Dear VCs, Just Give Up (Michael Dempsey)
Dear VCs, Just Give Up (Michael Dempsey)
Author: Michael Dempsey (Compound) URL: https://mhdempsey.substack.com/p/dear-vcs-just-give-up Published: August 18, 2026 · announced in this tweet (“Do not pass go. Do not collect management fees. It is over.”) One-line: A deadpan open letter that lists every piece of 2026 venture-industry conventional wisdom as a reason for small funds to quit. The satire only lands in the final paragraph.
Summary
The essay is written as a resignation note to boutique VCs. Each paragraph presents a belief the industry treats as settled, stated with a straight face:
- Mega-funds are coming down to seed and will win every deal. Founders pick the brand, even when the partner leaves by the Series B.
- Only a handful of companies matter, and abundant intelligence means fewer of them. If you’re not in OpenAI, Anthropic, Anduril or the neolab of the moment, you’re irrelevant. Push your zombie portfolio to get acquired by them and pile in through SPVs.
- Move up to growth, where the winners are already obvious and the prices only look expensive.
- The best founders are the most legible: elite school, elite math competition, or a spin-out from an elite company. Everyone else is adverse selection.
- The best founders get the highest prices, and a sub-$10B fund can’t compete with cinematic podcasts, in-house media companies, super PACs and FBO memberships.
- The observable universe is known. Every GitHub contributor and dropout is already in someone’s CRM, so there are no unturned stones.
- Go all in on AI, and simultaneously assume AGI arrives in two to three years, so why raise a ten-year fund?
The turn. The sign-off offers “a lesson from our industry.” Technology supposedly teaches that incumbents crush upstarts, that slow tankers innovate, that money is the differentiator and that fortune favors conformity. Each of those is the opposite of venture’s actual history, which reveals the whole letter as irony. The real argument: when every consensus belief points toward giving up, the non-consensus, small-fund, unknown-universe bet is exactly where the opportunity sits. It’s signed by a “soon to be obsolete fund manager.”
Full text
Archived privately against link rot, with the post’s two images: ../attachments/dear-vcs-just-give-up/dear-vcs-just-give-up.md
Connections
- (New Essay) Dear VCs, Just… (tweet) — Dempsey’s announcement tweet (with two images from the post).
- Michael Dempsey — author; also wrote Company Building In The Curiosity Phase of AI.
- Go Big or Go Broke — The Middle Ground Is Gone (Ethan Kurzweil) — the same month’s sincere version of the argument Dempsey satirizes: capital concentrating into consensus trillion-dollar bets.
- Fund Size, Seed Investing and Emerging Managers — the small-fund position the essay pretends to abandon.
- Power Law and Non-Consensus — why concentration in “the 8 that matter” is the belief being mocked.
- Venture Capital