Allied Venture Partners

Hello Partners,

As a current or prospective partner, this newsletter provides exclusive insights into our investment strategy, portfolio companies, and industry trends.

Thank you for your continued trust and support,

Matt Wilson

Founder & Managing Director | Allied Venture Partners

Not an LP? Click here to join the Allied Venture Partners syndicate.

Team Updates

• Our core team includes Steve, Melinda, Brendan, and Leia.

• The Allied Scout and Advisory programs continue to expand with several new members each week, providing quality, diversified deal flow from across Canada and the United States.

• If you know a great startup that we should meet, please introduce us!

New Deals

• We closed our latest investment in Stanify.AI last week. Thanks to everyone who participated.

• Our next investment, a Series A follow-on in one of our fastest-growing portfolio companies, is launching later this week. If you’re not already a syndicate member, join now to get the invite.

• New LPs can join the Allied syndicate for free and gain access to our dealflow here.

Portfolio News

• On October 16, we celebrate the official launch of Blended Blue in style on an LA rooftop, in partnership with Pitch Lift and LA Tech Week. Thanks to the 400+ founders and investors who joined us! It was a party for the ages.

• Bavovna was invited to speak at the Commercial UAV Expo in Las Vegas to discuss how their technology is transforming the role of drones in global and economic security.

• GroWrk revenue continued to reach new all-time highs in Q3—shoutout to CEO Carlos on running an 8-figure, rapidly growing business, with two kids under 3.

• Trace secured its first U.S. Navy contract for AI visualization, completed 12 nationwide ESPN studio deployments for the NFL, NBA, NHL, and College GameDay, and launched its new mobile app on Apple and Android. Check out Trace’s new promo video on YouTube.

• I’ll be attending Future Summit in Calgary this week. If you’re there, come say hi.

• I had a fantastic time judging pitches during LA Tech Week. Thanks again to my Venture Partner, Steve Walsh, and his team for hosting such a tremendous event.

Industry Insights

The cracks in LP liquidity remain a reality, and they're reshaping deal dynamics in real-time. This month alone, we've witnessed multiple instances of VC funds reneging on term sheets or abruptly pivoting deployment strategies after failing to call capital from their own investors.

For founders, the lesson is unforgiving: verbal commitments mean nothing until the wire hits the bank. We're advising every portfolio company to maintain fundraising momentum regardless of promised leads, as even well-intentioned investors face liquidity constraints that can stall rounds. In this environment, patience isn't a virtue—it's an existential risk.

Meanwhile, AI bubble comparisons to 2000 miss a critical infrastructure distinction worth highlighting: Fiber optic cables installed during the dot-com era lasted 25 to 40 years; whereas GPUs running today's heavy AI workloads burn out in 2 to 3 years. This isn't a one-time CapEx event but a permanent OpEx cycle, fundamentally altering the economics of the buildout.

However, the revenue circularity is very real—hyperscalers buying chips from NVIDIA, which trains models on those same chips, creating a self-referential loop vulnerable to any missed forecast.

As we close out the year, corporate earnings remain solid, but I’m cautiously optimistic. We don't have an earnings problem; we have an expectations problem, and that's manageable.

What concerns me more is the widening gap in model capabilities. For example, over the past few weeks, I’ve been stress-testing ChatGPT against Qwen on financial analysis, and it reveals a troubling divergence: Chinese models demonstrate significant tactical depth that OpenAI's increasingly constrained outputs can't match.

Whether this reflects increasing U.S. AI regulations (and regulatory capture, as noted by Bill Gurley) or strategic choices by OpenAI, the competitive implications are stark. Chinese models have no handcuffs, and the gap is widening fast.

As a reminder, our Core Investment Values since Day 1:

Read our investment thesis one-pager, available here.

Can you help us grow our social channels? Please follow us on X, LinkedIn, and YouTube.

Got a question? Chat with Ask Allied, our new AI-powered assistant trained on Allied Venture Partners’ corpus of website content, newsletters, podcasts, investment memos, and more.

Disclaimer: The information provided herein is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Individuals should consult their own professional advisors before making any investment decisions. Past performance is not indicative of future results.