AngelList co-founder Naval Ravikant wrote on February 28 that pure software is rapidly becoming non-investable.

He later referred to this statement as a weakened version, originally meaning that pure software is non-investable, period. There are two reasons: those who can write requirements can piece together applications on the same day. The advancement of coding agents is rapid, and scalable, architecture-compliant software could be written within a year.

The turning point he pointed out is Anthropic's Claude Opus 4.5 at the end of 2025. He said this model can maintain tasks, complete applications from scratch, and handle tricky problems, like a fast, nearly free, always-on junior programmer. The genie is out of the bottle.

His alternative list for venture capital includes hardware, network effects, and AI models. Model training is described as new software building, valid until automated research and automated training are operational. Individual creators are said to be in a renaissance, while pure software supported by venture capital has no market.

Y Combinator co-founder Paul Graham responded that he would not say that, emphasizing that the most important aspect of a startup is the founder; smart and determined individuals can still do pure software, and he would still invest. Cresta co-founder Tim Shi added on October 7 that some software still requires knowledge of coding subfields. Tim Shi worked early at OpenAI in 2016, and Cresta is backed by Sequoia, Greylock, and a16z, with a self-reported valuation of over $1 billion.

The sellers are application companies relying solely on code barriers, while buyers are turning to computing power, hardware, and models with data loops. The event is driven by the decreasing cost of coding agents, with funds shifting from seat-based software to model training and distribution networks. Beneficiaries are model companies and vertical software with proprietary workflows, while companies whose functions can be replicated in a single session are under pressure.

Source: Public Information