Observed Signal · Jun 24, 2026 · Conference Panel · Source: techcrunch · Impact: 2/5 · Sentiment: Neutral
VCs Discuss Investing Amid Breakneck AI Growth
At TechCrunch’s StrictlyVC event in Los Angeles, investors Carter Reum (co‑founder, M13) and Chang Xu (partner, Basis Set Ventures) discussed how venture capitalists are pricing and selecting AI investments in a market moving unusually fast. They described the cycle as paradoxical — unprecedented revenue growth (e.g., ChatGPT, OpenArt) coexisting with the risk of overpricing — and outlined frameworks for defensibility: investing ‘below the AI’ (infrastructure for agents) versus ‘above the AI’ (applications with long-term differentiation), and distinguishing velocity markets (fast followers win) from depth markets (hard technical moats). They also discussed sector-specific moats (regulated industries, friction) and the local impact of major liquidity events such as the SpaceX IPO on the Los Angeles startup ecosystem.
Provides actionable VC perspectives and frameworks for evaluating AI startups and notes potential local liquidity effects, but it's commentary from an industry event rather than a platform policy, technical release, or major market-moving announcement.
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Key Takeaways & Evidence Grounding
- The conversation took place at TechCrunch’s StrictlyVC evening in El Segundo, Los Angeles.
- M13 co‑founder Carter Reum said M13 manages $2.5 billion in assets under management.
- Basis Set Ventures partner Chang Xu said the firm is investing out of its fourth fund with nearly $1 billion in assets under management.
- Basis Set’s portfolio company Open Art reportedly grew from $1 million to $10 million ARR in year one and from $10 million to $70 million in year two and was cash‑flow positive much of that time with about 20 people.
- Speakers described a trend of new infrastructure and teams building tools for AI 'agents' and noted a conceptual 'GitHub for agents' is emerging.
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