We loved being at ADE last week. On Friday night we hosted a dinner at Cecconi’s with an amazing group of people from some of the world’s leading agencies, promoters, publications, platforms and AI companies.

We want to be part of hosting these kinds of events all around the world. So if you’re hosting a conference, or you’re part of something going on and you want to chat to us about how we can bring conversations like this to it, please just reach out to me.

This week’s essay comes out of a panel & conversations we had in Amsterdam.

Napper

By Napper Tandy · Why the next wave of creative founders may not need venture capital.

The most impressive thing the venture capital industry ever achieved was propagating the cultural meme that the only way to build a business is to raise venture capital. Over the course of the last two decades, the principle that VC funding is the only way to build a durable, ambitious business that matters has become accepted wisdom, to the point of being absolute fact.

This wasn’t the case a generation ago. Prior to that point, venture capital was a rather fringe proposition for a certain kind of technology company being built in a certain part of the world.

Undoubtedly, venture capital has been an incredible input to building many of the world’s most interesting companies. It has built high-velocity capital into the world economy, in a way that allows enormous ideas to be started, built, developed and shipped around the world in incredibly short amounts of time.

The less desirable outcome, however, is a generation of founders who believe this is the only way to go if they want success, and that a business not eligible for venture capital is a business not worth building.

This couldn’t be more wrong.

I was at Amsterdam Dance Event last week, as I am every year, and we sat in on a wonderful panel, “Who Funds The Future? Capital On Different Terms”, with Beta Lucca, William Morgan of Restless Egg and Bradley Orford-Hall of xRave Ventures. It’s great to hear young, smart, forward-thinking investors talking about capitalising interesting projects off the beaten track. But I also felt Bradley had something particularly important to say: not all businesses are fit for VC funding, especially in the creative industries.

And of course, he’s right. VC funding is used to fund businesses pursuing explosive, exponential growth, where J-curve graphs map businesses growing from a standing start to global dominance in just a few short years, and these days sometimes even months.

I’ve been on the journey myself as a creative founder. I believed, from the zeitgeist around me and the accepted cultural norms, that raising a certain kind of money was the only way for me to progress. In many ways I’m glad I did raise that financing, and in some ways it was the right fuel for the business. But it also put me onto a development track, and a set of expectations and external commitments for the company, that once made can’t be broken. They can drive ambition, focus and direction, for you as a founder and for the wider business. But they can also compromise optionality and the different paths the business might evolve along.

In addition to this, any business with talent at its core, like creative talent, is itself shaped like a VC fund: you’re investing in a number of different portfolio assets that may or may not take off. As one VC once told me, VCs won’t invest in VC-shaped businesses. They don’t like the business very much, even though they’re in it themselves.

I think we’re living in a very, very interesting moment, where the areas of business building that you needed capital to pursue are collapsing in on themselves in an extraordinary way. I don’t think this is being appreciated or understood enough.

If you want to build a business that needs to buy vast quantities of GPUs (the chips used in artificial intelligence) or one that needs to consume enormous amounts of power, or needs significant infrastructure, then raising capital to fund the very large upfront purchases of hardware and infrastructure is an inevitability.

If, however, you need capital to hire engineering teams or growth teams, there is now a question whether a much leaner team of entrepreneurial founders and early employees can build the business with the same ambition and velocity, using AI as their accelerating resource rather than capital.

That opens up an interesting line of questioning. Is a new generation of founders going to be empowered to accelerate their businesses themselves, with these new technological levers, rather than being obliged to sell ownership to accelerate through capital? This has the opportunity to radically reshape what contemporary business building looks like.

There’s been a big meme in the last few years around seedstrapping. Seedstrapping is where you raise an initial seed round of maybe one, two or five million pounds, and then you never need to raise again. You only issue a small ownership slice of the company, and go on to build it without any additional financing. It has, I think, somewhat romantic connotations in the modern zeitgeist, because the founders issue relatively little equity and keep a large ownership position, even when the business reaches a comparable scale to a venture-backed company.

I think the next wave is an acknowledgement that the only thing better than raising only a seed round is raising no rounds at all, and keeping absolute ownership of the company.

It’s binary. The difference between raising money and not raising any money is night and day. As soon as you raise money, your commitment to external shareholders completely changes how you make decisions, how you communicate the company and the economic shape of what you return.

VC investors are motivated by an exit: a sale, a public listing or a merger of the company. That’s how they get their returns. Founders and employee shareholders, on the other hand, can benefit enormously from dividends and the other ways a company can repay its shareholders. Those don’t fit the return profile of venture capital funds, so once you’ve raised, you’re very strongly disincentivised from doing anything like that.

We’re fascinated by these changes, and by helping companies develop the tools to use capital more efficiently, and in turn helping brilliant founders and creative people find ways to keep more of what they earn, by embracing new ways of working and new tools.

Equally, we’re watching in real time as VCs broaden their brands and practices to become media companies, strengthening their cultural relevance but also acting as a form of direct distribution for their portfolio companies, expanding their perceived value-add well beyond capital alone.

We’re looking towards a new era where artists, creatives and creative business-people have the opportunity to retain a vastly bigger share of what they own, and to address a historical mismatch between the main source of global startup capital and their business, all in one go.

We’re so glad and excited to be part of this story.

The only thing better than raising only a seed round is raising no rounds at all.

Each one read in full by one of us. The initials say who picked it.

Believe licenses its artists for Spotify's AI covers and remixes tool

Believe's artists and labels, TuneCore's included, are now licensed for Spotify's coming AI covers and remixes tool, Spotify's fourth deal for it after Universal, Merlin and Kobalt. Sony and Warner haven't announced one. Believe's founder, Denis Ladegaillerie, in an earlier MBW interview: "The artist must consent first, period."

Our take. You need at this stage, and where everyone is culturally, a centralised set of approved assets that have gold-plated artist approval, because that's a prerequisite to do anything. And then you have these prefabricated modules that extrapolate those approved assets into different languages, different versions, in a way that's always rooted in the approval.

Read on MBW →

Universal is the first major to license TYGER, which fits songs to gameplay

TYGER's beta runs in more than 20 games with combined monthly audiences above 540 million players.

Our take. My argument: a catalogue is a dataset, and most labels only have time for a small slice of theirs. A catalogue company is giving human attention to the top 5% of its catalogue, and an agentic workforce could be giving attention to 100% of it.

Read on MBW →

Suno admits it hasn't deleted all the recordings it trained on

In its answer to Universal and Sony's suit, Suno admits it "has not deleted all of the sound recordings it has used to train its AI models". The labels say its new model is "the fruit of the same poisoned tree". Suno says it kept them because the labels asked it to before the suit, and denies still using them.

Our take. There is lots of perfectly reasonable and problematic controversy around generative video and generative music. We're not anywhere near any of that. But if some of the legitimate concern about that prevents people in those spaces from using AI everywhere else in the business, then that'd be a double, double loss.

Read on MBW →

Twinnin, a consent registry for faces, opens to 3 million models

Twinnin, rebranded by the Brighton studio UnitedUs, lets people license or defend their likeness under a "Verified Human" mark. Model Management has opened it to its network of more than 3 million models.

Our take. Offers and deals in the music industry are complicated and often difficult to understand. We believe in empowering artists to make decisions on their own terms, and that means understanding the offer yourself before doing the deal.

Read on Creative Boom →

Anthropic previews Claude Duet, an agent that briefs you each morning

It's a research preview for Pro and Max plans in the US, with a waitlist. It works across more than 6,000 connectors and asks before anything sensitive, like sending a message or making a payment. I invest in Anthropic through Principia.

Our take. By default an agent proposes and one of your team approves. Nothing goes to a client or an agency without a person saying yes.

Read on Anthropic →

Did raising money change how you run your company, or are you building without it? Reply to this email. A few lines is plenty.

First published on atlasstudios.ai. Field Notes is written by Napper Tandy, Kieran Mallon and Abdo El-Mobayad at Atlas Studios, applied AI for the creative industries. Forwarded this? Sign up at fieldnotes.atlasstudios.ai/subscribe. Napper invests at the frontier of AI through Principia (Anthropic, xAI, Replit). We say so whenever we cover them, and never write about valuations, rounds or share prices.