Imad Akhund

CEO of Mercury, Angel Investor, and Venture Fund Manager

Claims

As speaker

Mentioned in

Key positions and views

AI application layers built on common foundation models have minimal moats and will face inevitable, massive margin compression as competition increases.

Current high seed-stage valuations of $20-25 million force venture investors to exclusively hunt for 'decacorns' to achieve target fund returns, making unicorn outcomes unattractive.

The ideal founder profile for investment is a serial entrepreneur who has 'something to prove,' rather than one who has already had a major unicorn exit.

The public market entry bar for technology companies has risen significantly, now requiring a valuation of approximately $10 billion to successfully IPO.

The future of business banking is the convergence of the $2 trillion US banking market and the $500 billion financial software market into a single, integrated product.

Podcast consensus on Akhund

Points of consensus

▶Akhund consistently expresses skepticism about the current venture capital landscape, particularly regarding inflated seed-stage valuations in the AI sector, which he believes are overhyped [12, 15].Mar 2026

▶He holds a nuanced view on AI, believing it will unlock massive productivity gains while simultaneously causing inevitable and severe margin compression for AI application businesses that lack a strong moat [4, 14, 24].Mar 2026

▶His investment thesis is clearly defined by a preference for serial founders who have 'something to prove' over those who have already achieved a major unicorn exit [5].Mar 2026

▶He views the future of his own industry, fintech, as a convergence of the massive US banking market and the financial software market into a single, integrated offering [21].

Points of debate

▶Akhund expresses regret over the excessive dilution in Mercury's seed round [20], yet also acknowledges raising a Series B at a 'not rational' 120x revenue multiple, which he would do again, indicating a pragmatic but context-dependent approach to valuation and dilution [1].Mar 2026

▶He describes his biggest angel investing miss as passing on Scale AI due to the founders' young age [17], which contrasts with his current, more developed thesis of backing experienced serial founders, showing an evolution in his evaluation criteria [5].Mar 2026

▶There is a tension in his view of AI's impact on labor: he foresees AI boosting engineer productivity to the point of needing more engineers for more ambitious projects [24], while also predicting that AI businesses based on labor replacement will face a race to the bottom on pricing [4].Mar 2026

▶He notes that specialized fintech funds were hesitant to back Mercury's seed round due to perceived business model flaws [22], yet top-tier generalist funds like Andreessen Horowitz and later Sequoia invested with high conviction, suggesting a divergence in how his company was perceived by different investor types [19, 23].Mar 2026

Key themes

▶Venture Capital & Investment PhilosophyMar 2026

Akhund details his transition from a prolific angel investor (350+ investments) to launching a $26M institutional fund. His philosophy centers on hunting for 'decacorns' due to high entry valuations and a strong bias for serial founders with something to prove, shaped by major wins like Truebill and misses like Scale AI.

Akhund's approach reflects a belief that founder psychology and market experience are now more critical differentiators than novel ideas, especially in a market where capital is abundant and valuations are high.

▶AI Market Dynamics and SkepticismMar 2026

Despite investing in AI infrastructure like Etched, Akhund is a vocal skeptic of the current AI hype. He argues that AI applications built on common foundation models lack defensibility and will face inevitable, massive margin compression, with pricing for labor-replacement models collapsing to a fraction of the cost.

Investors should note his distinction between the foundational layer of AI (where value may accrue) and the application layer, which he views as a highly competitive, low-margin future market.

▶The Founder's Journey & Lessons LearnedMar 2026

Reflecting on his experience as CEO of Mercury, Akhund is candid about his strategic decisions. He discusses the pros and cons of fundraising, from the 'mistake' of excessive seed-round dilution to raising a 'not rational' Series B in 2021, providing a transparent look at the trade-offs founders face.

Akhund's narrative demonstrates that even successful fundraising rounds can be viewed retrospectively as suboptimal, highlighting the imperfect nature of founder decision-making under pressure.

▶Macro-Market CommentaryMar 2026

Akhund offers several high-level predictions on the future of the tech and finance industries. He posits that the minimum valuation for a tech IPO is now around $10 billion and that it is 'inevitable' that large, multi-stage VC funds will go public within the next decade.

His perspectives suggest a belief that the private markets will continue to mature and scale, creating larger, more durable private companies and forcing traditional financial structures like VC funds to evolve.

Source episodes

Timeline

2016

Began his prolific angel investing career, which would eventually total approximately 350 investments [11].

2016-2021

Made a successful angel investment in Truebill, which provided a greater than 30x return upon its $1.25 billion acquisition [3].

Approx. 2017

Passed on investing in Scale AI's seed round, a decision he later called his biggest miss, because he believed the founders were too young [17].

Mercury Seed Round

Raised $6 million at a $23 million valuation for Mercury, led by Andreessen Horowitz. He later reflected that this was a mistake due to excessive dilution [19, 20].

2021

Mercury raised a $120 million Series B at a 120x revenue multiple, a valuation he now considers 'not rational' [1, 2].

Post-2021

Launched his first institutional venture fund, raising $26 million to invest in approximately 60 companies with an average check size of $150,000 [9, 16].

Suggested prompts

How does Akhund's experience raising a 'not rational' round for Mercury inform his current skepticism about AI seed valuations? &nearr;What is the central tension between Akhund's belief in AI's productivity gains and his prediction of massive margin compression for AI companies? &nearr;How has Akhund's investment thesis evolved from his early angel investing (e.g., passing on Scale AI) to his new institutional fund's focus on serial founders? &nearr;Given his view that the IPO bar is now $10B, what are the implications for Mercury's long-term strategy and potential exit pathways? &nearr;

Key concepts

Venture Capital 11 ep Startup Valuation 7 ep AI Business Models 5 ep Mercury (company) 10 ep Angel Investing 5 ep Fintech 4 ep Founder Psychology 2 ep Market Dynamics 6 ep

Notable quotes

“you know we did our series B at 120x which was not rational This is 2021 But we did it and I would do it again”

Imad Akhund · 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund

“the reality is once you have a competitive market dynamic, like the actual margins are going to compress massively and we'll end up on like a 10th or maybe even a 20th of the labor cost as like actual eventual revenue.”

Imad Akhund · 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund

“I saw scale AI and I was like, OK, you know, like good idea. But these people are so young. I think they were like 19 and 20 at the time or something. ... And I was just so wrong because obviously those, yeah, they proved me wrong.”

Imad Akhund · 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund

“if your entry price is like 20-25 mil, after you get that dilution, unicorn, sometimes it's like, I've seen as low as like 8x return from like a seed stage investment to unicorn, which I'm like, this is awful.”

Imad Akhund · 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund

Report last updated: Apr 21, 2026

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