StrictlyVC Download The $20B LP View: AI Valuations, Solo GPs, and What's Really Happening in Venture
Aug 12, 2025
Lara Banks leads venture investing at Makena Capital Management, overseeing a $3 billion portfolio across 30 managers. In this discussion, she explores the surge of AI valuations, arguing that their rapid revenue growth justifies hefty price tags despite high infrastructure costs. Banks highlights the challenges solo GPs face and the shifting dynamics in the LP community. She also shares insights from the 2021 boom-bust cycle and discusses emerging liquidity opportunities in the secondary market as companies remain private longer.
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Multiple Paths For AI Rollups
- AI roll-ups and infusing AI into service businesses could create software-like margins but face cultural and executional challenges.
- Multiple models may succeed: retrofit incumbents, roll-ups, or ground-up reimagining of workflows.
Why AI Valuations Look Different
- Makena sees today's high AI valuations justified by extremely rapid revenue growth, not purely multiples.
- The open question remains revenue durability and evolving gross margins given infrastructure costs.
Liquidity Creates New Opportunity Sets
- Liquidity challenges have spurred more secondaries and continuation vehicles, especially in buyouts, with venture following.
- Holding strong venture assets longer can create outsized returns as many top companies are decade-plus stories.