Noah Lichtenstein has a simple but sharp take on venture right now:
Capital is commoditized. Edge comes from operators.
The irony is hard to ignore. Venture used to pride itself on sourcing the next big thing before anyone else. Now? Most funds are chasing the same or similar deals, and the real differentiator is whether a founder wants you in the room.
Crossover VC’s bet is that founders want people who’ve been there. The ones who scaled companies like Databricks, Instacart, Perplexity, Lattice, and more.
Operators turned investors who act as magnets for the next generation of builders.
Based on this principle, Noah and Crossover have invested in VC funds like:
Laude: led by folks like Andy Konwinski, past co-founder of Databricks
Alt Capital: led by Jack Altman, past CEO and co-founder of Lattice
Wayfinder – led by Yuri Sagalov, with an advantage from being a past YC founder and partner
As Noah mentions:
“We are really firm believers that in today’s venture landscape, those who have operating experience, who have actually built companies, have an unfair advantage.”
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But underneath the narrative are some uncomfortable truths Noah calls out:
Aggregation of capital: 79% of venture dollars last year went to just 30 firms. Call it the “Blackstonification” of venture — giant funds hoovering capital while returns concentrate in a few hands.
Family offices’ dilemma: everyone wants direct startup access, but without asymmetric information you’re usually “the last to know.” If Sequoia just preempted the round, why would you get the invite?
Too many emerging managers: post-ZIRP, everyone wanted to spin up a fund. The harsh reality? Unless you’re in the tiny sliver of outlier funds, you’d be better off in the S&P 500.
Portfolio construction as strategy: writing 25K angel checks doesn’t prove you can win allocations when the check needs to be $1M+. Moving up the pyramid is brutally hard.
So where does this head? A few downstream consequences Noah sees:
(1) Specialization vs. generalization. Unless you’re Sequoia or Benchmark, the generalist VC is in decline. Right to win now means domain expertise + operating scars.
(2) Data as a filter. With exposure to ~1,000 seed-stage companies, Crossover tracks 120+ data points to find the 10–15% worth leaning into. Signal in the noise becomes survival.
(3) Excellence compounds. Their dinner series brings billion-dollar founders, seed-stage builders, and even pro athletes into the same room. No agenda — just a flywheel of ambition and ideas.
Venture may not be “dead,” but it’s undeniably reshaping.
Scale sits at the top, but edge lives at the bottom — with the operators, networks, and small funds that still feel like craft.
Key chapters in the podcast discussion
(00:00) Episode introduction and overview of the strategic VC report
(01:21) Guest introduction: Noah Lichtenstein and Crossover VC
(01:26) How Crossover structures its fund model and investment approach
(03:06) Four key criteria for selecting fund investments
(04:11) Why operator experience is a differentiator in venture
(06:04) Building networks and long-term relationships in Silicon Valley
(07:23) Inside the Crossover dinner series and lessons from top founders
(08:43) The personal journey of building and running a venture fund
(10:43) How Crossover uses data before and after making investments
(19:55) Capital concentration and shifting dynamics in venture
(24:19) Family offices, direct investing, and navigating access challenges
(29:27) GP spinouts, emerging managers, and defining a right to win
(33:41) Portfolio construction strategies and key considerations
(37:30) How emerging managers can build relationships with Crossover
(38:56) The rise of democratization and new LP access models
(41:07) What’s ahead for Crossover VC
Listen and enjoy!
