Venture Capital Crystal Ball: What 2026 Holds for Startups and Investors

The venture capital landscape is shifting fast and 2025 is proving to be a pivotal year for both investors and founders. From fluctuating interest rates to sector-specific surges in AI, climate tech, and biotech, the dynamics of deal flow, valuations, and exits are evolving in real time. In this panel, recorded live at Startup Boston Week 2025, industry experts break down what’s driving these changes and what they mean for startups and investors heading into 2026.

Featuring insights from:

• Vivjan Myrto - Managing Partner, Hyperplane

• Aaron Pressman - Reporter, The Boston Globe

Together, they explore the biggest trends shaping venture capital in 2025, how macroeconomic shifts are influencing funding and valuations, and which sectors are seeing the most growth and why. The discussion also dives into the new challenges founders face in today’s fundraising climate, along with predictions for the next wave of IPOs and M&A activity.

Whether you’re raising your next round, writing your first check, or tracking the pulse of the market, this conversation offers the insights you need to stay ahead of the curve.

Scroll down for key takeaways, and check out the full transcript at the bottom.  

5 Takeaways

1. We’re Entering Chapter Two of the AI Revolution

The first wave of AI (2019–2024) was all about foundational infrastructure - large language models, training data and compute power. The next chapter, starting in 2026, will focus on real-world applications of AI: highly verticalized, industry-specific solutions that solve tangible problems. Myrto predicts the rise of smaller, specialized language models that offer better privacy, domain depth, and real utility over generic LLMs.

2. Venture Cycles Are Resetting: Seed Is Resilient, Growth Is Tight

While growth-stage capital remains constrained, seed-stage investing has held steady, with strong deal flow and active deployment in AI and automation. However, valuations across the board have corrected - particularly post-2021 - and today’s investors are demanding stronger fundamentals: healthy margins, realistic growth rates, and cash flow visibility. Expect slower, more disciplined rounds in 2026, especially for Series B and C.

3. Boston’s Ecosystem Is Growing, but Capital Concentration Remains a Challenge

Boston is seeing more startups than ever emerging from universities and spinouts from companies like Toast, Klaviyo, and HubSpot, but capital remains concentrated on the West Coast. Myrto emphasized that Boston’s next big opportunity lies in corporate venture arms and local capital reinvestment to keep homegrown talent here. Fields like AI, robotics, fintech, defense tech, and biotech remain Boston’s strongest verticals.

4. The Next Frontier: Government, Defense, and Energy

Venture activity is expanding into sectors once considered too bureaucratic or slow-moving. Myrto sees massive potential in defense tech and government partnerships, noting faster DOD contracts and Boston’s edge through MIT’s Lincoln Lab and Draper. He also identified energy as the biggest long-term bottleneck in AI’s scalability - pointing to innovations like fusion power as critical to sustaining compute-heavy industries.

5. Diversity and Founder Obsession Are Still the Ultimate Differentiators

Myrto underscored the power of problem-obsessed founders over purely technical ones, those who persist through setbacks and build products grounded in real market pain. On diversity, he acknowledged the industry’s ongoing inequities - less than 3% of VC dollars go to women - and called for deeper inclusion across the ecosystem. True innovation, he said, comes from diverse perspectives and relentless execution.

Key Quote Highlights

All five of these quotes are direct paraphrases or lightly cleaned for readability from Vivjan Myrto’s actual remarks.

“We’re entering Chapter Two of the AI revolution - the era of real-world applications. The next big wins will come from vertical AI companies solving specific, tangible problems.”

“The market always goes through boom and bust cycles…chatbots, Web3, AI…but what never changes is that founders obsessed with solving a real problem will find a way to win.”

“Boston’s producing more startups than ever before - out of MIT, Harvard, Babson, Northeastern, but we need more capital staying here. More corporate venture funds, more reinvestment.”

“Energy is the real bottleneck for AI. Compute will get cheaper, talent will adapt, but without solving energy, we can’t scale the next generation of intelligent systems.”

“Diversity isn’t a nice-to-have, it’s what makes us better decision-makers. The industry is finally waking up to that, but we still have a long way to go.”

Parting Thoughts, Video & Transcript 

The conversation made one thing clear: Boston’s startup ecosystem is not just keeping pace with the changing venture landscape - it’s shaping it. From AI and automation to defense tech, fintech, and biotech, the city’s founders and investors are tackling some of the most complex challenges in the world with grit, intellect, and collaboration. As venture capital enters a new era of discipline, specialization, and global competition, Boston’s unique blend of academic rigor, entrepreneurial energy, and community spirit positions it to lead the next wave of innovation.

Full Transcript Below

Want to revisit a particular quote or share with a teammate? We’ve got you covered. Read the transcript here:  

Aaron  Pressman

[ 00:02:08,930 ] Thank you so much. I think it's a testament to the strength of the Boston startup scene that here we are after the whole week, at the end of a Friday, on a beautiful day, and we have a full room. I love it. Thank you all for being here.

Aaron  Pressman

[ 00:02:21,790 ] Vivjan and I are going to talk a little bit about the outlook for venture capital and a lot of entrepreneurial things, which I'm sure you're very interested in. But I thought I wanted to start with him. I don't know if you all know his background. Being in a startup is so much about your persistence, your grit, your effort. Vivian has an incredible life story. I just wanted you to share a little bit about, tell us about your growing up in Albania and how you got to this point.

Vivjan Myrto

[ 00:02:44,320 ] Yeah, and I also wanted to thank all the organizers, you know, Suffolk University. I think events like this talk about my background and sort of my story of how I came to be to Hyperplane. Know organizations like this and sponsors like Trinidad and Suffolk University and so on were very instrumental in me, too, growing up in the Boston tech scene. And most importantly, thank you all for being here. The happy hour is only an hour away. That's the good news. And more good news is that you're going to listen to us until then. But without further ado, my background here. With every entrepreneurial journey, the personal story, I think it's incredibly important. And it's something that we at Hyperplane look for a lot when we make our own investments. As Aaron mentioned, I grew up in Albania. I had my first company when I was seven years old, as my country was going from a very communist regime to a more capitalist society.

Vivjan Myrto

[ 00:03:47,360 ] I started to code when I was nine and built my first tech business when I was 13. By luck, my cousin started the first internet service provider in Albania. I was lucky enough to be the first salesperson there, started selling the internet door to door when I was about 14. Lack of habit. I got sick a couple years later and searching for better treatment led me to come into the United States. So I moved here in 2001, December 2001. In the Boston area, and spent about three years at Boston Children's, where I learned English, eventually surviving, and moving to WPI, where I was accepted for a pre-med program. And WPI was incredibly fortunate to fall back in love with engineering, fall back in love with entrepreneurship, and most importantly, start my first American company here, which was essentially what Epic System is today, an operating system for a lot of the hospitals here.

Vivjan Myrto

[ 00:04:54,740 ] We started Epic Systems for a lot of European hospitals. So we covered Germany, we covered Italy, and we covered France. About four years after starting that company, we sold it to a private equity group, made my first money through that, then started a second company, which managed not to lose all the capital that I made from my first business. And, you know, so many lessons in failure that I'm happy to. to answer later about that. And then Hyperplane is essentially my third company that I started in the United States. Hyperplane started with this crazy idea in 2013 where we made our first investment and launched the firm in 2015. And the crazy idea that we had from our previous companies was that one of the only ingredients that we saw missing for automation, for artificial intelligence, for machine learning, was really data, was computing power, and network speed. So we thought that those three really important ingredients were coming up to a point where we're just really ripe for a lot of the algorithms and a lot of the research that was sitting at MIT.

Vivjan Myrto

[ 00:06:05,980 ] and Harvard and Stanford and so on to really go into the real world. So MIT became one of the first, sorry, Hyperplane became one of the first dedicated seed funds to focus on artificial intelligence.

Vivjan Myrto

[ 00:06:22,090 ] On the deep tech side, but also more on the enterprise side. So this journey of mine is one that I'll summarize as being incredibly fortunate for the Boston area. It's one of resilience and one of a lot of luck, to be honest.

Aaron  Pressman

[ 00:06:38,430 ] I had to look it up. I'm not a math person, but hyperplane is, in fact, a term in machine learning about finding that match of the data that's going to bring you to the right answers. I'm curious. I was looking at some of the companies you've backed, like Indico. That's where Alec Radford, who's now one of the key people at OpenAI, started his business here in Boston. How, in the early days, how did you get the sense that this data-driven AI was going to be the next big thing. Yeah.

Vivjan Myrto

[ 00:07:09,810 ] And yes, on a, on a, hyperplane is a technical term in machine learning and, you know, on a, on a. On another note, it can be also FestPlane, which a lot of people think, which is still pretty cool. But Alec Redford was actually the person that wrote the paper that became ChetGPT. He was one of our first investments that we made here in the Boston area. And I think at the time, sort of the insight that we had was that a lot of the companies that we had started, myself and my two partners, we're really coming to a point where cloud computing really became just a little bit before you know artificial intelligence really coming out of this and you saw the cloud really grow from really not you know very very small to an incredibly powerful source of development for a lot of enterprise companies. And we thought the next evolution of that would really be, you know, a lot of this data that was sitting on cloud storage would really give rise to a lot of automation. Why automation?

Vivjan Myrto

[ 00:08:10,690 ] Our thesis was predicated on the idea that automation is really coming for the real world. So we look for a lot of companies that tend to be very vertical, you know, horizontal companies like JetGPT trying to do something for all kinds of different markets and industries. Whereas we specialize in, you know, artificial intelligence and most importantly automation, you know, for very you know specific use cases like a company called Ship, in which you know one of the One of the early founders of it is here in the audience as well, which really targets very specific applications. So for us, automation was a way to solve some of the largest problems that large industries were having. And that was really the catalyst for our thesis at the very beginning.

Aaron  Pressman

[ 00:08:58,480 ] It's too bad that we're talking about 2026 and you're an expert in AI, and we won't really be able to talk about it anymore, will we?

Aaron  Pressman

[ 00:09:05,620 ] But seriously.

Aaron  Pressman

[ 00:09:08,830 ] A lot of the companies in your portfolio have chosen all kinds of very specific problems, robots in warehouses or going through the sewage to find the markers for COVID-19, incredible, pointed specific missions. How do you sort through them? How do you deal with startups when they come to you with all these crazy different ideas? Yeah, that's a great question.

Vivjan Myrto

[ 00:09:35,310 ] So the way that we do it, and as we speak about venture capital as an industry generally, I think we're still in a stage where venture capital tends still to be a very boutique industry. You know, at the beginning when we started, it was a much smaller industry. It's gotten much larger as industries grow, like private equity in the 80s and investment banking also in the 70s and 80s. You know, our industry has also grown through an incredible growth over the past 10 years. You know, just to put it in perspective, when we started Hyperplane, you know, in the United States, there was about, you know, 6,000 full-time tech investors. You know, fast forward today, there's about 65,000 of them. And the assets under management for our own industry went from about $400 billion when we started our firm to about $1. 4 trillion today. So incredible growth. And with growth comes a lot of standardization. So a lot more people trying to do almost the same things. And AI certainly has leveled the playing field for everyone. Now everybody's in AI because it's the next super cycle and certainly being a venture you do really want to don't miss the next super cycle.

Vivjan Myrto

[ 00:10:38,610 ] So for us, like what we did at the very beginning, is that you know you know, just to say that we're, you know, just one flavor of a really large industry. And that's the way that we see the world. So we are very, very excited about markets and about people.

Vivjan Myrto

[ 00:10:55,230 ] Market is everything. So, within the market, the sewage company, for example, it's a company called Biobot. They essentially were the first company in the world to basically have a tiny sensor that goes into sewers to get health data. So, essentially, creating a whole new layer of health intelligence. So, during COVID, for example, we could see exactly where breakouts were happening, even by building. You know, today we can track things like influenza, we can track things like still like COVID, but we can track even things like serotonin. So, for example, one of our customers, EY, we have the sensors in their sewers in their headquarters in New York, and we can understand if the company is happy or not. You know, things like that, right? Serotonin levels in that. So for us, it's all about what is the actual problem? Who is the actual buyer? What are the sales cycles of that buyer? How do we get this technology? How do we get this idea? How do we make the vision of the founders really come to life and what market to really attack, so that's really important to us.

Vivjan Myrto

[ 00:12:02,010 ] One of the things that we also look We are, although we're very much AI, deep tech and all that, you know, we've always been very pragmatic about what technologies we use in our companies. So we are very much happy in the robotics world, for example, we have, at least, four companies in the robotics world that some of the fastest robotics companies in our portfolio are the ones actually that are borrowing as much as they can from open source models. Out there, also, other, you know, from the ecosystem, both from a hardware perspective, but also from a software perspective, so with a very specific use case that can make this company incredibly impactful to the industry that they're going so for us, it's always about market. And for founders, one of the most important things that we have learned over the past 20 years or so is: we are very drawn to founders that are absolutely obsessed with the problem that they're trying to solve.

Vivjan Myrto

[ 00:13:07,220 ] I think we all talk about founder market fit. We all talk about incredibly science-driven founders that have an incredible insight into technology. And although I think that's really incredibly powerful for companies, we have found, for our own portfolio, that problem-obsessed founders will get up on bed days, will keep going, and will really try to make their vision, most importantly, execute against the mission that they're set on. So I can give you multiple examples of companies that just struggled so hard for so many years. One of them, actually, is a Boston-based business here that started in 2016. We had no customers and we had to fire everyone by 2019 after raising almost $6 million.

Vivjan Myrto

[ 00:13:56,910 ] And because the founders absolutely obsessed, he would call me at night with, like, his pillow— even has like trucks and logistics and it's a freight company. And, you know, fast forward today, we have 3000, you know, customers over 200 million in revenue. Only because of his obsession, absolutely because of his obsession, and you know, maybe investors might take credit for it, but it was all him. So for us, markets and founders are incredibly important.

Aaron  Pressman

[ 00:14:23,830 ] There is sometimes a very long runway for a startup as we look towards this future, 2026.

Aaron  Pressman

[ 00:14:32,310 ] It's a very cyclical industry. There was a time in Boston a few years ago where my mailbox was filled with $100 million deals and $200 million deals. And then, as I'm sure you all know, the last two years or so, much smaller, much quieter. Seems like maybe the things are changing. Some of you know, fintech regulations have eased, and the Fed maybe is cutting rates. Do you, as you look forward to next year, what kind of part of the cycle do you think we might be in?

Vivjan Myrto

[ 00:15:00,370 ] Yeah, I think you know. Um, Another really great question. There's, you know, one way to answer it, I mean, two ways to answer it. It's like a little bit looking, you know, from the past, over the past, you know, five to ten years, even for shorter-term, and also trying to think about the next year, and most importantly, the next couple of years or so. if you look at, you know, venture capital generally, it's, you know, it's a constant boom and bust cycle, right from a technology perspective. I mean, even in our ten years of um having hyperplane off the ground, we've seen three boost boom and bust cycles. It was all about chatbots in 2017, and valuations were crazy. Everybody trying to get into them. And then it was all about Web3 and crypto and so on. So there's just always this boom and bust cycle. It's very intrinsic to our business. So it's always important to understand a little bit where the peak is. AI right now certainly is— taken all the money, right? If you look at, like, what is spent in venture capital in the Boston area, but also nationally, 90% of the capital is going towards AI companies.

Vivjan Myrto

[ 00:16:04,940 ] Right AI for you know, lawnmower, to you know, really large models like Anthropic and Andreal and so on. So, um, I think the past few years you've seen a very big, sharp decline, you know, in pretty much everything else, specifically, if you think about, you know, some hardware companies that can tend tends to have a little bit more capital intensity, much longer sales cycles, and so on. Um, and you've also seen, I think, also the the rise of money going towards much larger funds than ever before. Right. Over the past two years, particularly last year, 90% of all money raised from venture capital firms went into three firms, Andreessen, General Catalyst, and NEA. So, smaller firms have become much, much harder because returns have been much harder for. for folks like mine to attain, although returns are much more distributed than ever before because of that. So it's a bit of a chicken and egg. Now, if you think about where we are, this year was a little bit more positive because money went at seed stage a little bit more, but certainly was a lot harder to get at a growth stage.

Vivjan Myrto

[ 00:17:11,050 ] Because also what happened in the last few years is that the metrics changed. Because we had a retreat in 2022 with high interest rates rising, you know, you saw a lot of pullback from the whole industry of financing growth companies. So what really mattered was, you know, what was the runway? What is your margins, cash flow, all the fundamentals that are scrutinized in the public markets, all of a sudden became really important also in the growth stage. So a lot of companies that were a little bit ahead of themselves in terms of valuation really had a hard time raising so capital. Really dried at the growth stage. Although at the seed stage, we've seen a pretty much very constant deployment of capital, if not even higher than it used to be. So, if you look into 2026, I think that there's a high probability that interest rates are going to go down by 25 basis points on September 17th.

Vivjan Myrto

[ 00:18:13,470 ] I think that does not impact us as much, I think, particularly at the growth stage. However, there are certain areas that are going to impact it. Like there's a lot of AI in real estate, for example, that's going to be. A lot more interesting to look at all of a sudden because spend from consumers is going to go up and so on so um I think that is still going to see in 2026 a lot of retreat and a lot of slow slow rounds particularly the growth rounds I think on the seed stage, I think you're still going to see quite a bit of money deployed towards AI, but you're also going to see some new areas where that money is going to deploy. And I think most importantly, we're entering sort of chapter two of this AI revolution that we've all been part of for the last few years. And I think this chapter two is going to be a lot more predicated on real world applications of AI. Chapter one was about building the foundational parts of AI, so the LLMs, the models that we can all use now.

Vivjan Myrto

[ 00:19:14,290 ] And I believe that the next few years are going to be, you're going to see a rise of companies that are a lot more vertical, you know, really attacking certain markets and have a lot more real world use cases.

Vivjan Myrto

[ 00:19:26,470 ] On the girl's side, I think it's still going to be subdued. I think it's still going to be harder than ever to raise your series B or to raise your series C, as the stakes of being a top decile startup in the United States have gone way up over the past couple of years. Now, if you look at that sort of more national, if you look at the Boston area specifically, I think that there's been a good and a bad. Boston has been it's been it's been a it's very dear to my heart, number one. But also the academic institutions here are producing a lot more companies. I think when we started the Harvard Innovation Lab, for example, was literally just five chairs and one table. Fast forward today, it's three different buildings. So just so much more effort and so much more focus into commercializing companies out of MIT, Babson, and so on. So although we've seen a lot more companies, a rising number, an increasing percentage of these companies that are starting in the Boston area are leaving Boston more so than ever before because capital has been concentrated over the past two years so much more on the West Coast.

Vivjan Myrto

[ 00:20:34,710 ] At seed, at growth, and so on. So unfortunately, not as much capital in the Boston area here. However, a much bigger number of companies that are starting here. A great example of that would be Cursor, for example, where it started at MIT here. And, you know, today is worth, I think, 10, 15 billion dollars within a matter of a couple of years. So, so much more companies like that, I think, coming here in the Boston area.

Aaron  Pressman

[ 00:21:00,679 ] Another historical strength of the Boston area has been all the defense contracting work that was done here. And in the new administration, there is a lot of talk of maybe more investing in startups for the defense sector. I think I saw that one of your startups did have a contract with the U. S. Space Command. Is there more of an opportunity for... companies that have some military applications, maybe a dual use type of application?

Vivjan Myrto

[ 00:21:26,040 ] Yeah, absolutely. I think some of the things that really, I mean, if you're looking for a government tech company, I think there's a couple of places here in Boston, like the Lincoln Lab at MIT, or even Draper Lab. That are absolutely incredible. And they're always really giving rise and spinning out incredible companies. And we'd be fortunate to invest in three of them, both one out of Lincoln and two out of Draper. This specific company that Aaron mentioned, Integrate Space, they recently won a $25 million contract with the US Space Force. It was the fastest contract. You know, ever to be awarded to a private company, uh, from the DOD, and what makes that, uh, why they, why I mentioned that is because I think we've seen, also, from the DOD, you know, spent, now, there is almost a trillion dollars— i think surpassing trillion dollars— you've seen, incredibly more appetite from the government to actually expedite a lot of these contracts, which are so essential, you know, for companies like mine that need this capital in terms of revenue, in terms of grants, you know, to really grow. Because the money dries up quite fast if you don't have, you know, proof points, you know, to raise from the venture community.

Vivjan Myrto

[ 00:22:31,510 ] So the DOD certainly becomes a lot more open, a lot more. Willing to really, you know, invest in companies like mine and buy the products that we are investing in. So I think the government is going to be an incredible space, you know, to invest over the next, you know, five to 10 years. And I think Boston specifically. I think has a really natural advantage when it comes to that, given the great institutions that we have here and the labs that we have here. And most important, the talent. Boston, I would say that there are certain areas that are incredibly strong here. Government is one of them. Robotics is another. And believe it or not, fintech is also really strong. And also biotech and healthcare will always be Boston's, you know, sort of natural advantage.

Aaron  Pressman

[ 00:23:13,190 ] Talk a little bit about FinTech, because this was an area where, for good reason, there was a real government crackdown on Sam Bankman-Fried and those types. But now we have a very different outlook from Washington. And it seems like a lot of new startups are thinking about this area once again. How does FinTech look to you? Yeah, I think so.

Vivjan Myrto

[ 00:23:35,040 ] I wish my wife was here because she's the fintech guru in my house. But fintech in the Boston area here, I think it's, you know, like everything else, it's a little bit understated how good it is. Um, there's incredible companies both on, like, really large cast companies, like Stay Street, you know, which control an incredible part of the fintech world and that industry, but most importantly, there's also like smaller companies, like Flywire, and so on, that are publicly traded businesses that have given rise to an incredible talent. We've invested historically in the fintech area, both Boston and outside. But I think, you know, what's happening in fintech generally, I think with artificial intelligence, it's just opening up a whole new world of opportunities. You know, from small banks to larger banks to mid-sized banks in all sorts of ways. Like to give you an example, one of our company here in the Boston area spun out of the Eastern Bank Lab. For those of you who don't know, Eastern Bank has sort of a startup lab here that always thinks about you know fintech innovation. So if you're interested in fintech innovation, highly suggest to reach out to them or get in touch with them because they're always thinking about new companies to start there.

Vivjan Myrto

[ 00:24:42,780 ] One of my companies that we invested helped incubate there. We basically what we did is that we automated a lot of like sort of post loan closing. We also automated a lot of the closing process as well. So, if you were to get a small business loan in the United States, usually you go to an analyst and you go to a loan officer, and they can take, you know, sometimes weeks. We did that whole process. We reduce it to about 30 minutes. Or so to get approved. The rates of approval went up, but most importantly, servicing that loan is really really important to banks, particularly small-sized banks, which they don't have—um, you know, they don't have—uh— you know, the workforce that JPMorgan has. That is a really interesting example of something very specific within the bank that was really easily solved by automation and by artificial intelligence in the Boston area here. The company was eventually acquired by Moody's, now part of Moody's, and is really growing quite a bit here within Moody's. I think in the Boston area, you're going to see a lot more— sort of this more vertical fintech companies here. And another great organization here, the Fintech Sandbox, I think that probably organized a couple of events for the...

Vivjan Myrto

[ 00:25:45,650 ] For the week here, that's another one. It's it's it's a national leader, I think, in the fintech world. So there's certain pockets here that are incredibly well set up. I think to really spot out the next generation of really good tech companies, fintech companies.

Aaron  Pressman

[ 00:26:00,450 ] All right, we're going to come to the audience soon for questions, so be thinking of your questions for Vivian. The last area I wanted to ask you about for next year, as an opportunity, is going back to your roots, which is health care. Obviously, the Boston area has incredible institutions in the health care field. And also academically, is that an area that you think for next year that investors might be interested in new startups there?

Vivjan Myrto

[ 00:26:26,790 ] Yeah, I think that.

Vivjan Myrto

[ 00:26:30,400 ] So healthcare, like I think on the digital healthcare side, so digital healthcare, meaning, you know, companies that are helping existing healthcare organizations like hospitals and so on. And then there's the bio side as well. You know, Hyperplane has been investing a little bit in both. For example, we have a company in Toronto that It's essentially becoming the operating system now for a lot of pharmacies within hospitals of how they fulfill orders, how they keep in touch. It's a really huge problem for hospitals. I think the Boston area here is probably one of the best places in the world, you know, to start both a digital but also a bio company. On the bio side, like drug discovery or however you're dealing with data within big biotechs and so on. And the simple reason is that you have all the customers. You always want to be where your customers are. And if you're starting a healthcare company, again, both on the digital side and also on the more deep tech/ slash biotech side, Boston is one of the best places in the world for that. So we've always been interested in it.

Vivjan Myrto

[ 00:27:31,440 ] I think it's been incredible to see also other... you know, venture firms like Pillar and Flagship and so on to really set really big roots, most importantly, capital in the Boston area here to build these companies from scratch. Like Third Rock Ventures is absolutely one of the best firms in the world that spins out their own biotechs. And I think you're going to see both. I think you're going to see Flagship, you know, sort of doubling down on their core business, which is to start the next, you know, Vertex or to start the next Moderna. But you're also going to see, I think, the rise of a lot of companies that are spinning out, out of Flagship and so on, and out of Vertex and out of Moderna that are starting. uh you know ai companies to address the largest problems that biotech has biotech historically has been incredibly hard for startups you know to sell into because we the startup world we sort of live in a more recurring revenue model and that recurring revenue model has been very hard you know for biotechs

Vivjan Myrto

[ 00:28:35,220 ] to actually buy and adopt to But there's certainly change now where it's a lot sales cycles have become much faster for biotech. And there's certainly been a lot more open, you know, to take products that we're investing in, adopt them in their workflows. So I think you're going to see continuing rising of biotechs really buying a lot more software and really buying software to the business models that really make sense for for us to invest in and that what we're used to as well. So I think that's going to be a trend that is going to change the way that we all live. And I think it's going to change certainly, I think, also the Boston area quite a bit.

Aaron  Pressman

[ 00:29:13,480 ] Those big public biotech companies like Moderna, that's reminding me of another question I wanted to ask you. Obviously, one of the advantages the West Coast has is all those giant tech companies that are based out there. But now in the last few years, we've started to see some really strong companies here, HubSpot, Klaviyo, Toast, others. Do you think that that will start to also help support the startup economy?

Vivjan Myrto

[ 00:29:35,210 ] Yeah, absolutely. So as I mentioned earlier, over the past 10 years that we've been operating, we've seen a really big...

Vivjan Myrto

[ 00:29:42,750 ] A much bigger number of spin-outs is coming out of academia. MIT, Babson, Harvard, Northeastern, and so on. That number has been rising. WPI. WPI, where I'm from.

Vivjan Myrto

[ 00:29:58,230 ] That number has been rising because, you know, entrepreneurship has been such an integral part of their programs. And so, most importantly, here in the Boston area, there was this big mentality shift, I think, about six, seven years ago. You know, where we just really we started to focus more on commercialization of a lot of the research, but most importantly, also give the infrastructure for a lot of students, both grad and undergrad, to really build their companies and build. So that's been an incredible thing to see in Boston. Now, on the other side, what we already have seen as well is that we've also seen an incredible, you know, we've seen a rise in the numbers of companies that are spinning out of public companies like that. So that's been actually a surprise to us a little bit because we didn't anticipate it. You know, we knew that there's really big companies here. But certainly, like the new companies that have gone public, like, you know, Klaviyo more recently and so on, you know, Cargurus and so on. These companies now are spinning out so many more companies that we've ever seen before. So on both the academic side and also on the private side, we see a much, much larger number of companies being born in these companies and really starting.

Vivjan Myrto

[ 00:31:05,750 ] So the ecosystem on both ends is healthier than we have ever seen it, although we've only been around for...

Vivjan Myrto

[ 00:31:13,200 ] myself in the tech system for about 20 years, but we see both now a lot more. What I think should be done more, I think that Toast and Klaviyo and so on should certainly put more money into the ecosystem. The only ingredient I think...

Vivjan Myrto

[ 00:31:33,130 ] I think that the only ingredient really missing from having this ecosystem a lot wealthier. Thank you. I have a powerful voice inside.

Vivjan Myrto

[ 00:31:45,550 ] I think that the only ingredient really missing here is certainly more capital. West Coast has benefited incredibly much from these large organizations having their own corporate venture capital arms. Which essentially is just basically outsourcing their R &D by investing in a lot of these companies. Boston does not have a lot of corporate venture capital, you know, and that's something that is still missing in the community here that, you know, we've been pushing with all of the leaders of this organization to just put more money into the system. Wayfair started one, DraftKings has one, now Hotspot has one, and I hope that we're going to see a lot more of that.

Aaron  Pressman

[ 00:32:25,620 ] Could be very promising.

Aaron  Pressman

[ 00:32:27,480 ] Before we go to the questions, my last question for you is: certainly academia and the private sector have a role, but also there's the state government and the local governments that we have a new AI initiative in Massachusetts that's supposed to be $100 million. I'm curious if you think, and it certainly worked for biotech, I think. Do you think that that will be important? And should startups be thinking about how maybe they could get some money out of that too?

Vivjan Myrto

[ 00:32:51,810 ] I think just in the startup world, the most important thing is execution. And certainly that remains true for a lot of these initiatives from the government. I do think that the execution has been much better than the past. And I think it's also very encouraging to see Eric Paley become now the Secretary for Economic Development in Massachusetts. So I think Massachusetts certainly...

Vivjan Myrto

[ 00:33:16,350 ] It's putting a lot of efforts and it's an incredible thing to see from the local government to do that. I think, you know, for us, where we stand in sort of the seed stage in Series A, it's also really important to have other constituents—like MESPRIM— really, you know, from the public side to participate. For example, is the big gorilla. You know, here, which controls an incredible amount of money. You know, by them investing in funds or by them investing in startups directly, I think they can contribute an incredible amount to the community here as well. So I think that's the state pension fund, which has tens of billions of dollars. It's the mass premium, exactly the state pension fund. It's about 120 billion AUM. Pretty large. It's one of the largest, actually, in the United States. And, you know, where do venture capital funds like mine take the money? We take them from this sort of. Funds, endowments, wealth, individuals, pension funds, and so on. So there's part of the public side that's still not as involved as others, but it's an incredible thing to start the conversation. So that initiative, I think, will be a great thing for Boston.

Vivjan Myrto

[ 00:34:18,580 ] And I hope it continues.

Aaron  Pressman

[ 00:34:20,530 ] I think I see Elena starting to get up with her microphone. So if there are questions out in the audience, oh, there's a lot. OK, let's start with right here in the front row.

Vivjan Myrto

[ 00:34:27,670 ] You know, the more questions you ask, the later you're going to go to your happy hour, by the way.

Vivjan Myrto

[ 00:34:33,190 ] No, no, we're going to cut you off.

SPEAKER_3

[ 00:34:37,170 ] Thank you both so much for coming. I know early on in the conversation, you mentioned that seed capital really, it hasn't changed in terms of the deal flow and the check sizes, despite later stage capital changing a lot. Um, but presumably there's gonna be, you know, some fallback effect. If there's less acquisitions, less IPOs, less later stage funding, that's gonna make um seed funds more risk averse. So how do you see their risk tolerance changing, and what effect do you think that has on maybe the types of investments they make, even if they're still getting as many deals done?

Vivjan Myrto

[ 00:35:13,160 ] Yeah, it's a great question, and it's a great observation. One of the struggles that venture had over the past few years was FTC being a lot more conservative on approving M &As. And unfortunately, M &A activity in the United States dropped like a rock, which made it much harder for growth stage ventures. With that said, that more affects later stage ventures than early stage ventures. Early stage ventures, we're on a cycle where we invest today, we plant the seed today, and we can only reap the rewards five, six years from now. So unfortunately, we don't take macro as much into account as growth stage funds do. With that being said, just last week, we had nine IPOs. So it's changed a lot since January. It's changed a lot. So more M &As are happening. A lot more IPOs are happening. So I do think the next couple of years, you're going to see a much bigger number of those sorts of transactions happening.

Vivjan Myrto

[ 00:36:15,630 ] Another thing in venture that has changed a lot over the past two years, as money dried up from the public markets and M &As, we certainly saw a huge rise in secondary transactions. Right. So although there's a record number of seed funds being raised and certainly a record number of dollars going into into growth funds, you also saw a much bigger amount of money going into these new funds. That really started in the last three to four years to really counteract this imbalance in the market, which was the M &A drying up. So secondary markets have been an incredible space for us as seed investors to get liquidity for our own investors. So money is starting to flow in the system, but it's been very difficult over the past three to four years. So all that to say that activity, it's still going to be, I think, pretty good at the seed stage. I think growth is going to hurt more from macro conditions, particularly when it comes to the cyclicality of M &A markets and so on. So it was tough, but it's opening up.

Aaron  Pressman

[ 00:37:20,960 ] Can we take a question?

SPEAKER_2

[ 00:37:22,220 ] So I have a comment and a question. So I'm a co-founder of an AI company, and I think we are definitely in chapter two. Because when I pitch to VCs, they don't want you to boil the ocean. They want to understand how deep the vertical is. Um, I think 'lovable' is a good example. It's very clear— like the new unicorn. It was like non-technical people, so basically not developers, and like leveling the playing field. So, in the VC world, you have to get to that point. I think that's a really good point. Now, like chapter two, is like you have to know your vertical and it has to be super deep, improving that really early and often. But my question is, so obviously, as you know, that because you've been here from the very beginning, which is exciting. So you've seen the ebbs and the flows. People are comparing the AI boom to the dot-com and the bubble and the bursting. There's a lot of what some people say, ridiculous valuations happening right now as we speak.

SPEAKER_2

[ 00:38:10,270 ] There is a company called Adromeda out of Australia that's robotics. It is co-founded by a woman. She's claiming that there'll be a trillion-dollar valuation company. There's only about 14 in the world right now. So I guess it's two part. It's one, you think the valuations are valid right now, currently what you're seeing, knowing that there potentially will be a plateau. And then two is, will we see a massive increase in trillion-dollar valuations because of how fast we're moving?

Vivjan Myrto

[ 00:38:36,820 ] Yeah.

Vivjan Myrto

[ 00:38:39,290 ] It's a great question. Thank you for that. So there's a couple of ways to, you know, so there's two questions. Number one was, you know, are the companies today overvalued? And I would say that there's many, many companies that are overvalued. All right. There's no doubt about it. And I think if you were, you know, we raised our last fund last year. I'll give you a real example, truthfully. We raised our last fund, our fourth fund, last year. And one of the biggest challenges— or one of the biggest questions— that we had from our own investors and some new ones that we were trying to attract at the time, was really the valuations that it had on our own companies. If your company is making $50 million in revenue, growing 40% year over year, is it really worth $800 million? It's not. It's a simple answer if you compare it to the public markets. So I think that was a big challenge for a lot of seed funds because we're holding all of this, all of these companies that have valuations that do really match the traction of the company, certainly the margins or the growth rate and so on. So I think in 2021, 2022. You know, we were in a world where, you know, everybody was, you know, well, we're going to live up to that.

Vivjan Myrto

[ 00:39:43,400 ] And so they had this like really big, you know, really big expectations of companies. And that's sort of true in the public markets. If you look at Palantir, Palantir is trading at 200 times, you know, forward earnings. Is that really going to live up to that? I mean, who knows? I know one thing, that the 2001 dot-com bubble and what we're going through now, they're fundamentally different in the sense that in 2001, to think of a trillion-dollar tech company was absolutely a dream. And that was because the market was not really as adopting. Fortune 500 didn't really buy as much technology or software at the time. Today, it's very clear. One thing is that AI or just software, generally, just technology, generally, is going to have the largest market caps in the world. And so the ceiling is quite high. We just don't know what the ceiling is. I wish I knew, and I wish I had a crystal ball. But it's very, very difficult to say. But fundamentally, the companies that are building today, having a market, growing revenue, making the fundamentals work, those companies are going to be here for a long time.

Vivjan Myrto

[ 00:40:50,180 ] And most of them, I would say, they're fairly valued. And some of them, if you're lucky enough to find one, undervalued. Right. But there's certainly going to be a correction. There's no doubt it always happens. It is going to be at some point. And there's the correction venture. You don't hear about it. It doesn't affect the public markets. That doesn't affect your 401(k). It does not. You don't hear about it. And the debt correction already happened over the past two years, where a lot of these funds had to go and raise capital again, and they had to re-evaluate all of their portfolio. And write down a lot of their investments. So a lot of that has already happened in the private markets. The public markets, I think, they're still, I mean, some companies are actually quite good. They have really great multiples, really healthy businesses, and are growing quite well, particularly with the world adopting technology. At a scale and at a speed never previously seen. So very fundamentally different than the 2001 bubble. But yes, there are certain areas that are a complete bubble.

Vivjan Myrto

[ 00:41:52,440 ] But I think generally, I think we're OK.

SPEAKER_4

[ 00:41:56,010 ] Hi, thank you so much for this insightful conversation. My name is Smitha. I have a startup called Saki focused on supporting mothers during postpartum. So I have two questions. One is: I wanted to understand what do you see as the trends and investment that may be going into women's health? And then my second question is: we know that less than 3% of the VC funding goes to women founders. Do you see that being changing any time in future?

Vivjan Myrto

[ 00:42:25,240 ] Yeah, I think generally, you know, we've always been excited about women's health and also male health. I think it's also like really, really, you know, under underappreciated and underinvested, also male health, especially when it comes to reproductive male health. I think with women, it's certainly been an area that a lot of money has gone into, and I anticipate a lot more money will go into over the next few years. And I also think you've seen the rise of specialty funds really dedicated to women's health.

Vivjan Myrto

[ 00:43:00,970 ] reproductive, cancer being all throughout the whole stack. So I think it's a really great area to be. I don't know if I can give you a real, point you to certain specific examples.

Vivjan Myrto

[ 00:43:18,250 ] You know, we personally have a big interest in it, you know, and we've also been increasingly interested, again, and also in male health. And I think that if you look at like where health care was, you know. 20 years ago and where it is today. I mean, I'm a cancer survivor, right? Twice. And if you were to do chemotherapy today, it's fundamentally so different than it was 20 years ago. Right. I think most importantly, longevity is so much different than it is today. I think, you know, quantifying yourself is fundamentally different than it was back then. So from a consumer perspective, you know, I don't know a consumer, so I cannot speak for it, but I can see it as a consumer myself and my wife. It's very. you know, the ability to have data, you know, from how you sleep to how you eat to your glucose to your serotonin to everything. It's absolutely incredible. So for you. Building into that space, I don't think it's so much a question of where to get the money or how much money.

Vivjan Myrto

[ 00:44:19,870 ] I think it's really a question of what is the most important problem you can solve with the least amount of technology first.

Vivjan Myrto

[ 00:44:27,770 ] Right. Because a lot— I mean, a lot of people in healthcare, you know, myself included back then, you know, we tend to overengineer a little bit the solutions. You build a Ferrari and the market needs a Fiat or Toyota. Right. So you really got to make sure that you build the minimum delicious products to go into that market. And to your second question around diversity in our industry, I think it's been— You know, it's been awful. I mean, how can you else put it, right? It's been, you know, particularly when we started here in Boston, you know, even being an immigrant male was really difficult, right? And it still is very difficult, you know, particularly being a woman. Right. And I think it's very unfortunate because the most important thing that we can have in our business is both on the private side, but also the public side, is diversity and diversity of thought, most importantly. Because it makes us better decision makers. And it makes for a really incredible culture in our organizations. So I think that's changing.

Vivjan Myrto

[ 00:45:28,500 ] I think it's encouraging to see signs of change. But certainly more needs to be done. And unfortunately, my company is small, so I can't hire that much.

Vivjan Myrto

[ 00:45:37,259 ] I think, as an industry, I think it's been incredible to wake up to them.

Aaron  Pressman

[ 00:45:40,960 ] I'll just say, based on my reporting from, say, the last six to eight months in Boston and elsewhere in the country, there's... a decrease and a retrenchment of funds which were looking to help diversify the startup community and the investing community. And we've seen efforts closing and efforts being sued. So I don't think, right now, is an optimistic time, unfortunately.

Vivjan Myrto

[ 00:46:08,590 ] We should close on a good note. So anybody has any questions?

SPEAKER_7

[ 00:46:16,710 ] Hi, thank you so much for your time today. So you mentioned the expansion of real-world AI applications in 2026. In my mind, there are currently four constraints to real-world AI applications. I think of data. I think of talent. compute, and energy. I would love to hear your thoughts on the infrastructure that allows AI to scale, as well as which ones you're most bullish on for 2016.

Vivjan Myrto

[ 00:46:38,450 ] Yeah, it's a great question. And compute, talent, energy, and what was the last one? Sorry.

Vivjan Myrto

[ 00:46:49,340 ] Data, yeah. I think the data part is interesting, right? Because the problem with data is not so much availability of data, it's more storage and all kinds of things. And certainly there's areas where we still don't have good insights, right? You know, sort of the physical world that we all interact with. You know, so part of our big thesis is always been physical AI, for example, like how do you bring the physical world right into the digital age? Right. And that's sort of been a huge push for us. And robotics has been a good manifestation of that. Right. All kinds of sensors. Right.

Vivjan Myrto

[ 00:47:21,370 ] For us, what I think is really important when you think about compute, when you think about the infrastructure that allows us to build these companies on top of, I think it's really important to also, from a hardware perspective, we don't invest in companies that are actually building their own hardware. We invest in companies that are using just commodity hardware, loading, for example, with their own software to really make something in the real world a lot more visible or a lot more efficient and so on. You know, like Shipin, one of our companies here that retrofits large cargo ships and oil tankers with sensors to really understand what's happening on the ship at all times, a process today that's done by pen and paper, right? So there's been a really great business. And the talent wars, I think, the talent wars are, you know, they're being really hard. For the top talent, the ones that want to get $100 million pay package. However, on the other side, almost 80% of our companies now are shipping products about 30% faster than ever before by using Cursor, by using Lovable, by using Gemini, by using Copilot, all of this.

Vivjan Myrto

[ 00:48:28,790 ] So I think to get going... it's much easier from a talent perspective than ever before. To scale, it's much harder, right? Because to scale, you need sort of those like stars, right? But to get going, there's never been a better time to start a company. Over a weekend, you can start something that, you know, in the 90s probably or early 2000s took maybe like, you know, six months. And 100 engineers. Now you can do that over a weekend just yourself. So the talent is a little bit split. To grow is going to be hard. To get going is going to be much easier.

Vivjan Myrto

[ 00:49:02,290 ] From a compute perspective, Gosh, when we started, so one of our big investors was, is, you know, he led the Series A of Nvidia back in the day. You know, imagine getting an Nvidia $30 million valuation. You know, I, you know, I dream about that, but anyway.

Vivjan Myrto

[ 00:49:24,770 ] Compute has come a long way and compute is going to go a long way faster than ever before. You know, so I don't, when you're starting a company, I would not think of compute at a big constraint today.

Vivjan Myrto

[ 00:49:39,490 ] If you're in robotics, you might want to think a little bit more. And it's not so much about the compute power. It's much more about getting the GPUs that you need. I think that's going to be a big bottleneck. But thankfully, you know, you've seen so many more companies building some such incredible products from AMD. So I don't think there's going to be a big issue in the future. The real big issue is energy.

Vivjan Myrto

[ 00:50:02,320 ] Energy is certainly the biggest issue. If you look at OpenAI, which we had the benefit of having an insight track from the beginning, OpenAI basically is betting that they're going to get to AGI first, and it doesn't matter how many trillions of dollars they're going to spend, right? Because once you get there, nobody can catch up with you. The real problem is to get to AGI, you need...

Vivjan Myrto

[ 00:50:22,460 ] you know, energy and their margins are so negative because of energy. You know, so I think Commonwealth Fusion and companies like that here sort of the forefront of the next energy disruption can really impact.

Vivjan Myrto

[ 00:50:39,040 ] Maybe I should stop because I have a loud voice.

Vivjan Myrto

[ 00:50:43,750 ] Those companies are really going to make a huge difference. But the energy is really a huge, huge problem. There's no doubt about it.

SPEAKER_5

[ 00:50:55,600 ] There we go. Thank you, Aaron and Vivian, for coming and talking to us. Vivian, you had mentioned how most of the funding right now is going to AI companies.

SPEAKER_5

[ 00:51:06,840 ] How would you define what an AI company is, given it's really about gaining interaction across industries, and in what specific vertical do you think that there is more funding and more opportunity for funding going forward? And the last question, I swear, is...

SPEAKER_5

[ 00:51:30,520 ] You know, if you're a founder of one of those startups that is outside what would be considered an AI startup, would do you think that they would have an advantage, or maybe it'd be easier for them to succeed without so much competition and so much fighting for for resources, assuming obviously that they do receive that capital?

Vivjan Myrto

[ 00:51:53,840 ] Yeah, it's a great question. Let me ask the first one, the last question first. So competition, it's just really, really hard, right? One of the problems that we've had, and that's also like a problem to the last questions.

Vivjan Myrto

[ 00:52:09,650 ] Competition, the moats, have drastically gone down.

Vivjan Myrto

[ 00:52:15,490 ] Defending your business today, it's much harder than ever before. And there's ways to defend it. And one way to defend it is to raise an incredible amount of money. Right. It's like if you look at OpenAI, for example. OpenAI, you know, scrapes all of Zillow's data. And historically, Zillow has sued everyone that has done that. But they cannot sue OpenAI because he has 500 billion dollars valuation and incredible money to like fight that. Right. So startups now they're building this moat by raising a lot of capital and leaving to that. The other way that they're building a lot of moats is data. Data is going to be really the moat long term for smaller companies. So acquiring data, that's why I think being a vertical company, actually, it's much more investable, at least for us, because we can see the moat a little bit more long term. Because you go into a vertical where nothing else existed, because essentially, we're in the business of trying to find white space all the time. Where is the white space that we can invest in? And how can we build a company there that can be the leader?

Vivjan Myrto

[ 00:53:10,710 ] We never want to invest in the second big business in an industry. We want to invest always in the first one. So the first one really has to build a moat through talent, through culture, but most importantly, through data. That's really, really important. And it's much harder than ever before. We focus a lot on the, so there's two ways, like the digital world. right enterprise software all of this much much harder than ever before do you know to build a mode there whereas on the physical world it's much easier today to have a mode because you have a sensor it's hard to replace robotics companies have a huge mode because they're being deployed into the field and so on so you build a little bit of a mode just by being there physically But most importantly, you also are creating a data source whenever previously it was available. So you're getting the data raw from exactly the source that you needed, so you're not relying on someone else. So that's really, I think, on the physical world, there's a lot more defensibility you can build if you're building something physical and so on.

Vivjan Myrto

[ 00:54:06,510 ] So that's really important. And to the definition of what's an ad company, gosh, I don't even fucking know. Sorry for my language.

Vivjan Myrto

[ 00:54:13,970 ] So it's like, sorry. It's so difficult because when we started, every data company all of a sudden became a machine learning company. Every machine learning company then became an AI company. Every AI company became a generative AI company. Every generative AI company became an LLM company. So there's always these shifts that happen. I know one thing for sure, though. The important thing is you have incredible tools at your disposal today. From open source, you know large language models to everything in between—right? From voice to all these things. What's really important is to understand how can you use the best available technology to your advantage today. Which happens to be a lot of machine learning models and open-source AI models. How can you use this really advanced technology to solve the problem that you're so passionate about? That's really the important thing. So, how you're automating that workflow, for example, on the digital side, you see a lot of workflow automation happening today.

Vivjan Myrto

[ 00:55:14,220 ] On the physical world, you're seeing also a lot of workflow automation, but just more on the physical side. It's so important to say, because every company that comes in our door is like, 'I'm an AI for this, I'm an AI for that.' It's like, 'OK, that's awesome.' It's great that you're using AI to solve something, because we believe that AI and machine learning and all these things can truly solve these large problems more efficiently than ever before. But I just want to understand how you're using it. What is the mode that you're going to build around this? And what's so unique about you? And I do believe that we're entering a world, from a thesis perspective, that next year we're going to see a lot more small language models than larger language models that are going to be a lot more interesting, actually, to invest in. And we just did one. That we're going to announce.

Vivjan Myrto

[ 00:55:59,220 ] I'm not sure what we're going to announce a couple weeks from now, probably. It depends on the founder. But it's small language models. And why small language models? Because you have incredible privacy. Is really accustomed to one specific workflow that's a really big problem within that industry. So I think you're going to see a lot of that as well, that it's also homegrown and we're not relying on other really large language models. So you look at companies like Harvey, the big company is worth $5 billion. There's essentially just a wrapper. It's a large language model wrapper, but the moat from that wrapper and from that company comes because we've really specialized it to one specific use case, which is the legal world.

Vivjan Myrto

[ 00:56:42,240 ] I think their churn is high, in my opinion. And who knows where that ends up? But I think that you're going to see a lot more small language models. So it does not matter if you're an iCompany or not. You can call yourself whatever, as long as you're using the best available tools to you to solve a really large problem. And the best, again, the best today is automating a lot of this. It's cost-efficient and it really helps organizations, large enterprises, Fortune 500, grow their margins and really be a lot more efficient in whatever they do.

Elena LoBianco

[ 00:57:09,680 ] We have two minutes time for one final question.

Vivjan Myrto

[ 00:57:12,560 ] I can talk really fast, so just ask away.

Elena LoBianco

[ 00:57:14,480 ] I think you had your hand raised. Yeah.

SPEAKER_1

[ 00:57:18,840 ] Hello, my name is [Name]. I'm a robotics grad student at Northeastern. And well, my question is.

SPEAKER_1

[ 00:57:30,630 ] Oh yeah, you have the same the opposite problem that I'm being having. So yeah, so my question is: so you know, a couple years ago, we saw that [DeepS] came out, it kind of ramble the market a little bit. And so, China, we know, you know, we have BYD and this whole like the robotics environment seems pretty developed. So my question is, how do you see that affecting where the investment money goes in 2026? Is that something that we should actually be worried about or does it? Not really matter.

SPEAKER_1

[ 00:58:03,870 ] You're meaning to be worried about DeepS and what's coming from China? Basically, technological development in China. Sure, sure, yeah.

Vivjan Myrto

[ 00:58:11,730 ] Yeah, it's a great question that's always on our mind, right? Because some of the best returns in venture capital ever came from China over the past 20 years, right? Incredible companies being built there. And if you go, I think the United States is unique in the sense that we tend to have our homegrown companies growing within the United States, and that's a market big enough for us that we can grow multi-billion dollar businesses without actually having to go outside of the United States. But if you go anywhere in Europe or if you go anywhere in Africa, BYD is everywhere, but there's no Teslas. It's very clear, I think, from a global perspective, who potentially will be the leader in EVs. BYD is an incredibly large company that covers a much larger part of the world than Tesla does. But Tesla has hard margins, and certainly the energy business that Tesla is building is what really gives it the value that it is today, which is valued at six times higher than BYD. BYD is a market cap of about $200 billion. Tesla is $1. 2 trillion. And it's really the energy business.

Vivjan Myrto

[ 00:59:12,670 ] It's not so much about the EV business that they're building. Although the EV business, I think, is pretty great as well. So the deep-seek model is another question where I think that you know one thing became clear was that I think at the beginning you know, and we've been a little bit contrarian in this in this standard hyperplane where you know we believe the future of AI is open source, right and so if you look at the future of BI that is open source, companies like Open AI and you know, and some of the larger language models, you know, not Gemini, you know, potentially Copilot because they have, you know, such large distribution, you know, distribution is everything, right? So, you know, we believe that those models are going to be really, really important for everyone in the world, not just China, right?

Vivjan Myrto

[ 00:59:54,470 ] You know, is China ahead of America, America ahead of China? I mean, I don't know. Right. You can hear, you know, 10 people and everybody's going to give you a different opinion. But I think it's important for us, as we think about where to put our money and our capital and where to invest it. I think it's really important to have a lot of open source models because it makes the development of these companies more specifically. The birth of this company is a lot easier. So I don't care if you're using deepseek or if you're using open AI. What really matters to me is privacy and security. So you have to have security and privacy embedded in your product day zero. Is deepseek secure? I probably don't think so. So that's really important. It's not the model where it's coming from, what part of the world or who's developing. But open source, I think, is going to win the day in AI, particularly when it comes to large language models.

Elena LoBianco

[ 01:00:45,810 ] Thank you. We are out of time.

Vivjan Myrto

[ 01:00:48,350 ] Great.

Vivjan Myrto

[ 01:00:50,370 ] Let's go get drinks.

Vivjan Myrto

[ 01:00:53,840 ] Thank you.

Elena LoBianco

[ 01:00:57,970 ] I'd like to thank each and every one of you for being present at this final session for Startup Boston Week. Thank you to our wonderful panelists and fantastic moderator. Right now, going on downstairs is our closing party, and kicking off is our startup showcase. You may not stay in this room. I kindly ask that you go downstairs and start the party, make new connections, have fun. Thank you all so much. You cannot stay in this room. You may not stay in this room. You may not stay in this room. I do need everybody.