M13's Carter Reum on 150x SpaceX returns, why the LA startup scene is having a 'siesta,' and where to find alpha in the AI era

M13's Carter Reum on SpaceX, AI alpha, and the LA startup scene

Carter Reum co-founded M13 ten years ago with his brother. The firm manages $2B across funds, operates out of a $400M early-stage vehicle, and runs a team of 35 across New York, San Francisco, and LA. Every investor on the team is an operator by background — by design, only one person at the firm has ever worked at a VC before joining.

150x on SpaceX

M13's most-cited win is SpaceX, where the firm invested at a $15B valuation and returned 150x. Reum's framing is that even investors who got in via SPVs at much later stages are sitting on meaningful multiples, and that SpaceX's IPO will distribute wealth unusually broadly — not to institutional endowments and pensions as an OpenAI or Anthropic IPO would, but to individual investors across YPO, Burning Man, and country clubs. That diffuse retail-adjacent shareholder base is, in his view, a structural first for a company of this scale.

“On days like last Friday when we invested in SpaceX at 15,000,000,000 and banged out 150x... In this cycle, it's innovators competing with innovators who are now competing with the most well funded innovators — Google, Microsoft. For the first time in history, they actually have the advantage.”

Finding alpha in the AI cycle

Reum's core argument on AI investing is about where the value layers actually sit. Foundational models are enormous but come with enormous competition and price. More pointedly, this cycle differs from the last because innovators now compete not just with each other but with Google, Microsoft, and the ten largest tech companies in the world — companies that, for the first time, hold genuine advantages in talent, data, capital, and technical expertise. Google entering AI is a categorically different threat than Google entering social networking.

That pushes M13 toward the application layer, but Reum is clear-eyed about the difficulty there too. The firm's cleaner recent win is Prepared, an AI company that modernized 911 call centers — still running on landlines when Prepared entered. It sold earlier in 2026 for approximately $900M. The edge was low competitive density in a vertical incumbents had ignored.

Consumer and DTC

Reum believes the next billion-dollar DTC brands will be built as AI-native companies that happen to sell a product. The math on DTC broke when Facebook acquisition costs inflated; AI brings it back into range, at least for the next two to three years. Whether M13 pursues that thesis aggressively is a separate question — a $400M fund requires base-case outcomes of $3–5B per company, so a clean billion-dollar exit doesn't move the needle. Every check needs a path to returning half the fund.

The LA "siesta"

Reum describes LA as having a siesta rather than a decline, drawing a parallel to San Francisco three years ago when everyone wrote it off. The city generated roughly $450B in enterprise value outside the largest names in the last cycle. The second and third waves of AI — in media, content, and creator infrastructure — are more likely to have LA fingerprints. He stops short of expecting a $100B company out of LA proper, though, flagging that foundational-model-scale outcomes will stay concentrated in SF. The $10–20B range is more plausible for the LA application layer.

Firm construction

M13's differentiation is a dual-team model. About 12 people deploy capital, all operators by background. A separate "propulsion team" of experienced operators doesn't invest — they work across the portfolio instead. The example Reum gives is Carl Alomar, who built DigitalOcean from pre-revenue to what is now a $19B public company, now available to M13 portfolio companies at the Series A stage when they can't yet hire a head of data or head of talent themselves. Reum is explicit that the junior talent pipeline matters as much as the senior partners — a 22-year-old out of Stanford is more likely to find the next dropout founder than a partner who's already had dinner with them.