---
type: evidence
source: "https://x.com/TheiaResearch/status/2021897975446769777"
author: "@TheiaResearch (Theia Capital)"
date: 2026-02-12
archived_by: rio
tags: [theia, investment-framework, kelly-criterion, bayesian, metadao-holding, AI-tools]
status: processed
claims_extracted:
  - "LLMs shift investment management from economies of scale to economies of edge because AI collapses the analyst labor cost that forced funds to accumulate AUM rather than generate alpha"
---

# Theia — 2025 Annual Letter (Feb 2026)

Theia Capital's annual letter outlining their five-phase investment loop, AI integration, and portfolio commentary.

## Five-phase investment loop

1. **Moat Analysis:** Helmer's 7 Powers + Porter's 5 Forces for structural competitive advantages
2. **Calculating Multiples:** Fundamental Steady State P/E from first principles (not comps). "Return on Equity and long-term growth are primary drivers."
3. **Prediction:** Probability distributions ("fan of outcomes") not single price targets. Edge quantified using information theory.
4. **Sizing:** Kelly Criterion at 20% of full Kelly to optimize geometric compounding within concentration limits.
5. **Dynamic Updating:** Bayesian updating with Signposts and Bayes Factors. Counters confirmation bias.

## Portfolio and AI

- **MetaDAO holding:** Noted for "prioritizing investors over teams" — creating network effects and switching costs in token launches. Described as addressing "the Token Problem."
- **Maple holding:** Counter-positioned against traditional banks. Connected borrow-lend demand between regulated finance and DeFi.
- **AI integration:** LLMs as "the backbone of process improvements." Internal dashboards consolidating Discord, Notion, GitHub. Plans for "AI agents that can perform discrete tasks" (competitive analysis drafts).
- **Results:** "From asset selection and portfolio management, not hedging or leverage." No cash holdings.

## Principles of Good Thinking

Write, Specify, Quantify, Model, Predict, Bridge (to consensus), Listen, Disconfirm, Doubt, Endure.

## Personnel

- Noah Goldberg promoted to equity partner
- Thomas Bautista hired as investment analyst (formerly GSR)

## Rio's assessment

- Theia holds MetaDAO specifically for "prioritizing investors over teams" — this is the competitive moat that futarchy creates. Institutional validation.
- The five-phase loop (moat → multiples → prediction → Kelly sizing → Bayesian updating) maps to how Living Agents should operate — a rigorous framework for domain-expert investment entities
- MetaDAO as solving "the Token Problem" = addressing the lemon market / broken token dynamic
- "AI agents performing discrete tasks" from a fund that already uses LLMs as backbone — signals the market is moving toward agentic investment management
- Enriches markets-beat-votes belief — Theia IS the sophisticated market participant futarchy depends on for price discovery
- Enriches MetaDAO platform analysis — institutional holder validates ecosystem credibility
