Curry, Serhant & The Big Four's Downfall
Inside the New Rules of Talent Risk, AI Disruption, and Modern Fundraising
I am reigniting this newsletter because there is way too much happening to not leverage this platform to at least share what I am learning and, at best, help you (my audience) be inspired, learn, and grow.
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Now let’s dive in.
What do Steph Curry’s injury and Ryan Serhart's brand have in common?
According to CNBC, the Golden State Warriors are the most valuable franchise in sports, but their recent playoff challenges (they may have been eliminated by the time you read this) with Steph Curry's injury highlight a critical business concept: key man risk.
When your business is highly leveraged on specific talent, you're vulnerable. The Warriors' dynasty has been built around Curry's generational talent, but when he's unavailable, the entire system falters, and there are even rumors that both he has chose to keep certain young talents out of the rotation while those young talents have chosen to look him off while on the court as well.
Another interesting key man risk that I have followed this week is the rise of Ryan Serhant, he has single-handedly become one of the most influential real estate influencers in the world.
Here is an excerpt from Polina Pompliano’s The Profile this week:
“Still, the looming question remains: Can Serhant the company thrive without Serhant the man? It’s a classic case of what venture capitalists call “key man risk,” the vulnerability that arises when a business depends too heavily on one person. “If he got hit by a bus tomorrow, that would be a major blow,” Miller says. “And over time, you would expect that Serhant is larger than him, but I don’t know if you could confidently say that’s the case today.” Ultimately, Miller will define success in dollar signs. “I think he builds a multi-billion-dollar public company in the next half a decade, and that would be a success for us,” he says.”
For startups, this translates directly to founder dependency, as Pompliano pointed out, as Serhant raised $45 million for his company in 2024. I've seen countless companies where the founder is the only one who can close deals, make key product decisions, or maintain investor relationships. When that person is stretched too thin or unavailable, growth stalls.
The lesson? Build redundancy into your systems and team. Document processes, cross-train employees, and create a culture where knowledge is shared, not siloed. The most resilient companies can withstand the temporary loss of even their most critical team members.
AI "Pop-Up" Tax Firms: Underbidding the Big Four, But Is It Sustainable?
As AI continues to transform professional services, we're seeing a wave of what I call "AI pop-up tax firms" that are significantly underbidding legacy players like the Big Four at the enterprise level and what I think is substantially overpricing at the retail and small business level.
These nimble operations, often run by former Big Four professionals and often in Silicon Valley, run by an engineer plus accounting teams, are leveraging generative AI to dramatically reduce the time and cost associated with tax preparation and advisory services. From my understanding, they're winning clients by promising the same quality at a fraction of the price at the enterprise level by significantly underbidding the big-name firms like PwC, Ernst and Young, and Deloitte.
In a recent conversation with a PwC employee, I learned that these firms are causing real concern at traditional accounting giants. The question remains: is this sustainable? AI can certainly enhance efficiency, but tax work still requires human expertise for complex regulatory interpretation and edge cases.
Another company focused here is Neo Tax situation, I wrote about three years ago when they were primarily focused on startups and has shifted their focus to larger clients —there's enormous potential for AI to transform tax services, but the winners will be those who recognize that AI is an enhancer of human expertise, not a complete replacement.
The other side is where I sit day to day with ModernTax’s business arm of helping small businesses and individuals resolve tax debts, catch up on filing, and connect with tax experts as they prepare for big financial transactions like selling their company, raising money, or getting access to credit. This market also has new players, but from our perspective of preparation, compliance, these companies are overcharging for their services. After taking demos with some, I found that they may be charging over $2,000 for a single household tax return and over $3,000 for a business tax filing for a small business – this seems high for services that are presumably cheaper to deliver because they are “using AI”.
Secondaries Rising: Even Pre-Seed VCs Are Adapting
I recently had lunch with a respected early-stage investor who just closed his latest fund. What struck me was how even pre-seed and seed VCs are changing their approach to capital deployment and liquidity.
Traditionally, secondary sales (where existing shareholders sell their shares) were reserved for later-stage companies. Now, we're seeing secondaries become part of the conversation much earlier. Take Clay, for instance—they recently announced their fundraise, which included a $20M secondary component, allowing early investors and employees to get some liquidity.
This trend reflects two realities: 1) The exit timeline for startups has lengthened considerably, and 2) Investors need to show returns to their LPs, even in an environment where IPOs and acquisitions are less frequent.
For founders, this means potential opportunities for partial liquidity earlier, but also more complex cap tables and investor dynamics to navigate. Hunter Walk of Homebrew VC had a good piece on this from the VC standpoint, I am still looking for more from founders on how they are navigating this.
Global Sales Tax Platform Making Waves
I recently connected with Nicholas Rudder, founder of Sphere, and came away impressed. They're building a global sales tax platform that helps digital companies navigate the complex world of international taxation.
What's fascinating about Sphere is its approach to the problem. Unlike competitors like Taxware or Avalara, who focus primarily on U.S. markets, Sphere is tackling the global challenge head-on with an AI-powered system that interprets and applies tax regulations across jurisdictions.
This space is evolving rapidly, especially as governments worldwide seek to capture tax revenue from digital services and tariffs (I still am wrapping my mind around these implications, but it is coming up in customer calls weekly). The critical insight here is that tax compliance and management is becoming a first-order problem for scaling companies, not an afterthought.
According to Nicholas, their system can assign the right tax to any product regardless of where it's sold—a truly global solution for a global economy. They're already working with impressive logos like Linktree and several prominent digital service providers.
Devs.ai: Secure AI Workspace Tackles Enterprise's Greatest AI Challenge
My friend Aaron Bailey and fellow city parent has officially launched his new role and company as GM of Devs.ai, a project internally incubated at AppDirect (which acquired his startup, Builtfirst).
The problem they're tackling is critical: More than 75% of employees are using free editions of ChatGPT, Gemini, and other AI tools where their data becomes training data for the models, creating a massive security hole for enterprises.
Devs.ai offers a Private AI Workspace that never allows any model to train on data on the platform, addressing this security concern head-on. What's more impressive is their approach to keeping up with the rapid pace of model development. With approximately two new LLMs being released weekly, they're bringing these models to their platform within days of release.
They've created a single platform for businesses to engage with 30+ AI models in a secure workspace alongside a no-code agent builder, making it accessible even for non-technical users.
Check out Aaron's announcement on LinkedIn and sign up for free access at Devs.ai.
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Events
Eric Newcomer is building a vertical-by-vertical events business that's challenging legacy conferences like Money 20/20 by creating smaller, more intimate gatherings of industry insiders.
His latest, the Breaking the Bank Financial Technology Summit on May 20th in San Francisco, features an impressive lineup including Zach Perret (Plaid), Eric Glyman (Ramp), Jackie Reses (Lead Bank), and Josh Reeves (Gusto).
What makes these events special is their focus on quality over quantity. Instead of massive convention centers filled with thousands of attendees, Newcomer's events bring together a few hundred decision-makers and influencers for meaningful conversations.
I attended his inaugural Cerebral Valley AI Summit in 2023, and it was remarkable how it attracted virtually everyone who mattered in AI at the time. These events are becoming the place where real industry connections are made and deals get done.
What I'm Reading
Megan Maloney's "Running a Series A Process" - A must-read for anyone approaching this critical funding stage. Maloney's step-by-step breakdown of the process, from preparation to execution, is some of the clearest guidance I've seen on navigating Series A fundraising.
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Until next week,
Matt