Topline Top Investor: AI Killed Most Moats. These 4 Still Work | Liz Christo, Partner @ Stage 2 Capital
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May 3, 2026 
Liz Christo, general partner at Stage 2 Capital who invests in early-stage software startups, discusses build versus buy and hidden maintenance costs of DIY AI tools. She covers engineers embedded across departments, inflated TAMs in pitch decks, risks to critical thinking from AI drafting, and which moats still matter like proprietary data, vertical networks, regulation, and systems of record.
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Forward Deployed Engineers Change Org Design
- Some companies are deploying engineers into every department to build end-to-end tools and remove humans from repetitive work.
- Liz saw an onboarding agent reduce human involvement to escalations only, showing operational leverage beyond sellable products.
Pitch Decks Inflating TAM For A $10B Story
- Pitch decks are inflating TAM to hit a new $10B outcome milestone, creating unrealistic narratives.
- Liz says founders shoehorn vertical automation wedges into billion-dollar market stories despite tiny real markets.
Ban AI For Work That Crystallizes Thinking
- Protect critical thinking by banning AI for tasks where you internalize insight, like summarizing board decks or writing investment memos.
- Liz enforces hard lines: she won't use AI to draft board deck summaries or investment memos because writing crystallizes thought.