The Past, Present, and Future of AI, Robotics, Venture Capital, Crypto | Why Deep Tech Startups Mess up Value Capture | Michael Dempsey, Managing Partner, Compound

The Peel with Turner Novak

Turner Novak

Technology

4.6 • 11 Ratings

🗓️ 14 August 2025

⏱️ 118 minutes

🔗️ Recording | iTunes | RSS

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Summary

Michael Dempsey is the Managing Partner at Compound, a thesis-driven, research-centric investment firm.

We spent two hours talking through the past, present, and future of a bunch of topics in technology and investing.

Michael started investing in AI in 2016. He was the first investor in now-unicorns Runway and Wayve. But he hasn’t done much AI investing over the past few years. We talk about why, how AI will intersect with robotics, the future of things like crypto and synthetic biology, and why so many deep tech companies mess up economic value capture.

We also talk about what it means to be a thesis-driven venture firm, Compound’s research process and how to replicate it, what private and public market investors can learn from each other, advice for anyone starting in venture today, how to build a brand in VC, and why venture firms don’t compound and actually decay over time.

Thank you to Kevin Kwok, Andy Weissman, Cristóbal Valenzuela, Blake Robbins, and Smac at Compound for their help brainstorming topics for this.

Special thanks to Ramp for supporting this episode. It's the corporate card and expense management platform used by over 40,000 companies, like Shopify, CBRE and Stripe. Time is money. Save both with Ramp. Get $250 for signing-up here.

Timestamps:

(4:09) Leading Runway’s Seed in 2018

(10:15) Short-term ARR vs long-term sustainability

(16:20) Compound, a research-centric investment firm

(18:41) Investing in bio, crypto, real-world AI, and healthcare

(23:58) VC firms do not compound, they decay over time

(29:27) How to build a research-focused investment firm

(41:30) Current state of venture slop

(45:43) Building a brand as a VC firm

(52:31) Investing in Wayve in 2016

(58:53) Why deep tech companies screw up economic value capture

(1:04:57) How to approach massive funding rounds

(1:08:36) Should VCs “play the game on the field”?

(1:15:33) Compound is a forecasting firm

(1:21:37) Advice for young people getting into VC

(1:26:48) Public market investors underappreciate narratives

(1:31:20) Michael’s crypto thesis + real use cases

(1:40:07) Why crypto hasn’t seen mass adoption yet

(1:49:00) Humanoid robots won’t work

(1:54:42) Should you make a hyped launch video?

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Transcript

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0:00.0	If you have an organization that's really good at being long-term oriented, you can ship
0:04.5	a bunch of things in the short term that you think will work in the long term, you're
0:08.1	actually not super stressed about creating the most easy, beautiful product.
0:12.6	And I think in AI today, a lot of people sometimes they get caught on both ends or they
0:19.5	try to build both the terminal, beautiful, maximum viable product.
0:24.4	And the other end, they build these hyper-narrow features, but they don't ship enough features fast enough that they can out-compete the noise of the space or the like 30,000 other AI people shipping adjacent features.
0:35.0	Welcome to the peel. I'm your host, Turner Novak, founder of
0:38.2	Banana Capital. Today's guest is Michael Dempsey, managing partner of compound. We spent two hours
0:43.4	talking through the past, present, and future of a bunch of topics in technology and investing.
0:47.8	The main thing people get wrong in deep tech areas is the commoditization curve. They think that the edge will lie in technology, and it almost never does.
0:57.9	Michael started investing in AI in 2016, being the first investor in now Unicorns runway and wave,
1:03.1	but hasn't done much over the past few years.
1:05.4	We're trying to kingmate companies.
1:07.4	They're trying to like foie gras these startups into like just blowing as much on inference as possible to like nuke a market.
1:13.6	And it just like doesn't work.
1:14.6	You have these like late movers of like really pedigreeed people that then go and raise money and like they're not in it to like actually compete.
1:23.6	They're in it to like feel like they're not leaving a bunch of money on the table.
1:26.6	We talk about the future of AI and robotics. In robotics, a lot of people have the hammer of like AI scaling laws and like humanoid robot and they're like looking for a bunch of nails. How Compound thinks of itself is a research-driven investment firm. We do the thing that like most feces tell you not to do. We very discreetly predict the future. What public and private market investors can learn from each other.
1:46.6	Idea moats and narrative capture is actually like way more valuable than they ever appreciated.
1:52.8	Advice for anyone starting in and building a brand in VC today and why venture firms don't compound,
1:57.8	they actually decay over time.
1:59.7	Most firms hire junior people to expand the
	...

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