NFX is a seed-stage venture firm built around a single conviction: network effects are the #1 source of defensibility in tech, responsible for roughly 70% of the value created since 1994. They lead pre-seed and seed rounds for founders building companies that can compound a durable moat — network effects, embedding, brand, and proprietary data — and they apply this lens especially hard in the AI era, arguing that intelligence can clone features overnight but cannot clone the relationships users have with each other. They are a thesis-driven, founder-first lead investor across marketplaces, fintech, crypto, gaming, techbio, proptech, and generative AI.
A specific, painful customer problem stated in concrete terms, ideally a bottleneck customers want solved 'yesterday.' NFX wants founders to anticipate the risks an investor will see and address them head-on, talking in numbers not generalities.
“Talk in specific numbers, not in generalities” — NFX Fundraising Manual
“The customers wanted it yesterday.” — James Currier
“This product cracked the bottleneck in private markets analysis of wading through unstructured data.” — James Currier
“Don't say sentences that don't have numbers in them.” — James Currier
A product that delivers a quantifiable, disruptive improvement — not an incremental feature — and that comes at the problem from a differentiated (often AI-first) direction. NFX wants to see the product itself, ideally working or in interactive mockups, and prizes diagrams over words.
“Diagrams communicate 10 times more effectively than just words.” — 16 Non-Obvious Fundraising Lessons On Pitching
“We think the biggest breakthrough with AI and games will come from Latitude's direction and it will be disruptive, not incremental.” — James Currier
“Latitude is an AI company first. They are coming from AI to games, not starting with games and adding AI.” — James Currier
“Customers reported saving up to 45 hours per week.” — James Currier
A clearly sized revenue opportunity expressed as TAM (number of customers multiplied by annual revenue per customer), paired with a credible narrative that the company can become huge. NFX wants founders to repeat the 'we will be huge' narrative explicitly.
“Show size of revenue opportunity using TAM (# of customers * annual revenue per customer)” — NFX Fundraising Manual
“And repeat the core narratives: we are low risk; we will be huge; others are interested and moving forward.” — Gigi Levy-Weiss
Fast growth and strong KPIs presented in specific numbers — not generalities. Organic, marketing-free user growth is a powerful signal. NFX uses momentum (both business progress and fundraising progress) as the primary proxy for reduced risk.
“Seeing that you're growing really fast and other key KPIs can motivate VCs to take a meeting” — NFX Fundraising Manual
“They already have a million monthly active users with no marketing and they are already the largest consumers of GPT-3 processing.” — James Currier
“The faster the VC thinks the business is moving, the less risky it seems, and the more pressure on the investor to move fast.” — The Non-Obvious Guide to Fundraising
“Net revenue was up 23% from between September and October” — James Currier
Founders with special, hard-to-replicate skills and excellent judgment, who are transparent and honest. NFX explicitly judges character in the meeting; any whiff of evasiveness is disqualifying. They favor teams that are the obvious go-to group for their specific problem.
“Be transparent and honest. Investors will not invest if they pick up signals of lack of transparency” — NFX Fundraising Manual
“VCs judge your character in the meeting and the way you interact with them” — NFX Fundraising Manual
“This team is the go-to team for people around the world exploring applications of NLP AI — specifically OpenAI's GPT platform, and specifically gaming.” — James Currier
“this team has great judgment. Balancing Growth and profitability. Speed and stability. Control and partnership.” — James Currier
A model with built-in defensibility — ideally network effects, the source NFX considers responsible for 70% of tech value creation. They want to understand why the business can become huge and hard to compete with, not just how it makes money.
“Focus on business defensibility and why it can be huge” — NFX Fundraising Manual
“Defensibility is what will define the success of your business. More than anything else, network effects are the key to that success.” — The Network Effects Manual
“Network effects are responsible for 70% of the value created by tech companies since the Internet became a thing in 1994.” — The Network Effects Manual
“you need multiple short-term and long-term defensibility strategies.” — Pete Flint
A credible plan to survive a flood of competition from startups, incumbents, and platform giants. NFX wants founders to win fast in the open market then retreat into a fortified moat (network effects, embedding, brand) before they are copied. Network effects are the strongest moat because AI can clone features but not user relationships.
“there is a flood of competition from other startups, incumbents, and all the huge platforms like Google and Microsoft.” — 3 Waves of Successful Generative AI Startups
“First, build your bailey, then your motte. This will maximize your speed early on.” — Pete Flint
“Intelligence can clone your features overnight. It cannot clone your users' relationships with each other.” — Omri Amirav-Drory
“The key is knowing when to fight in the bailey and when to build the motte.” — Pete Flint
A sharp explanation of why a barrier just fell and a window just opened — NFX believes generative tech opened a Cambrian explosion and that the window closes in months, not years. They reward founders who can articulate the platform shift and the urgency to move immediately.
“It's an old story in technology: the barriers go down, and boom…Cambrian explosion. We are in the early innings, but Generative Tech is a thing now.” — Generative AI Begins
“This window will close in months, not years.” — James Currier
“The recent availability of open-source alternatives to proprietary generative AI models from Open AI is what caused it to tip wide open in the last 6 months.” — James Currier
“If Web1 was 'read only,' and Web2 is 'read-write,' and then Generative Tech is 'read-write-generate' then that makes Web 3 'read-write-generate-own.'” — James Currier
A reasonable raise covering 18-24 months of runway, with valuation deprioritized until the rest of the story is solid. NFX coaches founders to run a fast, momentum-driven process that stokes FOMO and assuages investors' fear of looking stupid. The ask should be framed to seem reasonable and the close should be quick.
“Requested investment should provide at least 18-24 months of runway.” — The Non-Obvious Guide to Fundraising
“it's better for this to be lower than your maximum desired amount, as this makes the ask more reasonable” — The Non-Obvious Guide to Fundraising
“Valuation is important only after you work out all the rest.” — The Non-Obvious Guide to Fundraising
“The ultimate FOMO sentence, however: 'I have a term sheet that I need to decide on quickly.'” — The Non-Obvious Guide to Fundraising
“Pitching is a performance.”
“you need multiple short-term and long-term defensibility strategies.”
“For a startup, understanding VCs' mindsets is often as important as understanding the mindsets of your customers. With no capital most Founders will not win, so you'd better learn the language.”
“Intelligence can clone your features overnight. It cannot clone your users' relationships with each other.”