Venture capitalists are in an odd spot: Financially motivated to pump billions of dollars into AI startups that could hasten their own extinction.

• But not everyone is fretting propagation of the sector.

Driving the news: Marc Andreessen said on a recent podcast that he could envision venture capital being "one of the last remaining fields that people are actually doing."

• Andreessen's argument was that venture is more art than science, as evidenced by low batting averages of even the most successful investors.
• Sure, it comes off as self-serving. Like a frog croaking about its swimming ability as the water heats up. But that doesn't necessarily make him wrong.

The big picture: What we know for sure is that some VC firm functionality is already being automated, particularly in the back office, and investors themselves are increasingly using AI for due diligence.

• There's also less need to hire junior employees in what has historically been an apprenticeship business — raising pipeline questions about the next generation of leaders, although neither Andreessen nor Ben Horowitz traveled that path.

Zoom in: Venture capital is a two-part job. The picking and the post-pick management.

• Horowitz acknowledges on the same podcast that AI might eventually be better at picking, but argues that "who gets to pick" is just as important — and that access is tied to a VC's relationships and reputation.
• Moreover, they both argue that post-pick management is as much about a founder's psychology as the startup's income statement or product roadmap. In other words, it still needs a little of that human touch.

Yes, but: AI technologies, including those funded Andreessen Horowitz, seem designed to replace as much of that humanity as possible. If not explicitly, than certainly implicitly.

• Just yesterday, Mark Zuckerberg talked about how AI could fill the void for those who wish they had more friends. That's a far cry from automating rote tasks or making a better analytical mousetrap.

Between the lines: It feels that if many of these venture-backed startups reach their full potential, it would include both arts and sciences — or at least enough of it that institutional investors will no longer see the value of paying 2-and-20.

• After all, who needs human relationships when AI agents can just connect with other AI agents?

The bottom line: This still is mostly theoretical, and venture capital's future isn't the most pressing labor, economic, or social concern posed by AI.

• But venture capitalists are among the very few who are directly responsible for AI acceleration, no matter how it plays out.

Source: Giphy

Hometown Food Co., a Chicago-based portfolio company of Brynwood Partners, agreed to buy canned pasta brand Chef Boyardee from Conagra Brands (NYSE: CAG) for $600 million in cash.

Why it's the BFD: This is part of a trend whereby food conglomerates are dumping worse-for-you brands, even if iconic, due to the rise of GLP-1s and protein-heavy diets.

Wait, what? Yes, I botched this one in the blurbs yesterday.

• Brynwood had hired a bank in early 2024 to sell Hometown, which makes Pillsbury's shelf-stable baking products, and it caused my brain to cramp. The sale never occurred, after initial bids came in low.

History lesson: The "real" Chef Boyardee was Hector Boiardi, an Italian immigrant who'd eventually become head chef at the Plaza Hotel in New York City. He'd later open his own restaurant in Cleveland.

• Mach Industries, an Austin, Texas-based aerospace defense-tech startup, is in advanced talks to raise $100m co-led by Khosla Ventures and insider Bedrock Capital, per TechCrunch. axios.link/4d1YgjR

• Astronomer (dba Astro), a unified data ops platform, raised $93m in Series D funding. Bain Capital Ventures led, joined by Salesforce Ventures and insiders Insight Venture Partners, Meritech, and Venrock. axios.link/4iObC4B

• Doppel, an SF-based social engineering defense platform, raised $35m in Series B funding at a $205m valuation. Bessemer Venture Partners led, joined by 9Yards Capital, Sozo Ventures and insiders a16z, South Park Commons, Strategic Cyber Ventures, and Script Capital. doppel.com

🚑 Stately Bio, a Palo Alto, Calif.-based cell therapies developer that leverages a live-cell imaging platform, raised $12m in seed funding. AIX Ventures led, joined by Dimension Capital, Foothill Ventures, Village Global, Caffeinated Capital, Mitsui Global Investment, BoxOne Ventures, and Axial VC. axios.link/3EUViRx

• Suite Studios, a Boulder, Colo.-based file platform for creative collaboration, raised $10m in Series A funding. Grotech Ventures led, joined by S3 Ventures, Bonfire Ventures, Range Ventures, and Massive. suitestudios.io

• Oscar, a Portuguese home services raised €6m. Indico Capital Partners and Lince Capital co-led, joined by Failup Ventures and Boost Capital Partners. axios.link/3GNzjMW

• EDEN, a Seattle-based digital sales enablement platform for home services, raised $3.7m. Climactic led, joined by Better Ventures and C2 Ventures. axios.link/4lRF8t3

• Pallie AI, an SF-based health and wellbeing companion, raised $2m in seed funding led by True Ventures. pallie.ai

• Astro Shapes, an Ohio-based custom aluminum extrusions maker owned by Wynnchurch Capital, acquired Canfield, Ohio-based Star Extruded Shapes. axios.link/4cWk7sV

• Novvia, a packaging firm backed by Kelso & Co., acquired Garrett Hewitt International, a New York-based provider of cosmetic packaging products. axios.link/44OVGf2

• Valsoft, a Montreal-based software acquisition platform backed by Coatue Management and Viking Global Investors, acquired MonkeySoft, a maker of catering management software, from VC-backed ezCater. axios.link/436JDIJ

🎲 Bet365, a British gambling group that could be worth £9b, is talking to banks about a U.S. IPO, per The Telegraph. axios.link/3Gw0ufp

• Envoy Technologies, a Cilver City, Calif.-based EV-sharing network, is opting for a direct listing over an IPO. Selling shareholders — including Shell Ventures, GM Ventures and Building Ventures — plan to offer 7.8m shares, with Envoy disclosing an $8 per share reference price. axios.link/4d1YpDV

• Oyo Hotels, the Indian budget hospitality company that last year bought Motel 6, again is postponing IPO plans, this time due to opposition from major shareholder SoftBank, per Bloomberg. axios.link/42Z4oF9

Wednesday newsletter top was about the SPAC revival. Since then, five SPACs already have raised a combined $1.2 billion via IPO, while another four new SPACs filed for IPOs. So this section returns (at least for now).

• Cantor Equity Partners II, the 11th SPAC formed by Cantor Fitzgerald, raised $240m in an upsized IPO. axios.link/42YToYi

• Cartesian Growth III, a SPAC formed by Cartesian Capital Group, raised $240m in an upsized IPO. axios.link/44fa5Rw

• Copley Acquisition, a tech and lifecycle SPAC, raised $150m in its IPO. axios.link/4lT3hiG

• Gores Holdings X, a SPAC formed by PE firm Gores Group, raised $310m in an upsized IPO. axios.link/42kXn0M

• Republic Digital Acquisition, a fintech and crypto SPAC led by Republic Digital CEO Joseph Naggar, raised $264m in an upsized IPO. axios.link/4jDamma

• Wen Acquisition, a fintech SPAC led by Julian Sevillano (ex-McKinsey & Co.) filed for a $261m IPO. axios.link/4lWjl3e

🚀 AeroVironment (Nasdaq: AVAV) completed its acquisition of space and defense engineering firm BlueHalo for around $4.1b in cash and stock from Arlington Capital Partners. axios.link/4fB2ZJS

🚑 HistoSonics, a Minneapolis developer of liver cancer therapies, is exploring a sale for around $2.5b, after receiving inbound strategic interest, per the FT. It's raised over $300m from firms like Johnson & Johnson, Alpha Wave Ventures, Venture Investors, Lumira Ventures, Yonjin Venture, and the State of Wisconsin Investment Board. axios.link/4d0oJyq

• Vox Media, backed by over $400m in VC funding, agreed to sell gaming and entertainment site Polygon to Canada's Valnet. axios.link/3Yp5M2q

⚡ Equinor (Oslo: EQNR) sold its 60% stake in the Peregrino, an offshore Brazilian oilfield, for $3.5b to Prio Tigris. axios.link/42VRjMx

• Third Point disclosed a stake in U.S. Steel (NYSE: X), in a bet that its troubled takeover by Nippon Steel will close. axios.link/42VBS7f

• dao5, a multi-strategy crypto investment firm led by Tekin Salimi, raised $222m for its second fund. axios.link/3RJ3LtZ

• K1 Investment Management is targeting $6.25b for its sixth flagship fund, per a public pension document.

• Lightspeed Venture Partners changed its regulatory status, becoming a registered investment adviser (RIA). axios.link/4cWk1l4

• Smith Point Capital, a VC firm led by ex-Salesforce co-CEO Keith Block, raised more than $360m for its debut fund. smithpointcapital.com

• Stellex Capital is targeting $2.5b for its third flagship PE fund, per a public pension document.

• Chiraag Deora joined VC firm Greycroft as a principal. He previously was with CRV. axios.link/4iTwbNe

• In-Q-Tel, the CIA's venture arm, promoted Jon Chait to managing partner. axios.link/3EQekZs

• Scott Frederick stepped down as managing partner of Sands Capital Ventures. axios.link/44TEeGf

• Thrivent promoted Jen Wilson to head of private investments. axios.link/4jY3qzD

The U.S. economy added 177k jobs in April, beating expectations, while the unemployment rate was stable at 4.2%.

• Average hourly earnings came in a bit lighter than expected.

Interest rate impact: Likely none. The Fed is expected to keep rates unchanged during next week's policy meeting.

• Go deeper.