The median sized round of an AR/VR/3D startup raising in Q1 2024 is between $2M to $4M according to Crunchbase, signaling the majority raising right now are at the Seed stage.

This is in stark contrast to A.I. startups which have seen 298 funding rounds announced in Q1 2024 with the majority of round sizes between $20M to $40M.

However, AR/VR is still very much alive thanks to Apple's new device, and the Quest 3 (and Orion) announcements from Meta. And there are some healthy late stage AR/VR/3D startups proving that; Rec Room, FitXR, Obsess, Anduril, Red 6, Hexa, Osso, Augmedics, AppliedVR, VRchat, and a handful of others amongst the elite.

Back in 2018, I wrote an article for VentureBeat highlighting the VC investor perspective on AR/VR, and even back then my focal point was, ‘’What will Apple do?’’

So you could only imagine my excitement when my Apple Vision Pro headset was scheduled to arrive February 2nd (the very first day it was available to the public). Texting my network back in February, I telegraphed to them that if I am confident in the hardware then I’ll put in the first LP investment check myself and go raise a venture fund for AR/VR.

I felt this Apple device was going to change my life, and the life of all the 100s of AR/VR founders I had met over the years. I could hardly sleep the night before the unboxing. I leapt out of bed at 6:00 AM and ran to my desk. Turned on the webcam. And started to open my device…. This was it, the moment I had been waiting for since 2015!

I imagined this product would be just like any other Apple product…..

Sleek design, functional software, and incredibly innovative…..

I ripped the box open, and there it was........

Apple Vision Pro was gorgeous……….

The AVP shined like chrome on a car……

I reached out to touch it….

Lifted it out of the box…..

And immediately. my face turned from a smile to a frown....

I have used 10+ headsets over the years (DK 1, DK 2, Samsung Gear, Oculus GO, Vive, Vive Pro, Quest 2, Quest Pro, etc…), so when I picked up the AVP, I could sense something was wrong. The device was heavy. In fact, the first headset I ever tried in 2015 was the Oculus DK 2 and that weighed 1.1 lbs… so why did this Apple Vision Pro in 2024 feel like it weighed more? Well… it did. The AVP device is 1.5 lbs, it weighed more than the first headset I tried 9 years prior. Yes, of course that DK2 device was PC connected with many wires and less tech, but still, it's been 10 years and the market leading device has somehow gotten heavier?

My heart sank. This was not a good sign. Ignoring that, with the camera still rolling, I put the headset on. In traditional Apple fashion it had an amazingly clever pulley system to tighten the strap around your head. I was impressed with that concept, but again, I couldn’t possibly ignore how uncomfortable this thing was on my face.

The device asked me, “do you want to sign in with your iPhone or sign in manually?” I was excited to learn how to type on this device, so I selected manual. Mistake. Huge mistake.

The next 5 minutes I spent trying to squint through the Apple headset in order to read my iCloud ID password from my iPhone. Straining my eyes, and unable to make out if that was a ‘q’ or a ‘d’ I quickly learned that the fidelity on this device wasn’t clear enough to be able to read my iPhone. My eyes hurt, a lot.

I had to take it off. I was so uncomfortable. Wanting to solve my own problem, I tried different combinations of straps, but nothing helped. This experience was not headed in the right direction. I finally signed into my iCloud on the AVP, and that’s when the magic began. The User interface was something I had never before seen. I could control the entire device simply by using my eyes, pinching casually my fingers, or waving my hands in space as if I had magical powers. It was inspiring, and felt like the Apple team truly approached the UI/UX problem from first principles.

But, my eyes were seriously hurting. My hair was messed up. My face felt uncomfortable. I loved what I experienced mentally, but my physical experience was sub par. I took it off, and I called Apple Customer Service to ask, “can I return this and get my money back?” And just like that it was over. I waited 10 years to try the future, but within 10 minutes I knew v1 wasn’t it.

Unlike most of the YouTubers who are publishing marketing content for clicks, I GENUINELY CARE about AR/VR. I have spent every week of my life for the past 9 years helping to build this industry. We were all waiting on Apple to deliver something extraordinary. There’s a famous story about Steve Jobs telling his engineers, “if you can’t figure out how to fit all of this tech inside of this little portable Mac then I will find someone who can.” It seemed Apple had skipped that process with this Spatial computing device. I felt like my dreams of raising a venture fund for AR/VR had been crushed. I couldn't work that day. What made this entire experience worse, was that every time I opened up X or Instagram or LinkedIn there was a new person going viral for showing off the fact they could afford a $4K price tag. Over the next 2 weeks, I watched as YouTubers with no credibility in XR grew their following massively as they pretended to use this device. But I knew the truth, I had seen this unfold before, this device wasn’t comfortable enough to replace your computer. Could you use it on a plane? Sure. Are there 1-2 hour sprints where you could use it? Sure. But, it wasn’t going to replace my laptop as I had so dearly been wishing.

The next two weeks were full of silence. I was sad to talk about my true feelings for this device, not only sad, but I was afraid. Scared that the industry would get upset with me for expressing negativity. Scared that people who I had helped build this industry with over a decade would think, “he’s not a developer. He doesn’t get it.” But as a consumer, and a former venture investor specific for AR/VR, I was crushed. I needed a break, and so while everyone else was riding the hype train, I just put my head down and pondered what to do.

It took me weeks, but I reframed the situation → Apple Vision Pro v1 is just that, it’s a v1 with a lot of promise. I have survived in this industry for a decade so having Apple enter the market couldn’t possibly be a negative. They’re the greatest hardware company in human history, and maybe the greatest company ever built to date (and that’s a compliment to both Jobs and Cook who led this company through decades of innovation).

Looking back on my feelings I had back in February now that it is October 2024.. I was sadly spot on. The AVP device has hardly moved the needle because of its awful form factor.

I am ready to go back to doing EXACTLY what I did when I started working in the industry; helping XR CEO’s.

Given the truth underlying the AVP hardware and price tag, I knew raising another venture fund wasn’t the right decision. And personally, building another VR startup wasn’t something I could mentally handle (my last failure still burns). But, what if I got together ALL of the top founders in AR/VR and connected them?

I’m talking fundraising tips, investor conversations, learning who to pitch (and who not to pitch…), founder keynotes just for members, and important conversations documenting the truth about where we are in the adoption cycle. Over the last 6 months we've hosted conversations between multiple CEO’s who have each raised $20M+ for their XR business, speed networking sessions amongst CEO's who have raised $500K+, and have been joined by investors from General Catalyst, Lightspeed Ventures, and more.

If you’d like to join this group of CEOs, click this link to apply for an invite.

-Don Stein

p.s. If you know a high quality VR/AR/3D CEO who would benefit, please forward them this website so they can apply.