Carter Reum

Co-founder of M13, a venture capital firm.

Claims

As speaker

Mentioned in

Key positions and views

Los Angeles is a premier and underestimated hub for tech innovation, poised to dominate sectors like the creator economy over San Francisco.

Venture capital success requires a hands-on, operator-led approach that provides tangible support like talent acquisition, rather than just capital.

Investing directly in foundational large language models (LLMs) presents poor risk-adjusted returns for venture investors due to high entry valuations and significant capital requirements.

A concentrated portfolio strategy targeting significant ownership (around 20%) is crucial for generating fund-returning outcomes, which require exit valuations of approximately $3 billion.

The firm has strategically pivoted away from direct-to-consumer (DTC) investments since 2019, despite its earlier successes in the category.

Podcast consensus on Reum

Points of consensus

▶M13 has a proven track record of early-stage investing, having been a Seed or Series A investor in 15 companies that later achieved unicorn status.Apr 2026

▶The firm's hands-on support model measurably accelerates portfolio company growth, with these companies raising Series B rounds approximately 30% faster and at 25% higher valuations than the median.Apr 2026

▶M13's fund strategy has evolved to be more concentrated, now targeting a significant ownership stake of approximately 20% in its portfolio companies, an increase from 10% in a previous fund.Apr 2026

▶The firm has a history of successful early investments in well-known technology companies, including Ring, Pinterest, and Lyft.Apr 2026

Points of debate

▶Strategic Pivot: M13 built its early reputation in the direct-to-consumer (DTC) space but has deliberately stopped investing in the category since approximately 2019, indicating a significant shift away from a previously successful strategy.Apr 2026

▶Selective AI Focus: While actively investing in AI applications like the acquired company Prepared and building its own internal AI platform, Reum expresses skepticism about the risk-adjusted returns of investing in foundational large language model (LLM) companies due to high valuations and capital needs.Apr 2026

▶Escalating Success Threshold: Despite celebrating its history of backing 15 unicorns, Reum states that for the current fund's economics to work, portfolio companies must achieve exit valuations of approximately $3 billion, a much higher bar than the standard $1 billion unicorn status.Apr 2026

▶Unconventional Team Structure: M13 champions an operator-led model, with only one of its 40 employees having prior experience at another venture capital firm, a stark contrast to the industry norm of hiring from other funds.

Key themes

▶M13's Operator-Centric VC ModelApr 2026

Reum emphasizes M13's distinct approach, which leverages a team of operators with minimal traditional VC experience to provide hands-on support, particularly in talent acquisition. This model is credited for accelerating portfolio company growth, leading to faster and higher-valued Series B rounds.

This operator-led narrative positions M13 as a value-add partner rather than just a capital provider, a key differentiator designed to attract top founders in a competitive venture landscape.

▶The Los Angeles Tech ThesisApr 2026

Reum is a vocal proponent of the Los Angeles tech ecosystem, citing its $450 billion in enterprise value creation and its venture market being 10 times larger than Miami's. He predicts LA will become the epicenter for the 200-million-person creator economy, surpassing traditional hubs like San Francisco.

Reum's bullish stance on LA is a core part of his investment thesis, suggesting a strategic focus on industries where Los Angeles holds a competitive advantage, such as media, entertainment, and creator-focused technology.

▶Disciplined and Evolving Investment StrategyApr 2026

M13's strategy has matured, shifting from early DTC successes to a more focused approach on sectors like AI and stablecoins. The firm now targets 20% ownership stakes, makes 30-35 investments per fund, and requires $3 billion exits for its fund economics to work, while consciously avoiding capital-intensive LLM investments.

This demonstrates a dynamic but disciplined approach to portfolio construction, adapting to market trends while adhering to strict ownership and return criteria to ensure top-decile performance.

▶Quantifiable Performance and Unicorn HuntingApr 2026

Reum consistently highlights M13's top-decile Distributions to Paid-In Capital (DPI) and its track record of backing 15 unicorns from the Seed or Series A stage. He quantifies the firm's impact, noting portfolio companies raise follow-on rounds faster and at higher valuations, and that M13 has led rounds totaling $800 million in the last three years.

The heavy emphasis on specific metrics (15 unicorns, top-decile DPI, 30% faster Series B) serves to build credibility and showcase a history of successful early-stage bets, attracting both limited partners and high-quality founders.

Source episodes

Sentiment over time

Not enough data for timeline

Changes over time

Early Period (Pre-2019)

M13 established its reputation with early-stage investments in successful DTC companies and future tech giants like Ring, Pinterest, and Lyft.

Circa 2019

The firm makes a strategic pivot, ceasing new investments in the direct-to-consumer (DTC) category to focus on other areas.

Last Two Years

M13 intensifies its focus on experienced founders, investing in nine individuals who had previously founded unicorn companies.

Last Three Years

The firm demonstrates its ability to support portfolio growth by leading follow-on funding rounds that total approximately $800 million.

Current Fund Strategy

M13 increases its target ownership stake from 10% to 20% and establishes that portfolio companies need to achieve ~$3 billion exits for the fund's economics to work.

Recent Activity

The firm continues to invest in emerging tech, participating in a Series A for a stablecoin company and seeing an exit for its AI portfolio company, Prepared.

Suggested prompts

How does M13's operator-led model, with minimal traditional VC experience, impact its deal sourcing and due diligence process compared to established firms? &nearr;Given the stated need for $3 billion exits, what specific sub-sectors within AI and Web3 does Carter Reum believe can generate these returns, especially while avoiding foundational LLMs? &nearr;What are the potential risks and benefits of M13's heavy concentration on the Los Angeles tech ecosystem, and how might this strategy perform in a market downturn? &nearr;Carter Reum highlights top-decile DPI as a key performance metric; how does this focus on realized returns influence M13's approach to secondary markets and exit timing for its portfolio companies? &nearr;

Key concepts

M13 Investment Strategy 1 ep Venture Capital 1 ep Portfolio Performance 1 ep Unicorns 1 ep Los Angeles Tech Scene 1 ep Artificial Intelligence (AI) 1 ep Fund Economics 1 ep Creator Economy 1 ep

Notable quotes

“We've been in the Cedar Series A investor and 15 unicorns.”

Carter Reum · $1.9B AUM. 200+ Investments. 54 Exits. Inside M13

“we're top decile in DPI, most importantly, something that not everyone focuses on.”

Carter Reum · $1.9B AUM. 200+ Investments. 54 Exits. Inside M13

“We need about $3 billion outcomes to return the fund.”

Carter Reum · $1.9B AUM. 200+ Investments. 54 Exits. Inside M13

“Our portfolio companies have raised about $800 million behind rounds we've led the last three years.”

Carter Reum · $1.9B AUM. 200+ Investments. 54 Exits. Inside M13

Report last updated: Apr 21, 2026

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