Immad Akhund

The news: Mercury founder Immad Akhund has closed his first institutional fund at $26M, partnering with Yash Toshi (ex-EQT Ventures), formalizing ~350 angel investments made since 2016. The design is deliberately non-threatening: 60 companies at ~$150K average non-lead checks — “isn’t it better if Sequoia or Founders Fund is leading the round and I get to invest alongside them?” — powered by the fact that “30 to 40% of all startups use Mercury.”

Founder advice that cuts against Harry’s book: take the highest price. “We did our Series B at 120x, which was not rational. This is 2021, but we did it and I would do it again” — $120M into a 40-person company. The discipline is downstream: raise enough at the high mark (a $1B valuation on a $50M raise is the real mistake), then don’t spend it — while conceding VCs actively push founders to spend.

He is unapologetically biased toward serial founders with a chip on their shoulder — “being an entrepreneur is irrational, but being a serial entrepreneur is especially irrational,” and that’s the signal. Best specimen: Truebill, first investment at a $16M valuation to a $1.25B exit (>30x, 2016–2021), from the repeat founders behind Webs.com. His biggest miss ran the other way: passing on Scale AI’s 19-20-year-old founders — “I thought I could run this company better… I was just so wrong.”

“AI is overhyped and overvalued” at seed: the same idea pitched a fourth time at a $40M valuation, and Harry observes that “there were always two or three competitors in everything five or six years ago, but now there’s 15,” all raising $10M+. Deeper problem: labor-replacement revenue priced at a third of labor cost will compress to “a tenth or maybe even a 20th of the labor cost” once competitors on the same foundation models undercut — “the margin compression is just inevitable.” He’s rotating into space and hard tech, which he says are better than AI SaaS companies at seed.

Seed economics have shifted from unicorns to decacorns: at $20-25M entry prices post-dilution, “I’ve seen as low as 8x from a seed investment to unicorn — this is awful.” A 10x fund requires $10B+ outcomes, and angels need at least 20-30 checks — “five bets” is not a portfolio.

Venture’s future is a barbell with a dead middle: multi-stage funds will IPO (“we heard some stuff about GC doing it”), more money enters because outcomes are now trillion-dollar scale, small-check investors do fine — “I don’t know what happens in the middle.” Public markets: he says most people see ~$10B as the minimum, so tenders and secondaries substitute.

Notable change of mind: 12 months ago he was “very skeptical” of advanced superintelligence; now “the advancement in AI has just been relentless… it’s probably going to happen sooner than we think” — yet he’ll have more engineers in five years, not fewer: “I have infinite ambition.”

🔗 Original source & video: 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund