Is Capital Becoming Conscious?

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Venture Used to Be a Club. Now It’s a Network.

For a very long time, venture capital looked the same: a handful of funds, mostly in Silicon Valley, run by people who knew each other, looked the same, and invested in each other’s deals.

Access was the moat.

If you were a founder and you didn’t know someone who could introduce you to a VC investor, your shot at capital was slim. And if you were an aspiring investor, you couldn’t just start deploying. You needed a track record, a Rolodex, and an invite to the party.

Venture capital was a closed system. Hierarchical. Slow-moving. Designed to keep outsiders on the outside.

Then something changed.

First came angel syndicates and rolling funds, breaking the idea that only big, established firms could write meaningful early-stage cheques. Platforms like AngelList made it easy for someone with a network and a thesis to raise and deploy capital without needing a large fund.

Then came the rise of micro-funds, solo GPs, and emerging managers. These are people who can move fast, specialise in a niche, and often bring more value to a founder than an old-school fund because they’ve actually built companies in that space or run the kind of network the founder needs.

Access stopped being a moat and the ability to connect networks became the edge.

And those networks look nothing like the traditional firm structure:

• They’re decentralised.
  

• They’re dynamic.
  

• They move at founder speed, not Monday-partner-meeting speed.

A warm intro used to mean you knew someone at a big fund. Now it means you’re one Slack message away from half a dozen angels, a couple of syndicates, and a solo GP who can get you in front of your dream customer.

This is what happens when venture stops being a club and starts becoming a network:

The barriers drop, the speed increases, and suddenly, the big funds with big committees don’t feel as inevitable as they once did. In this new shape of venture, the old-school power dynamics are shifting. The gatekeepers don’t control access anymore, the network does.

Reflexive Capital Is Real

In public markets, reflexivity is well understood. George Soros built his entire investing philosophy on it: markets don’t just reflect reality, they influence it.

Venture capital, until recently, felt insulated from that. A fund would quietly back a company, work behind the scenes, and maybe, years later, there’d be a headline-worthy IPO.

That’s not how it works anymore.

Today, the act of investing itself creates the story that drives the next allocation:

• A hot pre-seed round closes and hits Twitter → other investors swarm the founder → the valuation jumps before the ink is dry.
  

• A solo GP posts why they backed a company → the founder gets inbound from a Fortune 500 partner → suddenly the company’s trajectory changes overnight.
  

• A single viral post on LinkedIn or X can now do more to shape a startup’s next 18 months than any product roadmap.

Capital isn’t just chasing signals anymore. It is the signal.

This is reflexive capital, and it’s changing who has power in early-stage investing:

• The fastest investors create the strongest signals.
  

• The strongest signals bring the best follow-on investors.
  

• The best follow-on investors validate the initial bet.
  

This feedback loop is collapsing timelines:

Rounds that used to take months now close in days (or hours) while valuations can jump 20–30% purely because the right early names are involved. “Momentum investing” - once an ugly phrase in venture, is now standard operating procedure.

And it’s not just about writing a cheque anymore. It’s about shaping narrative velocity.
The investor isn’t just funding the company they’re creating the market perception that drives customer interest, follow-on capital, and recruiting power.

In practice, this means the edge in early-stage venture is no longer just having proprietary deal flow or strong diligence processes. Those still matter, but speed and narrative weight have become just as important:

• Can you create momentum the moment you invest?
  

• Can you amplify the founder’s story so follow-on capital has no choice but to engage?
  

• Can you move fast enough to set the signal instead of chasing it?
  

That’s what makes federated networks (we’ll get there in Section 3) so powerful. They don’t just deploy capital. They deploy signal. And in 2025, signal is capital.

From Solo GPs to Federated Networks

For years, the default career path in venture looked something like this:
Join an established fund, learn the ropes, climb the hierarchy, and maybe, if you’re lucky, one day become a partner.

But that doesn’t seem to be the popular route it once was.

The explosion of solo GPs and micro-funds over the past five years has fundamentally changed early-stage venture. These are investors with deep domain expertise - former operators, sector specialists, or content creators with loyal audiences, who can move quickly and make high-conviction bets without needing approval from a 10-person investment committee.

At first, these solo GPs were viewed as a curiosity. A niche experiment. Could one person really compete with the resources and brand of a $50 million, $100 million or more venture fund? Turns out the answer is yes - at least in certain parts of the market.

What solo GPs lacked in scale, they made up for in speed and founder alignment. A single investor who understands your sector, can wire quickly, and has an active network often provides more immediate value than a big firm that promises the “platform advantage” but takes weeks to decide.

Still, there’s a limit. A single GP can only do so much. Networks are powerful, but fragmented. One solo GP might have extraordinary connections in SaaS, another in climate tech, another in fintech, yet individually they can’t match the breadth or firepower of a large traditional fund.

Enter the federated model. This is something Connor Murphy of Bridge and Angel Invest wrote about on LinkedIn a Couple months ago - See the post HERE

Instead of competing individually, solo GPs, angels, and small emerging funds are starting to join forces. They coordinate informally through WhatsApp groups, Telegram channels, and syndicate platforms, sharing deals, expertise, and even LP relationships. In practice, it looks like a group of like-minded investors acting like one giant distributed fund but without the overhead, bureaucracy, or slow decision-making of traditional venture firms.

For founders, this can feel like an upgrade. Instead of one large fund that moves at committee speed, they get multiple specialised investors who each bring a unique network and are personally invested in their success. For investors, it’s a way to punch above their weight: access more deals, leverage each other’s strengths, and collectively compete with the incumbents.

This isn’t just an efficiency play. It’s a philosophical shift. The centre of gravity in venture is moving from single entities with monolithic brands to fluid networks that can scale their reach without scaling their headcount.

The implications are huge. For founders, the question becomes: why give up a big chunk of your round to a single, slower-moving fund when you can stack a handful of highly engaged specialists who together bring more value? Obviously, there’s caveats here and it all depends on the company, the investors and what it is the founders are building. Sometimes the big fund might be the right option. But it’s definitely no longer the only ‘right option’ available.

AI Is Accelerating the Shift

One of venture’s long-standing superpowers was “pattern recognition.” A handful of partners sitting around a table would talk through a founder’s background, early traction, and market timing, and decide if they’d seen something like this succeed before.

That edge is eroding.

Artificial intelligence is now doing in seconds what used to take analysts and associates weeks:

• Scraping founder activity across LinkedIn, GitHub, and Product Hunt.
  

• Pulling in sentiment data from niche communities and media coverage.
  

• Ranking companies against historical outcomes and sector trends.
  

The best emerging investors are leaning into this, not resisting it. They’re building infrastructure - data pipes, dashboards, AI-powered scoring, that gives them visibility far beyond what a single human network ever could.

The practical effect? The traditional argument for large funds - “we have more people, therefore we see more deals”, no longer holds in quite the same way. A single GP with the right tools can see, filter, and move on opportunities just as quickly as a 10-person deal team.

This is why the federated model is so powerful in a tech-enabled world. Imagine a dozen niche investors, each armed with AI-driven sourcing and scoring, sharing signals in real time. Their collective view of the market rivals, and in some sectors surpasses, what a top-tier fund can see. And because they’re small, they can actually act on what they see, without weeks of internal debate.

It’s not that big funds disappear. They still play a critical role at later stages and in large follow-on rounds. But at the early stage, where speed, signal, and conviction matter most, the edge is shifting toward networks that combine human expertise, distributed reach, and data-driven intelligence.

In other words: AI isn’t replacing venture capitalists. It’s replacing the need for venture capitalists to look like they did 10 years ago.

The Takeaway

The shape of venture capital is changing.

The old model - a handful of large funds acting as gatekeepers, deciding who gets funded and on what terms, isn’t dead, but it’s losing its edge. What’s replacing it isn’t just more funds. It’s networks.

Smaller, faster investors are combining their reach, expertise, and technology to act like a single distributed organism:

• Solo GPs partnering with each other instead of competing.
  

• AI tools giving one-person funds the same data firepower as large teams.
  

Founders opting for federated rounds where every investor at the table is hands-on and personally invested.

What we’ve been working on at Shuttle

• Another successful Drop (No.3) is closing this week 🚀

• We’ve hired a new fractional CMO to support our marketing efforts 🎯

• We’ve hired a Head of UK Operations to support our expansion efforts 🇬🇧

The Unsophisticated Investor is brought to you by Scott & Rob, the founders of Shuttle. We’re both sick of private markets being a playground exclusive to the ultra-wealthy so we started a company to challenge the status-quo. Shuttle’s singular focus is to unlock private markets for Millennial and Gen Z tech professionals and help them build wealth through the highest performing private market opportunities.

Scott & Rob
Shuttle Co-Founders