Nepo Babies Are the Most Underpriced Founder Demographic in 2026
Priyanka"The most underappreciated founder demographic in New York City in May 2026, according to one of the most contrarian VCs in the country: nepo babies. Not the ones who inherit the family business. The ones who don't."
That's David Weisburd quoting Niko Bonatsos, formerly of General Catalyst (15 years, Discord, Snap, Mercor) and now founder of Verdict Capital, a new $300M seed/Series A fund focused on Gen Z founders. Bonatsos is one of the few VCs whose contrarian calls actually paid out across multiple cycles. When he flags a mispriced demographic, it's worth a closer look.
The trade is simple: in an AI cycle where the model is commoditizing, access is the moat. And nepo-baby founders have been compounding access since age 12.
Why this is contrarian
For a decade, the prestige VC narrative has been the immigrant kid in a garage. Correct call, and correctly priced -- everyone is already paying up for that founder. The mispriced trade in 2026 is the second-gen operator with a chip on their shoulder and a private rolodex they refuse to use the easy way.
Bonatsos's filter is sharp: not the ones who took the family job. The ones who explicitly didn't. That's a signal, not noise. They've already opted into status risk inside their own family.
Why now
1. Product is cheaper than ever to build.
We covered this last week in "The New Studios Aren't Studios" -- one operator, three subscriptions, a phone, real political outcomes. Spencer Pratt ran a one-person political content operation after the Palisades fire and racked up tens of millions of views. If the bottleneck is no longer engineering or capital, it moves to distribution and trust. Those are the two assets nepo-baby founders inherited whether they wanted them or not.
2. Distribution is relationship-gated.
First 100 customers, first podcast appearance, first Fortune 500 pilot, first AngelList syndicate, first family-office check. AI does not shortcut a warm intro. It makes the warm intro more valuable, because everyone is now drowning in cold AI outbound and the human relay is the only filter that scales.
3. Capital formation has bifurcated.
The Sequoia/Founders Fund/General Catalyst seed checks go to about 200 founders a year. Verdict-style seed checks go to a few hundred more. Below that, raising is a slog of family offices, syndicates, and high-net-worth angels -- exactly the network nepo founders grew up inside. The "earned access" filter is the whole game at sub-$10M rounds.
Three places this trade shows up
1. Consumer and lifestyle brands.
Taste and rolodex compound. Verdict explicitly calls out consumer and gaming as deeply undervalued in 2026. The DTC playbook of 2018 (paid Meta + Shopify) is dead. The new playbook is celebrity-adjacent organic distribution. Rolodex eats CAC for breakfast.
Examples already running this trade: Chamberlain Coffee (Emma Chamberlain -- her dad was in media), Item Beauty (Emma Chamberlain again), Skims (Kim Kardashian), Casetify's nepo-collab ecosystem, Poppi's celebrity cap table, Erewhon's endless line of founder-adjacent SKUs. Less obvious: a growing class of NYC-based food, fashion, and wellness brands whose founder lists read like a Spence/Dalton/Brearley directory.
2. Fintech, wealth, and family-office tooling.
They grew up inside the customer. The trust networks that make these companies hard to break into from the outside are home turf for a second-gen founder. Compound (wealth tooling for tech operators), Arta Finance, Masterworks (Scott Lynn -- art world insider distribution), Public's celebrity cap-table strategy, Allio, and a growing cohort of family-office-as-a-service plays. The customer acquisition is the dinner party.
3. Hollywood-adjacent and political AI shops.
Same access argument as last week's New Studios thesis. Promise (Peter Chernin's son in the cap table orbit), Asteria (Bria Larson + Natasha Lyonne -- Hollywood-native founders, not Hollywood-flatterers), Toonstar, MOTHER.Tech. On the political side, the new class of AI-native shops -- CampaignAI.us, Rapid Signal, Electric Twin -- are being staffed by people who grew up in the consulting class and know exactly which super PAC to call.
The honest risks
- Founder mode requires hunger. Trust-fund cushions dull it. The bet is on the ones who explicitly refused the cushion, and you need to diligence that hard.
- Reputational tail risk on LP marketing. Some LPs hate this thesis loudly.
- Survivorship bias is real -- for every successful second-gen operator you can name, there are 50 who started a hat brand and quit in 18 months.
The kicker
In 2018, "nepo baby founder" was a slur on Twitter. In 2026, it's an unpriced edge. Same way "second-time founder" was an unpriced edge in 2014 before everyone agreed it was the highest-base-rate bet in venture.
The model is commoditizing. The compute is commoditizing. The code is commoditizing. The dinner party is not.