#56 LP Email Updates, Insights: Getting Hit By The AI Lucky Truck @ Chapter One

Hi Everyone! 👋

Welcome to the new members of @TheFundCFO crew! Every M/W/F, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs and fund managers, #LP investors, and general industry enthusiasts/people who want to learn :).

LP, Investor Email Updates Matter - Tips, Tricks, Insights for VCs & CFOs

The email update is arguably the most important form of professional communication today! VC’s / fund finance pro’s request them from their portfolio. LP’s request them from VCs. If you master the email update, it can be highly efficient! You can message 10, 100, 1000 people all at once and let them know what's going on.

The best email updates are concise, data-driven, and have a clear why (why is this hitting my inbox?). Signature Block (How to write LP updates) and Elizabeth Yin (Hustle Fund) have previously written insightful posts on how to write LP updates.

Earlier this week, Jeff Morris Jr. at Chapter One shared a real LP update that went out to 100+ investors:

Getting Hit By The AI Lucky Truck (Excerpts from our Limited Partner Letter - Fund One, March 2023)

I highly recommend checking out this LP investor update via the link above. I included a few excerpts below (you’ll have to click through for the full read). Enjoy!

Getting Hit By The AI Lucky Truck

Excerpts from our Limited Partner Letter - Fund One, March 2023

I wanted to test the idea of “open sourcing” Chapter One limited partner letters because these notes often contain my most lucid thoughts about what is happening in technology.

The letter has been abbreviated to remove confidential information and provides an insider view on how AI is accelerating companies within our Fund One portfolio.

I will do my best to continue sharing “insider” content with you. I find this writing to be more interesting as a reader because it’s a peek behind the scenes. Hopefully you find these products interesting and give them a try.

Our first fund was a $9.2m solo GP effort which I invested starting in August 2019 over the course of two years. We had ~50 portfolio companies focused on a combination of consumer, infrastructure, and crypto.

The world changed dramatically during this fund and continues to evolve as the portfolio matures. We survived Covid, the bull market, the bear market, and are now in a banking crisis.

But AI is giving the startup world optimism. The best part is watching everyone tinker with software again, like we’re all stuck in a 1980’s Palo Alto garage. That garage is Twitter, where our timelines have become nerdy GPT-4 prompts. The moment feels very futuristic and nostalgic at the same time.

Yes, AI can be scary, but the feeling right now is innocent, like we all woke up on Christmas Day and opened a new toy at the same time. And with the gloomy macro situation, tech layoffs, and a chaotic world - we deserve this moment of fun.

Chapter One, Page One LPs:

I write a shorter and more conversational update this month, following the most chaotic weeks of many of our careers. You’ve already received the Silicon Valley Bank update, so I wanted to shift gears and update you on the Page One portfolio. Many of you have asked my thoughts on artificial intelligence in the past few months.

With the announcement of GPT-4 last week and no shortage of buzz in the media, rather than pontificate on the subject, I wanted to share a few AI-related developments in the Page One portfolio to help you understand how this is impacting the startup ecosystem. 

The companies in Page One who are effectively using AI today have spent years building amazing products. AI is supercharging growth and revenue, as consumers are eager to pay for AI at the application layer for products they already love. The common narrative right now is that AI value will accrue to OpenAI and big tech, but the less spoken narrative is that early to mid-stage startups applications are already seeing growth. 

For the most part, our portfolio companies who are seeing the benefits of AI advancements did not start with AI on day one, but rather as product organizations focused on solving problems for customers including engineers, designers, writers, and creatives.

Their early technical moat is not data, but rather that their core products and cult user bases cannot be easily replicated. As the well-justified AI hype cycle continues, we’re afforded a unique insight into the timeless power of strong products and moats that span beyond proprietary data sets.A few products from Page One that come to mind are Raycast (productivity software for developers), Tome (generative storytelling software that replaces Google Slides), Captions (auto subtitle and edit videos), Hyperwrite (write faster and sound smarter), and Viable (automated qualitative data analysis)

That’s all for today folks! Thanks for your support and spreading the word! Share this on Twitter or LinkedIn to help grow “the crew!”