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ai coding platformscursorventure capital strategygrowth equity investingfounder-investor relationshipsmulti-stage investingai market expansion
Miles Clemens from Exel Growth argues that reports of Cursor's death are greatly exaggerated, defending the AI coding platform against recent criticism from prominent investors who claim users are switching to competitors like Claude Code. Clemens discusses why Cursor has become the dominant battleground in AI—combining quick time-to-value with durable, compounding value—and explains the investment thesis behind backing it as a potential platform company for engineering, similar to how Salesforce dominates CRM. The conversation explores broader themes in venture investing, including valuation frameworks for AI companies, the importance of founder conviction, and how traditional growth metrics can obscure underlying business quality.
Key takeaways
•The AI coding market is expansionary, not zero-sum; both Cursor and Claude Code are capturing new developer cohorts and expanding consumption rather than stealing from each other.
•Cursor uniquely shines on two critical dimensions: immediate time-to-value (developers become 10x more productive within hours) and durability of compounded value as teams adopt it, making it the vertical battleground in AI.
•The best way to evaluate AI companies is understanding their time to value and value durability; legal AI and accounting AI have slow adoption but transformational durability, while early-stage coding tools had quick value but collapsed when durability evaporated.
•Multi-model support is a strategic advantage because 50% of developers switch model families daily and 95% switch models daily, allowing Cursor to become an index of AI innovation and benefit from every improvement in underlying models.
•Being off on revenue predictions by orders of magnitude (predicting $300M, hitting billions) should shift focus away from financial metrics toward understanding product-market fit and the quality of founder vision and execution.
•In high-growth venture, investing is both art and science—the science is proper valuation and the art is knowing when to break your own rules; success requires embracing nuance rather than extreme positions (AI maximalism vs. waiting for a cooldown).
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