20VC: a16z Raises $10BN in New Funds | Mercor Raises $350M at a $10BN Valuation | OpenAI Restructuring: Who Wins and Who Loses | Why IRR is a BS Metric and Three Ways to Win in VC Today

What It Covers

OpenAI completes restructuring to for-profit PBC at $500B valuation, Andreessen raises $10B across four funds, Mercor hits $10B valuation at 17-month revenue acceleration, venture strategy debates on spray-and-pray versus concentrated investing approaches.

Key Questions Answered

• •OpenAI Restructuring Winners: Microsoft secured 10x return on $13B investment plus ongoing Azure contracts and IP rights, charitable foundation received $135B endowment, employees gained liquidity path. Brett Taylor executed complex board negotiations converting nonprofit structure to public benefit corporation, enabling future IPO at potential $2T valuation.
• •Mega Fund Economics: Andreessen's $10B raise splits into $6B growth, $1.5B AI apps, $1.5B AI infra, $1B defense funds. Smaller individual fund sizes ($200M seed, $1.5B AI apps) remain competitive with mid-sized managers. LPs must accept stapling requirements—investing 2x in less desirable funds to access preferred funds.
• •Series B Investment Reality: Carter data shows 547 Series B investments yield 35% under 1x return, 50% between 1-5x, only 18% above 5x return. Even single 100x outlier like Figma returns only 0.2x when spread across entire vintage. Picking skill remains essential—spray strategies fail without concentrated follow-on capital.
• •Late Stage Valuation Compression: Companies at $1B+ revenue trading 20x ARR face different return profiles than early stage. Ramp moving from $23B to $30B valuation represents minimal markup for seed investors after dilution. Public-equivalent companies should generate public-market returns (11-40% annually), not traditional 3x venture multiples.
• •Customer Concentration Risk: Mercor reaches $500M revenue in 17 months but faces 50%+ revenue concentration in two AI model providers. High growth justifies 20x revenue multiple only if AI CapEx hypergrowth continues 3-5 years. Gross margins compressed by 70% passthrough to specialist labor providers creates vulnerability when customers optimize spending.