Side A, Side B: Capital and Connection on Repeat

School Bulletin #23 explores how every cycle spins familiar tracks, but this summer two stood out: family offices stepping in as balance sheet investors, and AI bending the limits of human connection.

Intro (Opening Track)

Every album starts with a track that sets the tone.

For me, this summer kept returning to two themes.

The first is about capital. Family offices are not just seeking access; they are stepping in as balance sheet investors, reshaping how emerging GPs raise capital and how deals are executed.

The second is about connection. Dunbar’s number has set a limit on the number of relationships we can authentically maintain. AI (like with most things in this human experience) is starting to bend that curve, and the next decade may belong to those who can use it without losing their human edge.

Both shifts raise the same question: how do we evolve models and mindsets fast enough to keep up?

Side A: Track 1 — The Return of the Balance Sheet Investor

Venture capital is often described as a club (or to some a cartel). To me, it has always been more like golf. From the outside, it looks easy. You swing a stick, you hit a ball, you chase it until it goes in the hole. How hard can it be? People don’t even look that athletic.

Ask anyone who has played seriously, and they will tell you. Golf may appear simple, but it demands mastery of intricate details, from swing mechanics to mental resilience. Venture is the same. Outsiders think it is just picking good great companies. Insiders know it is one of the hardest asset classes to practice consistently.

That is why the shift happening now with family offices is worth paying attention to.

The Family Office Surge

In this cycle, I have heard the same thing repeatedly: family offices want to invest directly. They want intimacy, ownership, and access. They want to hear from the founder, review the memos, and understand why a GP passed on one deal but heavily invested in another.

It is not just a preference. It is a structural move. With institutional LPs retrenching (or maintaining relationships), family offices are stepping in. They have generational time horizons, flexible mandates, and the capital to seed managers or lead co-investments. Many of them are thinking and acting like balance sheet investors of the old merchant adventurer days.

This is not a small wave. It is reshaping how emerging managers raise and how deals get done.

The Anchor Model

I feel it in my own work. I’ve been quietly developing an investment structure I call Stress Test. It borrows from the ‘fundless sponsor’ model in private equity but adapts it for venture. The logic is intimacy with LPs, defined strike zones, and conviction capital. If you want to learn more, email me.

That intimacy is exactly what many family offices are searching for. They do not want pooled exposure. They want to be true partners.

The Limits of the Shift

But here is the nuance: Venture Capital is still golf. Even as families swing harder into direct investing, they will eventually feel the difficulty. It takes more than conviction and capital to consistently win. It takes time, teams, networks, and judgment built over years.

I believe the pendulum will swing back. Family offices will maintain a direct strategy, but many will return to fund investing and fund-of-funds strategies to find more opportunities at the venture alpha level. They will realize that the time and expertise required to do this right cannot be matched one-to-one with dollars.

That does not mean the balance sheet era is a fad. It means the models will need to evolve. Fund managers and FoFs cannot stay static. They must design new structures that respond to what families want: intimacy, transparency, and alignment.

A Sorting Mechanism

In the end, this is a sorting moment. The families who stick will be those who combine intimacy with humility. The managers who thrive will be those who adapt their models without losing discipline.

For emerging GPs, the lesson is clear: know your audience. If you can speak the language of the balance sheet, you can build conviction partnerships that last. If you cannot, you will get bypassed.

The return of the balance sheet investor is not just about families stepping in. It is about how the whole venture stack responds.

Golf looks easy. Venture looks easy. Neither is. However, those who continue to show up, practice, and refine will ultimately separate themselves.

Side B: Track 2 — Beyond Dunbar: Expanding Human Networks with AI

One of the most repeated ideas in network science is Dunbar’s number. The claim is simple: humans can only maintain about 150 meaningful relationships at a time. It is an evolutionary limit, rooted in how much context and memory our brains can handle.

For most people, 150 is more than enough. For venture capitalists, it is a cap on opportunity.

My Own Fascination

I have been fascinated with networks since the beginning of my career. I saw the difference firsthand between my own public school background in the South and the parochial and boarding school backgrounds of my college friends. Networks opened doors. They determined internships, interviews, and even confidence levels.

That fascination led me into equity research. It led me into my first startup, a failed attempt at building a better relationship platform using predictive analytics before the tools were ready. It has carried me into every season since.

Today, with Stresswood, it is still at the center. My superpower is connecting dots across worlds that usually don't intersect. But here is the reality I have come to accept: no matter how intentional I am, no matter how many flights I take or notes I jot, the human brain caps out.

150 is not enough for this work to consistently produce industry-leading returns. That’s top decile not top quartile.

Breaking the Limit

Here is the opportunity of this moment: AI gives us a way to push beyond Dunbar.

Not in a gimmicky way. Not by replacing authenticity with automation. But by using technology to extend what we already do best.

That is what I am tinkering with in Replit to create something I call Constellation. For $200 and nine days of work, I hacked together a system with my CRM (clay.earth), Notion, and an LLM to surface contacts, track context, and suggest timely reconnections. It is duct tape today, but it works like an informed 8-year-old. And it gives me energy because it amplifies my strengths rather than just patching weaknesses.

The 10x Advantage

Think about what happens when a GP can manage not 150 strong ties but 1,500. Think about what happens when LPs can map emerging managers in real time. Think about what happens when founders can intentionally maintain their investor networks at scale.

The compounding effect is enormous. Relationship arbitrage becomes more valuable than ever. Analogies and connections across industries multiply. Insights surface faster than the market can price them.

This is not science fiction. It is already happening. The people experimenting with network intelligence today are defining the playbook of tomorrow.

Intentionality Still Wins

The risk is obvious: technology makes it easy to spam, to fake, to stretch past the point of authenticity. That is where intentionality matters. AI should not be replacing empathy or presence. It should be reinforcing them.

The winners will not be the ones with the biggest databases. They will be the ones who use AI to preserve their humanity in more places simultaneously.

The next great edge in venture will not come from who has the biggest checkbook. It will come from those who can push beyond Dunbar’s curve without losing the soul of authentic connection.

We are entering an era where human capital markets will be transformed, just as the introduction of leverage transformed financial markets.

The question is simple: are you still capped at 150, or are you building the intentional systems that will let your network compound at scale?

Outro (Closing Track)

Every album ends with a track that lingers.

Both of these essays land on the same refrain: the models and limits we inherited are breaking. Families are rewriting LP norms. AI is rewriting human ones.

That can feel unsettling. But it also opens the space for those willing to experiment, improvise, and build new playbooks.

The needle keeps spinning. The next side has not been pressed yet.

with gratitude,

Earnest