Venture capital evolved from featuring savvy research analysts like Mary Meeker and Bill Gurley to people who can’t define FCF because technology companies (for better or worse) generally rewarded the latter over the last few decades. Consider the two big waves where VCs made most of their money in the last 15-20 years: mobile-first consumer social/internet and SaaS. Mobile/social companies operated in largely permissionless markets that inherently favored young founders, who naturally are not particularly financially sophisticated. SaaS markets, while they generally favored slightly older and more mature founders, similarly didn’t reward financial sophistication; product and GTM chops were far more important. Both internet and SaaS businesses ran relatively capital-light business models with high gross margins, which gave companies a lot of wiggle room. Financial optimization was just not a key driver of success. And these companies were all built against the backdrop of an enormous bull run and low interest rates post-GFC. Companies could generally raise cheap equity, and most felt like they just didn’t need to think too deeply about how to properly capitalize their businesses. Silicon Valley became a place where engineering/design/product/sales skills were rewarded and finance was not. “Wall Street” was looked down upon, and people who cared about finance were derided as being slow, bureaucratic, extractive, negative-sum, etc. These dynamics have obviously changed. The frontier AI labs are extraordinarily capital-intensive. Some of the hottest applied AI companies have negative gross margins, where optimization on that front over time will make or break their businesses. The asset-heavy aerospace/defense/industrial companies in El Segundo naturally require capital structure sophistication. Technology as a broad industry has matured, and many winning founders are no longer whimsical Stanford types who spent their summers writing code, but Wharton grads who cut their teeth at banks and buyout firms. And, whether companies will admit it or not, the equity capital markets are essentially shut for all but a very small handful of companies, whose success will now depend on their ability to think even slightly outside the box on capitalization. Finance is now a first-class citizen in Silicon Valley.