We Are So Back

Hey y’all — for the first time maybe ever, I took things a bit slower during the holidays this year (and bought a house!), but we are so back.

Also Tyler Denk and I still have a couple spots open for our founder retreat in Costa Rica next month.

We’ll be working, vibing, and going deep together with structured mastermind sessions. Other details:

• Everyone will have their own private room and bathroom

• Private chef and food are all included

• All activities are optional but included (surfing, yoga, private boat, in-house massages, etc).

• Dates: Wednesday February 25th to Sunday March 1st

• Cost: $10,000 (business write-off eligible).

Expect killer founders, mindset-shifting conversations, and good times.

Anyway, here’s today at a glance:

🔗 Houck’s Picks

My favorite finds of the week.

Fundraising

• Clive Butkow shares fundraising tips in the AI world (Link)

• Sophie Ann M. on what usually causes hesitation from investors (Link)

• Rohit Mittal on the importance of understanding valuations (Link)

• Stephane Nasser shares 12 deadly VC clauses to look out for (Link)

Growth

• Steven Cravotta on why you should stop using a soft paywall (Link)

• Peter Kazanjy on the best time to negotiate payment terms (Link)

ICYMI

• Get the AI agent certification built for founders — 50% off this month with code FOUNDER → (Link)*

• Jonny Boyarsky on how startup building is ignoring conventional wisdom (Link)

• Marc Randolph’s most important part of early-stage entrepreneurship (Link)

• Matt Shlosberg on why humans hate good ideas (Link)

💡 Opportunity: Automated Hotel Concierge Platform

2025 was the year we saw the LLM revolution move firmly into the application layer.

LLMs themselves, and building them, are in most cases no longer interesting (as I wrote about last February in “LLMs Are Over”) — what’s interesting is building a company that applies LLMs to a specific problem or vertical.

And the most interesting way to apply them is at a high leverage point that creates an interface layer governed by an AI that decides whether or not information is allowed to get through, and how it is presented once it does.

My belief is that these types of companies, which I call arbiters and defined extensively at the beginning of last year, will be where the biggest winners of this funding cycle emerge from — much like aggregators (Google, Facebook, Uber, etc) were for the last generation of the internet.

All of that is to say that one vertical without a clear arbiter winning the market yet is hotels, but they’re exactly the type of business that a good arbiter could significantly help every stakeholder in.

I’ll be writing a lot more about arbiters this year. Stay tuned.

🧠 Framework: L.E.K. Strategy Framework

What percentage of strategies are actually successful when implemented?

10% is probably a generous guess.

There are numerous reasons strategies fail, but an underdiscussed one is because the steps you’re outlining don’t fully connect to each other.

The L.E.K. strategy framework is a surprisingly simple (considering it comes from a consulting firm) approach to setting strategies that don’t leave gaps:

1. Start with clear goals → What’s the vision? The mission? The outcomes?

2. Figure out how to win → What makes you different? What does the market want? How will you get in front of them in the right way?

3. Configure yourself for success → What’s your operating model? Can you find the right talent? What about outside capital?

4. Hold people accountable → Who owns what? How will they communicate? What happens when failures occur? Set your priorities, targets, and budgets.

5. Get it done → Are you avoiding shiny object syndrome? How are you tracking progress?

Internalize this for yourself this year when you’re going after something new — it’ll keep your team aligned and moving.

📈 Trend: Non-Traditional Capital

Most people think that startups have to raise from VCs, but historically startups raise about 2x of what VCs raise in fund commitments — and in 2025 that shot up to an abnormal 5x.

Granted, when you reach the growth stages and beyond there are only a limited amount of capital allocators (mostly VCs) who are both well capitalized enough and willing to make a bet on a still-private startup.

But the gap has mostly, historically, been filled by two types of sources:

1. Non-traditional investors (for startups) — think crossover funds, corporate funds, and industry-specific strategic investors

2. High net worth individuals and family offices

This past year we saw another extreme figure that’s driving this trend — 40% of capital raised in 2025 was raised by just 10 companies. Think about all the mega rounds into OpenAI, Anthropic, and other AI companies that included massive checks from corporate interests like NVIDIA, etc.

Without those 10 companies, the ratio drops to roughly 3x.

That’s still above average, so there are clearly more investors making direct bets into AI startups than what they’ve traditionally done — putting LP checks into VC funds and delegating the actual capital allocation decisions.

💬 Quote: It’s Your Job To Believe

Say it with me: an investor’s lack of belief does not invalidate your own.

We’ve all heard the countless stories about how founders talked to hundreds of VCs, got a “no” every time, and then one person believed, or something clicked with the product, or some cultural event happened that changed people’s understanding of the market and those “no” answers started turning to “yes.”

That doesn’t mean you should be delusional — if things aren’t working and you don’t see a path to success, that’s one thing.

But the founder is the person who sees that path when no one else can yet.

That’s just what we sign up for.

So for 2026, think about what that path is for your startup. Adjust as you need to (a year is a lifetime). But stay the course.

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