Good day. With exits constrained and tender offers becoming a standard retention tool for leading startups, secondary exchanges are rapidly maturing. Some analysts now believe that prices based on completed transactions on secondary exchanges can be reliable signals that respond to market conditions. What potential do you see in secondary stock prices and how do you use them in your own pricing models? Please email responses to vcnews@wsj.com.

Last week, we asked about the optimal number of portfolio companies for a seed fund in today's market. Here are condensed and edited excerpts of responses:

• Greg Sands, founder and managing partner at Costanoa: “While some firms pursue broad diversification and are delivering great net returns, we believe you get most of the benefits of diversification by about 30 investments/fund. Doing that with six partners lets us provide founders a more hands-on experience and distinctive value—and also deliver great long-term returns to LPs.”
   
• Morgan Blumberg, partner at M13: “There’s no single optimal number, but for most seed funds today it’s likely in the 30-50 range. Where you land depends on fund structure, ownership strategy, and most importantly what you can actually deliver after the check clears. The generative AI era has pushed portfolio counts up slightly. Barriers to entry are lower, talent is ubiquitous, and many sectors are being reshaped at once. That creates a moment where a higher number of bets can be justified, if the model supports it.”
   
• Darian Shirazi, managing partner at Gradient: “Our portfolio construction model, which is based on our own simulations from private and public data, shows that consistently driving 4-5x fund returns requires investing in 50+ companies. LPs have traditionally pushed back on portfolio size, but the landscape is changing. We believe LPs who adapt to that reality will be better positioned.”
   
• Aaron Samuels, co-founder and managing partner at Collide Capital: “30-35 companies per fund works well for us. It’s broad enough to benefit from power law dynamics, but concentrated enough that we can keep meaningful reserves to support founders beyond the first check. Our ongoing partnership with portfolio companies matters just as much as the initial investment.”
   
• Andy McLoughlin, managing partner at Uncork Capital: “Although the market (in terms of both check size and valuations) has shifted, we believe that 35-ish companies is the right size for a seed fund taking lead stakes in rounds. That number gives us enough shots on goal, understanding historic mortality rates and current market dynamics (like which category could Anthropic or OpenAI kill tomorrow).”

And now on to the news...

Sam Altman’s side hustles. When Sam Altman was briefly fired, then rehired as OpenAI CEO in 2023, the company’s board of directors had fretted over what little they knew about his personal investments and whether they posed potential conflicts. A newly formed board pledged to fix the problem, but it never went away. As OpenAI, the maker of ChatGPT, hurtles toward a planned initial public offering this year, valued at around $850 billion, the question persists—how to determine whether decisions serve the company’s best interest or Altman’s.

Big tech companies are attempting a tricky balancing act: They are dramatically increasing their consumption of fossil fuels to power data centers needed for artificial intelligence computing while clinging to the goal of carbon neutrality for their operations. To square that circle, Microsoft, Alphabet, Meta and Amazon have been pouring billions into startups that sequester greenhouse gases from the atmosphere, buying credits that cancel out some of their emissions. They also have been ramping up spending on renewable energy certificates, which allow companies to offset their emissions by buying green power from elsewhere.

California just took a step toward enacting perhaps the strictest private-equity transparency law in the country. The state Senate Judiciary Committee on Tuesday approved the Private Equity Sunshine Act, which would require state pension systems to disclose their returns from alternative-investment vehicles such as private-equity and real-assets funds and compare them to the performance of public stock indexes. The measure also would require private-equity managers to disclose the number and classification of employees for every company they control.

• The Judiciary Committee vote—unanimous, with one abstention—is only a first step in a long process if the bill is to become law.

People

Gigascale Capital appointed John Lilly as an advising partner. He was previously chief executive officer of Mozilla, and spent 12 years as a general partner at Greylock.

Asgard Therapeutics, a biotech startup focused on cell reprogramming for cancer immunotherapy, appointed Wolfram Brugger as chief medical officer. He joins the company from Autolus Therapeutics.

Scowtt, a marketing and sales optimization platform, appointed Madhu Jagannathan as chief financial officer.

Exits

Foundation Medicine, a precision medicine company and an independent affiliate of Roche, is set to expand its monitoring portfolio with an agreement to acquire SAGA Diagnostics for up to $595 million. The price of the deal includes commercial and regulatory milestone payments, Foundation Medicine said.

Plata, a digital bank serving Latin America, closed a $405 million Series C round at a $5 billion valuation led by Bicycle Capital.

Glydways, a San Francisco-based urban mobility startup using autonomous electric vehicles on dedicated guideways, landed $170 million in Series C funding co-led by Suzuki Motor, ACS Group and Khosla Ventures.

Zūm, a Redwood City, Calif.-based student mobility startup, picked up a $100 million investment valuing the company at $1.7 billion. TPG’s The Rise Funds provided the financing, with Managing Partner Steve Ellis joining the company’s board.

Turion Space, an Irvine, Calif.-headquartered space infrastructure startup, grabbed over $75 million in Series B funding led by Washington Harbour Partners.

Artemis, a New York-based protection platform providing real-time detection and automated response for AI-powered attacks, emerged from stealth with $70 million in combined seed and Series A funding from investors including Felicis, First Round, Brightmind Partners and Two Sigma Ventures.

Wealth.com, a Tempe, Ariz.-based startup building an AI infrastructure layer for wealth management, fetched $65 million in Series B funding from investors including GV, Citi Ventures, Alumni Ventures, Titanium Ventures and Pruven Capital.

Wayve, a London-based self-driving technology provider, added $60 million in Series D extension funding from Advanced Micro Devices, Arm and Qualcomm Ventures. In February, the company said it secured $1.2 billion in Series D financing led by Eclipse Capital, Balderton Capital and a SoftBank Group fund, valuing the company at $8.6 billion.

HockeyStack, an San Francisco-based enterprise revenue intelligence platform, has raised over $50 million in funding, including a new investment from Bessemer Venture Partners and others.

Ulysses, a San Francisco-headquartered startup developing autonomous vehicles for surface and subsea operations, nabbed $46 million in combined seed and Series A funding. Andreessen Horowitz led the $38 million Series A round, which included participation from Booz Allen Ventures and Harpoon Ventures.

Expo, a Palo Alto, Calif.-based open-source platform for building, deploying and maintaining production-ready mobile apps, scored $45 million in Series B funding led by Georgian.

Mintlify, a startup building an intelligent knowledge platform for humans and AI, snagged $45 million in Series B funding led by Andreessen Horowitz and Salesforce Ventures at a $500 million valuation.

Resolve AI, a San Francisco-based startup advancing AI systems for complex production environments, raised $40 million in Series A extension funding led by DST Global and Salesforce Ventures at a $1.5 billion valuation.

Parasail, a San Francisco-based deployment network for AI agents, obtained $32 million in Series A funding co-led by Touring Capital and Kindred Ventures.

Nas.com, an AI platform for the solopreneur economy, secured $27 million in Series A funding led by Khosla Ventures.

• Next Time You Order a Dairy Queen Blizzard, You May Be Talking to AI

• Altman Attack Suspect Called for ‘Luigi-ing Tech CEOs’ in Online Messages

• Anthropic Expands U.K. Operations as Claude Demand Grows
   
• Chip Maker TSMC Is More Bullish Than Ever on AI, Despite Iran War
   
• Australian Design Startup Canva Avoiding Tech-Sector Layoffs
   
• Sumeru Equity Buys Tax Tech Company K1x in $175 Million Private-Markets Expansion Bet

This newsletter was compiled by Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

The team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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