Niko Bonatsos, an early-stage investor who invested in companies like Discord and Mercor, is leaving General Catalyst to form a new venture capital firm. The shift highlights a shift among brand-name venture partnerships as the firm he has left behind broadens its mission beyond traditional VC.
A Veteran Investor Hits Refresh With a New Venture Path
Bonatsos described the exit as one that was mutual and positive, saying he had amassed plenty of learnings from his time at General Catalyst across two market cycles. He has yet to name his firm or officially begin fundraising, and says he has a small circle of collaborators comprising elite operators and investors. The focus on practitioner partners follows a broader industry shift to operator-led funds that promise “skin in the game” and intensive product and go-to-market support.
His portfolio ranges from breakout consumer and AI-adjacent bets — like an early role supporting Discord, the social platform with a huge global user base and valuation widely reported in the tens of billions, and Mercor, which was founded by college dropout Brendan Foody. Those wins solidified Bonatsos’s reputation for spotting ambitious founders early and leaning into fast-moving consumer behavior.
Thesis Spotlights Young Founders And The Overlooked Consumer
Bonatsos says he also intends to prioritize young founders, an approach he maintains was in place at the firm before it was trendy. Although high-profile AI companies tend to be founded by industry veterans, the wildest frontier of the AI wave is crammed with younger builders spinning up agentic tools, creator platforms and new marketplaces. Academic and industry research has long found that breakthrough entrepreneurship is not age-bound per se, but early-stage dynamism tends to be on the younger side in fields where new consumer habits or distribution refresh quickly.
He also spotted a contrarian bet in consumer investing. As enterprise AI ate capital, many generalist funds began to pull back from consumer social, fintech-lite tools and new media apps. PitchBook and NVCA data through 2023 revealed that late-stage enterprise deals overtook dollars, and seeds held up in volume, creating greenfield space for consumer experiments. In history, consumer hits have come in waves — at the time of platform changes particularly — and AI-native experiences might be one such trigger for new waves.
If you believe the new firm can bring tight product rigor and distribution know-how, then it may be able to position itself with a less amplified cap table at the very early stages. In recent years, founders have combined equity with non-dilutive instruments, used price shocks and growth to prove before being able to secure larger rounds. This dynamic also benefits investors who can help teams translate early traction into sustained engagement and revenue — not just vanity metrics.
General Catalyst’s Bigger Playbook Persists
The exit also comes as General Catalyst refocuses itself as an “investment and transformation company.” In addition to its primary venture funds, the firm has created a wealth management subsidiary, a playbook for private equity–style rollups of AI companies and the Customer Value Fund that provides non-dilutive financing based on recurring revenue. That mix is a reflection of founder demand for financing solutions throughout the lifecycle, not just priced equity rounds.
Seed is still an active lane at the firm, even with the bigger model. General Catalyst just hired Yuri Sagalov — operator-turned investor and former YC partner — to lead U.S. seed investing, indicating ongoing appetite for pre-product and early product-market fit even as the platform itself expands.
What to Watch as the New Firm Takes Shape
First-time VC vehicles in the present market have tended to upsell more slowly, with limited partners concentrating commitments and extending diligence. According to industry tracker Preqin and Cambridge Associates more broadly, there has been a flight to quality amid an enduring niche for specialist operator-led seed funds. Expect Bonatsos’s inaugural firm to center around a focused portfolio, significant company-building help and a check size that can be flexible at pre-seed and seed.
On sourcing, the Discord experience provides a playbook: Look for communities before they appear to be businesses and then help the founders productize emergent behaviors. On company-building: The Mercor investment highlights a willingness to back atypical profiles when velocity and signal are both clear. As it formalizes a network of elite operator advisors, the firm might be able to compact some early iteration cycles for portfolio teams chasing AI-native consumer categories.
For founders, the learnings are practical. Capital is still founder-friendly, but differentiation is now coming more and more from active investors who can help with distribution strategies, data leverage, even monetization by the time you launch. Bonatsos’s next act will be to see if a concentrated thesis on young founders and underpriced consumer plays can outperform while the rest of the market rushes into enterprise AI.
