IPO - expect guys like General Catalyst to try front run the behemoths like a16z.
L&A (License + Acquihire) is the new M&A
Lux also mentions the resulting need for term sheets to include protections for orphaned equity, partial acquisitions, talent raids.
I’ve been thinking of it as 'non-key-man risk' to avoid a surgical extraction of your engineering team while leaving the cap table glowing like Chernobyl's elephant's foot.
Fun fact: when I was scaling Payapps (acq by Autodesk) from a decrepit LES loft, I structured our competitor's acquisition using a similar approach. But like the All-Sinners discovering SPACs existed before 2020, any structure requiring actual creativity takes geological time to penetrate Sand Hill Road.
“Frontier of agentic Al not defined by model size-but what we can verify”
Similar to themes from our last post on “The AI that is Seen, The Crypto that is Unseen”, AI’s agentic proliferation requires “a lot more than just silicon horsepower… but labeled nuance.”
“99% reliable agent degrades to 60.5% after 50 sequential decision tasks––each error cascading like cracks in glass”
One (ironic) way to prevent AI from devolving from MIT PhD to crypto influencer?
Supplementing it with human intelligence.
“The Friction Frontier”
Recent research shows that almost all cognitive biases boil down to a handful of fundamental beliefs coupled with confirmation bias - akin to a power law of cognitive biases or “One Bias to Rule Them All”.
In a similar way, every big idea eventually rams into the only laws that require no governance - what Lux calls the Friction Frontier.
The Friction Frontier “lies in mapping Al's metabolism finding where silicon speed meets carbon constraint…
…Al can dream up chip architectures in microseconds but TSMC's fabs run on geological time.
Al can generate perfect building blueprints, but concrete still cures at its own cadence.”
Remember to follow Josh on X for the firehose of insights he shoots out hourly, and if you feel like joining him follow me on X as well here.
Stay at the frontier,
Daniel
If you enjoyed this post or know someone who may find it useful, please share it and encourage them to subscribe here or at https://renaissancecapitalist.beehiiv.com/
WHO IS THE RENAISSANCE CAPITALIST?
Part adventure capitalist, part librarian — Daniel Attia is a (venture) investor & builder who writes in the third person and backs founders reinventing reality through preemptive.
(portfolio below)
His lens comes from a random sprint through high finance, startups, tech & media, venture, hedge funds, and the arts.
He mastered capitalism's grammar at Deutsche Bank and Goldman Sachs before being force fed its real-life principles as the first US hire at Payapps (acquired by Autodesk for ~$500M).
Daniel would later shape tech and market perspectives as founding Head of Research at Prof G Media, contributing to works like the NYT Bestseller "Adrift: America in 100 Charts."
His favorite capitalist pastime may be steering companies away from entropy toward rationalism (often mislabeled as "shareholder activism"), partnering with hedge funds, families, and shareholders who've grown weary of watching their capital fund executive delusions.
Today, he serves on the Foundation Council at the State Library of Victoria—the world's third busiest library—while moonlighting as consigliere to founders and CEOs at pivotal crossroads.
Daniel also serves as Special Advisor to VP Capital, a HK based hedge fund.
Daniel co-founded Pew Pew NYC, a non-profit art collective for the creatively curious
(which just unveiled Call me Lola in Mexico City, the first live-in art gallery hotel experience where 70% of art sales flow directly to artists!)
Select venture investments:
beehiiv (this very platform) – Because Tyler Denk always had Big Desk Energy
SymphonyOS – beehiiv for artists (Business Insider Top 13 Creator Startups to Watch, just like beehiiv. Led seed alongside Tyler too)
Harmonic Discovery – Precision pharmacology (JP Morgan Life Sciences Award winner)
Carry – Putting tax optimization on autopilot, built by Ankur Nagpal who turned his $250M exit lessons at 32 into your tax solution
Measured – Medicine minus middlemen led by dreamer and DREAMer immigrant Monji Dolon (seed with Initialized Capital)
True3d — Building livestreaming infrastructure for 3D by Meta livestreaming veteran Daniel Habib (still can’t believe we got an investor mention alongside YC founder Paul Graham)
EatBlueprint by Jeff Tang (now merged with Bryan Johnson’s Blueprint)
Atelier – Making manufacturing magnificent again (Co-led Series A with Macquarie Capital)