At Terrain we actively debate what we'd do if we were running X firm or Y company. It can help us understand market psychology and anticipate what happens next.
If you run this exercise you might be surprised by what you come up with.
The world is waking up to the need for AI audits and insurance.
AIUC has already certified AI leaders like Cursor, Harvey, Lovable and ElevenLabs.
At @terraincap we backed them at Seed and doubled down in their Series A.
The Artificial Intelligence Underwriting Company has raised $55M to audit and insure frontier AI models.
Insurance produces audits the public can trust and understand. The mechanism is simple: insurers need audits to price the risk. They pick auditors they believe will help them price the risk most accurately. Insurers then turn the audits into a price signal that cuts through political debates. Insurers are aligned with the public: if they get the audits wrong, they go out of business. That’s different from today, where labs pick their own auditors, creating public distrust.
Insurance only works if we scale up auditing, and we are building the infrastructure to do that. Millions of agents are being deployed; they leave terabytes of traces and will create thousands of incidents across dozens of risk categories. To scale auditing, we need reliable agents to surface evidence traces for human review.
History guides us. Take cars: auto insurers funded crash tests to price risks; crash tests led us to airbags, lowering the risk. Take electricity: home insurers funded lightbulb tests to price fire risks; today, every lightbulb carries a safety mark. Nuclear safety works similarly.
We’ve been learning by doing.. In the last 6 months, we’ve audited and insured frontier agent builders like Cursor, ElevenLabs, Lovable and Harvey. For ElevenLabs to get the world’s first agent insurance coverage, a Lloyd’s of London insurer required quarterly technical audits by an auditor of the insurer’s choice. We’ve built infrastructure for quarterly technical audits of any agent, working alongside firms like Gray Swan (technical evaluations) and Schellman (audit).
In the coming weeks, we’ll share our vision for how an insurance ecosystem can work for the frontier, and open source the world’s first actuarial model for frontier AI catastrophic risk.
We’re hiring across all roles in San Francisco. Come do your life’s work with us.
Rune & Rajiv
There's a certain physicality to early stage investing that, with success, people often try to outgrow, outsource, or automate. It's always a trap. You have to love doing the work. There is no shortcut.
Eric Stromberg retweeted
This was crazy to watch unfold.
@naturalpay is sponsoring Something Big, and Khalil asked if he could pay through his agent.
It emailed mine, and the two of them handled the whole transfer (substantial $) themselves.
The whole thing happened in under five minutes.
Got to watch @mattshumer_ have his magic moment with @naturalpay last night. Really special
It can be incredibly hard to let people change. To see others for who they are now, instead of who they were when you met them.
This is a big reason great people leave jobs. To break from the past and grow. The same is true with raising kids. Letting people change takes effort.
Pains me to say as a lifelong basketball player who is terrible at tennis, but I’m starting to realize that tennis players are the best all around athletes in sports.
Between Seed and Series B, the best CEOs become almost entirely new people. The transformation can be jarring, but catching an early glimpse of who a founder might become and then watching it unfold is one of the most rewarding parts of early-stage investing.
Because this is true, you’re going to see a generation of investors who built their careers as sector, theme, or business model experts shift their focus to the one thing that is evergreen: understanding people.
Success as a seed investor requires you to deeply, deeply not care about being wrong.
That is hard enough to cultivate on an individual level, and requires extreme intentionality to have on team level.
Zipline is one of my favorite examples of a founder successfully navigating the idea maze over more than a decade.
It’s remarkable that what began as the playful product on the left became the futuristic product on the right.
My kids are 7, 7 and 3. In many ways, it feels like the golden age. As the parent of young kids, people tell you to cherish it because it goes fast. I’ve never known what to do with that advice.
The closest I’ve gotten is to be patient and take lots of videos, because you’ll want to hear their young voices.
But perhaps the best advice came from a mentor with adult children: “With kids, every age is the golden age.”
Eric Stromberg retweeted
New York City, we're here, and we're hiring. 🗽
Parallel is expanding its physical footprint with its first East Coast office in Gramercy Park, NYC.
This is only true if the market for talent is perfectly efficient, which it is not.
A core job of every founder is finding and developing unproven but excellent talent.
This is one of the many reasons startups are so positive sum: necessity forces you to bet on unproven people and accelerate their careers.
There is a very ugly truth that I think we are lying to ourselves about.
99% of startups today cannot even hire B-tier talent.
The might of Anthropic, OpenAI, and the hottest of hot companies are sucking up all the A*, A, and B talent.
Single greatest problem for every founder today is acquiring and retaining talent, without a doubt.
AI this, compute that.
All a distraction from the real breakout asset of this decade: Michael Jordan basketball cards.
There’s a set of emerging and established venture firms building in highly creative ways. Rethinking the core product and ways of working.
It's inspiring to watch.
Another set seems to be drawing linear paths from the past, just at increasing scale, in a way that feels like they’ve run out of ideas.
It’s not a zero-sum game. But as the two move further down increasingly different paths, this may prove to be the more interesting divide in venture capital than “big funds vs. small funds.”
People love to say they’re non-consensus investors.
But being non-consensus means being OK with your peers thinking you’re an idiot.
Not: “Wow, they see the world so differently.”
Instead: “Wow, they keep doing all the bad deals we passed on.”
Then you actually have to be right!
A beautiful thing when it works, but 10/10 difficulty.