The Twenty Minute VC"Cursor is Dead" is Total BS: Here is Why | Miles Clements
CHAPTERS
How to find real alpha in AI: time-to-value vs durability
Miles lays out a simple framework for evaluating AI companies: how fast users get value, and how durable that value remains once adopted. He contrasts slower-deploying vertical AI (legal/accounting) with “vibe coding” apps that deliver instant results but often lack staying power. Coding tools stand out because they score highly on both dimensions.
Why “Cursor is dead” is narrative, not reality
Harry presses on claims that developers are abandoning Cursor for Claude Code and that pricing will force churn. Miles argues the category is expanding so quickly that competitors can grow simultaneously rather than purely stealing share. He also notes that much of reported ARR growth is consumption-driven, not just seat-based expansion.
Cursor’s shift from IDE novelty to agent-first workflow
Miles says Cursor is misunderstood as merely an IDE with autocomplete; in reality, the product is increasingly agent-centric. He cites internal/posted metrics to argue agents are now the primary usage mode and are rapidly scaling in real production workflows. The team’s focus and execution matter more than external commentary.
Cost, model dependence, and the case for multi-model products
Harry challenges whether Cursor’s reliance on Anthropic models creates untenable costs. Miles argues Cursor’s multi-model approach is a structural advantage because developers switch models frequently and want flexibility. Being an “index” of model innovation creates a compounding flywheel: product improvements plus model improvements both raise capability.
Why building Cursor’s own models can still be rational
Miles defends Cursor’s effort to build proprietary models, framing them as specialized coding models rather than general-purpose LLMs. The goal is differentiation on professional, enterprise-grade coding tasks, not broad intelligence benchmarks. Specialized models can improve quality, control, and enterprise suitability.
Underwriting Cursor at high prices: platform ownership and “engineering OS” upside
Miles explains the upside case for investing at very large valuations: Cursor could become the first true platform company for engineering, owning a broad vertical the way Salesforce owned go-to-market. He argues prior winners (Atlassian, Datadog) captured slices of the stack; Cursor’s ambition is platform breadth. He also notes that extreme revenue growth can make traditional multiple debates feel less central.
Forecasting in hypergrowth: assumptions matter more than the plan
After discussing how far off early ARR forecasts were, Miles reframes planning as a way to encode assumptions rather than to police quarterly targets. He contrasts venture investing with public-market earnings management. The key is understanding inputs—product, pricing, segment penetration—more than variance to budget.
Do “non-15x” companies still matter? Consensus vs non-consensus and portfolio nuance
Harry argues big funds require huge exits, making slower growers unattractive; Miles pushes back that outcomes depend on many inputs beyond growth rate. He warns investors get “hammered in the middle” and argues you can win via either high-consensus leaders or differentiated, non-consensus bets with better ownership. The key is embracing nuance across stages and strategies.
Painful misses and the lesson of ServiceTitan and Rippling
Miles recounts losing ServiceTitan due to rigid pricing/multiple rules, arguing that deep market understanding should sometimes override heuristics. He then discusses missing Rippling, focusing on “marginal ease of ARR accumulation” and Parker Conrad’s ability to build compounding growth mechanisms through adjacent products. He attributes the miss to reputation drag, speed, ownership thresholds, and rule rigidity.
Coverage, win rates, and how Accel self-corrects after missing breakouts
Miles describes how Accel runs rigorous partnership reviews: identifying top private companies, scoring “investor of record” positions, and diagnosing misses. He estimates an 80% term-sheet win rate as healthy and argues losing sometimes signals you’re competing for the right deals. The discussion also covers the shrinking relevance of old benchmarks and the importance of usage intensity over headline growth.
Anthropic: underwriting mega-outcomes and the Pentagon controversy
Miles explains that a small set of private companies operate on a different plane where trillion-dollar outcomes are plausible, making late-stage participation rational. On Anthropic’s Pentagon-related controversy, he avoids specifics but praises founders for sticking to principles and mission under commercial pressure. They discuss how values-driven decisions can test loyalty, talent, and adoption dynamics.
What happens to 2021-priced companies: LBO land, tough outcomes, and founder-led advantage
Harry asks what happens to companies like Miro and Snyk that must live up to high private marks amid slower growth and repriced public comps. Miles argues many are still great businesses but may find different “homes,” often via PE buyers such as Thoma Bravo and Vista. They discuss why founder-led companies often inspire higher conviction, while also acknowledging exceptional professional CEOs can succeed.
Going public now: liquidity, currency, and the ‘sub-$5B’ trap
Miles explains why founders stay private longer: secondaries can provide employee liquidity, and M&A currency/valuation signaling can also exist privately—especially for top-tier companies. He argues the hardest zone is IPO’ing too small (roughly sub-$5B), where many companies struggle to break out in public markets. The decision to go public is increasingly about scale and clarity of growth beyond that threshold.
Liquidity decisions, evergreen funds, and how VCs should handle public positions
They debate when to take chips off the table, with Harry citing cases where selling early was rational despite company preferences. Miles says it’s situational: tenders can be smart for diversification, but long-duration compounders like CrowdStrike rewarded continued ownership through multiple stages and the IPO. On evergreen/public positions, he argues multi-stage firms should stay with outlier founders, but not every company compounds long-term.
Inside Accel’s craft: sourcing, board dynamics, and career advice
The conversation closes with practical insights: who Miles thinks are Accel’s best at sourcing, picking, and winning deals, and what makes a great board member. He emphasizes that founders don’t need micromanagement, but do benefit from a trusted sounding board for a few major “bumper decisions” each year. He ends with advice on professionalism and the importance of consistent firm rituals over time.
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