Michael Dempsey, Early Investor in $1.5B RunwayML and $1B+ Wayve, Explores Venture Capital's Evolving Landscape

Michael Dempsey, Managing Partner at Compound and a recognized early investor in several artificial intelligence (AI) unicorns, recently shared his insights on the future of technology and venture capital in a new episode of The Peel podcast. The discussion, highlighted by a tweet from host Turner Novak, covered a broad spectrum of topics, from AI's trajectory and the dynamics of venture funding to the practicalities of emerging technologies like robotics and cryptocurrency.

Dempsey's foresight in the AI sector is underscored by his early investments in companies now valued at over a billion dollars. He was a first-round investor in RunwayML, the AI-powered creative tools platform, which secured a $141 million extension to its Series C funding in August 2023, pushing its valuation to $1.5 billion. Similarly, his firm invested early in Wayve, a London-based self-driving AI company, which raised $1.05 billion in February 2024, solidifying its unicorn status.

A central theme of Dempsey's commentary is his contrarian view on the venture capital industry itself. He posits that, unlike traditional businesses, "VC firms decay over time" rather than compounding, a perspective that challenges conventional wisdom in the investment world. This outlook extends to his critique of "venture slop," suggesting a lack of discipline or excessive capital deployment in certain market segments.

Regarding the future of physical AI, Dempsey expressed skepticism about the widespread viability of "humanoid robots," a topic gaining significant attention. He suggested that while AI intelligence will scale, purpose-built robots are more likely to achieve broad adoption due to manufacturing feasibility and specific utility, contrasting with the generalist approach of humanoids.

The discussion also delved into "actual crypto use cases," moving beyond speculative narratives. Dempsey explored practical applications of blockchain technology, emphasizing its potential for real-world utility in areas such as decentralized finance and capital coordination, offering a more grounded perspective on the sector's long-term value.

Dempsey's comprehensive dialogue provides a critical examination of current trends and future directions in deep technology and investment. His research-centric approach at Compound aims to identify non-obvious opportunities, guiding his firm's focus on frontier technologies and challenging prevailing industry assumptions.