Capital Chronicles #26

Hello there! Welcome to Capital Chronicles, saving you hours every week with ~2-3 minute summarised insights from the best venture builders, investors and capital allocators out there.

As subscriber #TBD, read on for the latest…

🛠️ On venture building…

There are five essential characteristics of a good CEO (Roger Martin): not being wildly busy, spending more time with customers than shareholders, being loved by employees, explaining the company's strategy in under a minute, and recognizing that business is probabilistic, not deterministic. These characteristics indicate a CEO's ability to prioritize effectively, understand cause-and-effect relationships, foster a positive work culture, communicate clearly, and manage uncertainty.

Embrace these five CEO characteristics to increase the potential for a successful outcome.

🧭 On venture investing…

The agentic reasoning era has begun (Sequoia): a stabilising foundational layer and an emerging focus on enhancing AI's reasoning capabilities is paving the way for new agentic applications that can perform complex tasks with human-like reasoning. Entrepreneurs and investors should focus on building and investing in application layer companies creating value through innovative cognitive architectures and user interfaces that can deliver these new capabilities to end customers.

Identify promising opportunities using AI-enhanced reasoning capabilities to solve specific real-world problems.

📖 Learning resource…

Becoming more data-driven is essential for staying competitive in VC (Lukasz Karwacki): the future of VC is increasingly dependent on using data and technology to make informed investment decisions, particularly benefiting early-stage funds managing large data volumes. A successful transition requires a balanced approach combining off-the-shelf tools with proprietary software, strong leadership and tech talent, and a phased evolution tailored to each firm's specific goals, resources, and growth stage, underpinned by a robust data infrastructure.

Learn how to adopt a data-driven approach and gain a competitive edge in VC.

📊 Market insight…

AI enterprise adoption a top priority but still challenged (ICONIQ Growth): a survey of 215 enterprise CXOs reveals 88% of companies have approved budget for AI investment, allocating 10-15% of their software spend, expecting to increase 22% in 2025. However, new AI-native vendors face challenges entering the enterprise market due to preferences for existing vendors and tech incumbents. At the same time, enterprises also grapple with adoption barriers such as lack of expertise, data security concerns, and significant preparation costs averaging $75M.

Gain insight into the latest trends in AI spending among enterprises.

🎲Lucky dip essential reads…

• Do platform shifts produce infrastructure outcomes?

• You only need one thing to become great at venture capital

• Building a growth model to unlock international expansion

Share this edition and get access to…

• Full database: 300+ frameworks, market insights and learning resources powering Two by Two. Filterable and growing daily! (1 referral)

• Investment toolkit: tools, templates, and how-to guides to help you evaluate and analyse venture investments. (3 referrals)

Before you go…

• Hit reply and let me know what you liked (or didn’t) about this edition.

• Access the full Two by Two Playbook (subscribers only).

Have a great week!

Josh