Search Results

< Back the prepared mind November 2024 thoughts on generalist v.s. specialist investing Over the last decade, a majority of Venture Capital firms have chosen to define their identities through focused investment theses. As a result, two patterns have emerged: some firms have adopted a generalist approach, spreading investments across sectors, while others have doubled down on specific industries, seeking an edge in areas of deep expertise. So, which is better? The following essay dives into generalist and specialist strategies through an examination of their advantages, disadvantages, and adaptability across different market conditions and investment stages. The Case for the Generalist There are a variety of distinct advantages to being a generalist investor. These advantages can be synthesized into three categories: flexibility, broad knowledge, and access to outliers. Flexibility in investing is one of the most important advantages a generalist investor has over a specialist. Industries, themes, and trends are constantly changing and incredibly unpredictable. By being unconstrained in the industries, verticals, etc., where you can invest as a generalist, you are better suited to invest in the areas where opportunity is emerging. As Will Robins put it in his essay Why generalist investors will always win , “The eternal relevance of generalism in venture comes down to two simple and easy-to-prove facts: (1) Revolutionary tech companies are thematically unpredictable, and (2) transcendent founder talent is still needed even in the most fruitful spaces.” Generalist investors are also more immune to the ebbs and flows of different market conditions. For example, in a high interest-rate environment, a generalist may stay clear of industries negatively impacted or double down on a founder they believe can weather the storm. Specialist investors are often constrained to invest in their chosen vertical regardless of market conditions. A specialist’s capital deployment strategies are limited in flexibility, making it more challenging to adapt to market cycles. The advantages of being a generalist investor extend beyond their innate flexibility and into the scope of their knowledge. Being a generalist does not equate to being a lazy or uninformed thinker; it’s the opposite. Generalists have a broad knowledge source to pull from and can often pull together disparate themes and trends into unique insights because of their exposure to such a breadth of industries. In other words, generalist investors usually know little about a lot. It makes them uniquely positioned to deploy capital in areas where they can see opportunities, patterns, and use cases as they emerge across industries. Navigating uncertain times is generally more challenging for a specialist who draws from a narrow but deep knowledge pool. The final point of advantage for a generalist is access to outliers. The pool of investable opportunities is much more extensive for a generalist investor than a specialist. With fewer constraints, generalists have a larger pool of selection that, in theory, increases their probability of picking a winner. Specialists are expected to hit the same amount of bullseyes on a much smaller target. The Case for the Specialist Specialist investors move quickly; they know what they want and where areas of opportunity lie, bringing radical efficiency to their deal flow. A vital advantage of the specialists is their knowledge. Many specialists have spent years operating within their specified investment verticals. Conviction is high within these selected industries, and they quickly make investment decisions. A specialist knows previous market trends and cycles and who has “been there, done that.” The narrow but profound knowledge a specialist has unlocks the ability of the investor to ask the right questions and be efficient in their dealmaking process. A generalist often cannot get “in the weeds” as quickly as a specialist, leaving them reviewing deals slower in unfamiliar markets and relying on outsider insights. Outside of industry/vertical knowledge, specialist networks provide a considerable advantage to their portfolio companies. The concentrated networks allow specialists to give their founders highly relevant resources, filtered insights, and arguably the best intros to early customers, hires, or other investors. Compared to a generalist, who may be able to offer a portfolio company similar resources, but the network/connection may be different from what the founder wanted. In their specified industry, specialists have a clear case for why they deserve allocations on a founder's cap table. Specialists can point to a clear knowledge base, network, and examples of where they’ve added sector-specific value to their previously invested companies. Examples can be the difference between getting allocation in a round or not; without curated offerings, a founder may choose to add a specialist fund to their cap table over a generalist if there are no specialists in the round. The Superior Strategy Specialist investors have superior access to curated deal flow, a shorter decision timeline, and more targeted networks. It seems logical that they would outperform the generalists equipped with broader but less specialized networks and knowledge. Statistically, though, that is not the case. In 2022, PitchBook analyzed the performance of 451 VC funds across the US with vintages from 1995 to 2015 and found no significant performance differences between generalist and specialist funds after accounting for general market and industry performance. The coefficients (betas) for targeted and specialist funds reflected expected differences in average IRR relative to the generalist baseline. Still, neither significantly differed from zero, indicating performance across fund types once market conditions and fund size were considered. The report concluded that LPs "should be skeptical of any claims that industry specialization leads to superior performance.” While Pitchbook’s findings showed no significant difference in performance between specialist and generalist funds, other studies have gotten more granular on how the specific advantages of each strategy play out. Economists Paul Gompers, Anna Kovner, and Josh Lerner analyzed the performance of over 800 venture capital firms and more than 3,500 individual venture capitalists by examining the IPO and acquisition success rates of over 11,000 portfolio companies between 1975 and 2003. Their findings revealed a strong correlation between specialization and success. Specialist firms outperformed their generalist counterparts, mainly when individual venture capitalists specialize in a single industry. Generalist firms, conversely, showed poorer performance in cross-industry capital allocation and were less effective in selecting profitable investments within sectors. However, generalist firms performed equally as well as their hyper-specialized counterparts when individual investors within the generalist firm were specialists. In other words, the hyper-specialists win in equal proportion to generalist firms with partners who have some specialized perspectives. This is why Tier 1 funds have remained generalists over time. Even as fund sizes have ballooned, these firms recognized that staying generalist thematically while building small, focused teams of specialized investors could continue to drive outlier returns at any stage. Accel coined this trend as the “Prepared mind” approach, an investment method inspired by the Louis Pasteur quote, “ chance only favors the prepared mind.” Accel emphasizes proactive exploration and thorough industry research, enabling the partners at the firm to identify and dig into specific categories, tap into network insights, and track emerging trends to spot potential leaders. By the time Accel invests, the team has developed a firm conviction and alignment with the entrepreneurs, replicating a specialist fund's speed, network, and confidence without becoming one. Does Stage Matter? In 2011, Economists Sharon Matusik and Markus Fitza conducted an in-depth analysis of the performance effects of diversification in VC, focusing on 4,583 VC firms and nearly 7,500 VC firm-year observations. The researchers used data from 1960 to 2000 to examine how diversification (defined as the depth of knowledge within the firm) impacts VC performance, particularly in uncertain environments. The findings revealed a U-shaped relationship between diversification and performance. VC firms achieved higher success rates with either low or high levels of diversification, while moderate levels of diversification resulted in poorer performance. This means a super-specialized specialist performed equally as well as a generalist firm composed of investors with diversified knowledge, and those in the middle performed the worst. Matusik and Fitza also found that flexibility is crucial for both specialist and generalist funds, particularly regarding early-stage investments. High portfolio diversification in early-stage investing generated the highest IPO success rate at over 40%, with more flexibility in the early stages and more success than their less adaptable counterparts. In early-stage investments, high diversification (i.e., being more generalist) proved advantageous, allowing firms to adapt to market cycles. For late-stage investments, the impact of diversification on performance was less significant. They also found that firms co-invested with other VCs could achieve similar performance outcomes without needing high diversification, as co-investors contributed additional industry knowledge. Performance results can be manufactured by partnering with a mix of specialist and generalist investors. For this reason, founders are often encouraged to diversify their cap tables to include a mix of generalist investors, who bring wide networks and broad industry knowledge, alongside specialist investors, who offer targeted insights and valuable, niche-specific connections. Why We Choose the Generalist Path At Redbud VC, we have seen the advantages of a generalist approach flourish at the earliest stages. By choosing to be a generalist, we’re keeping our eyes open for the best talent, building solutions wherever they might emerge, whether in fintech, proptech, sustainability, or an area not yet fully defined. It’s not just about being flexible; it’s about having the curiosity and humility to say that the next billion-dollar company might come from a place we hadn’t anticipated. The advantages of being a generalist at the early stages are abundantly clear. The ability for us to have exposure to a comprehensive set of founders building in diverse industries helps increase the chances we invest in a generational company. As a small fund, we leverage the networks and expertise of each of our team members to help us replicate some of the advantages that a specialist firm has. Where we can’t, we help our portfolio companies source funds that can be the specialists on their cap tables. Given our ability to be adaptable as generalists, our team explores different industries or verticals where we want to find opportunities to build or deploy capital. For example, digging into challenges community banks face led to our investment in Braid’s Pre-Seed Round , and investigating sleepy areas in prop-tech led us to incubate Village. As we work towards building a VC brand from Middle America, Redbud is adopting our approach to investing with a prepared mind, equipping us to recognize and support outlier founders in whatever they are building. Previous Next

< Back chewing on May 2025 a running list of random things, trends and notes some of the ideas/insights i'm currently chewing on **work in progress 5/25 superior product wins in the late stage - distribution wins at all stages (esp. early) distribution is only becoming more and more paramount as software sunsets and AI becomes more commoditized (i.e. AI voice products, AI travel planners etc.) distribution will most likely win here as we move closer to AGI - what will the human experience/purpose be? 6/25 we are moving towards a fully agentic world, there is no stopping it. i don't think the next generation of $B companies will be agent service providers it will be the raw materials + manufacturing + build ecosystem that powers them. i believe there will be a regression towards "traditional" businesses with agents fixing issues that have previously inhibited these businesses from reaching scale or being too capital intensive. how do i get conviction in a company that may be completely replaced by AI? 7/25 original ideas (i.e. creativity) are more powerful than ever ideas used to be cheap not anymore can "cool" be manufactured? what does it look like to be an "essential worker" in the age of AI? 8/25 the 2nd order effects of more and more agentic AI tools hitting the market will be a 2nd wave of tools to help people manage, deploy, and scale the agentic tools from the first wave working on a hypothesis for wave #3 is it possible for a software to bring us back to being human? or is that just too ironic? 9/25 why does everything need protein in it? net new (no rev, no product) > company that has been alive 8+ months with no breakout momentum ^^ this phenomena is new for me only types of deals getting done are "net-new" or expensive + hype seed-ish co's last 2 investments were one of each 10/25 in may the bar was crazy high to be a vc-backed funded at the early stages, rn it's a founders market -- feels like these cycles are tightening and compounding. doesn't feel corrective at all just inflated, but i guess it always feels this way? building in areas where you have operated is paramount, empathy isn't enough. getting second hand insights from advisors, peers, investors, etc. is like getting hand me down clothes -- late to the trends and they never quite fit right are there any truly new thoughts or ideas anymore? i think there is an argument that this is only getting worse as ai responses are all derived from a prompt will all content, media, product, ideas, etc. just eventually become a cheap derivative of something prior? i believe "ai slop" is the early innings of this. 11/25 no thoughts just mexico travel :) 12/25 some 2026 predicitions/thoughts the Series A crunch from 2024 will have permanently reshaped Seed financing: extreme valuation dispersion, hyper-competitive rounds, as investors push to hit ownership targets earlier and earlier with the public markets performance increasingly propped up by a small concentration of AI-native companies, the AI bubble pop is coming openAI’s cash burn, coupled with spending commitments they may not be able to fund, mirrors the behavior of late-stage Enron and will result in a similar outcome nvidia will see a "crash" like Cisco in the 00’s (GPUs is to LLMs as Hardware is to the Internet). Cisco was the hardware powering the age of the internet, similar to Nvidia today. i'm not saying the company is going to blow up, okay, but I'm saying there will be a reckoning in the public markets of some kind (**working on something longer form here) 01/26 global oil sales are denominated in dollars, obviously the US is worried about that changing... the petrodollar keeps demand for USD high (some infiation of value here) Rn capital is currently being funneled into US financial and tech assets rather than physical production. As domestic growth becomes increasingly concentrated in AI, headline GDP is stabilized without rebuilding physical systems, leaving commodities and infrastructure underpriced until failure or geopolitics force a sudden repricing. (a.k.a recession) i’m not an economist, and candidly, I didn't do particualrly well in my 300-level econ courses (srry Dr. Thompson), but I’ve been thinking a lot about how AI is beginning to reshape geopolitics and the way nations prioritize assets and maintaining power ** last updated 01/02 Previous Next

< Back chobani on my jeans August 2025 becoming my cultural diet and what it means for founders Nothing screams chronically online more than walking into a grocery store, rubbing Chobani yogurt all over a stiff pair of jeans, filming it, and then posting it on TikTok. why? All because the lyrics in the song “Jeans by 2hollis” sound like he sings “put chobani on my jeans” instead of “put your body on my jeans” – viscerally different situations. Jeans became the song that framed my July photo dump on Instagram as a nod to the fact that I have seen this trend, find it funny, and ultimately, it’s become a part of who I am (in, albeit, some weird way). did this increase sales of chobani or annoyance of grocery store employees? I’ve been thinking about this a lot – how the content we consume every day becomes who we are. Humor, conversational references, restaurant choices, politics, etc. are all profoundly influenced by the content we consume and how long we let it marinate in our brains and bodies. As the internet and its culture have intertwined with our lives, it has changed how I think, act, and operate, as I believe to be true for most consumers. I think Lisa Kholostenko says it best, “consumption isn’t just passive enjoyment—it’s dynamic, it answers back.” It introduces the concept of a “Cultural Diet” that the content you consume becomes a part of you. It can lend itself to an era of your life, a fleeting Instagram photo dump, a phrase you repeat to your friends, or it can transcend chapters, inform your politics, and trickle into the core of your personality. No bigger indicator that more people are becoming a steady reflection of their cultural diets than the dialogue around taste. “Taste” — who has it and who doesn’t — is all VCs, founders, tech people, and performative matcha labubu keychain hipsters want to talk about. As defined by Emma Lou Cogan, Taste is “the byproduct of our worldview, the measure of our exposure to varied newness, & the invisible thread that ties together our emotional, psychological, and cultural instincts.” the tastemaker c.2025 I believe that taste is what evolves from your cultural diet. People focus on manufacturing taste via the content they consume. Except there is no filter for consumption. There is no way to limit the content you read, watch, and react to every day. You can curate your feeds to what you perceive to be high quality, unsubscribe from newsletters, mute accounts, and follow only those you know, but the flood never really stops. Algorithms surface “related” posts, friends forward viral clips, group chats ping with whatever celebrity look-alike contest is happening at your local park this week, and billboards replay the same slogans as you commute. In an ecosystem where the internet and reality are divulging more and more, content behaves like background radiation: it seeps through every filter, ensuring that the endless stream of headlines, hot-takes, and ads still becomes part of your cultural diet whether you consciously invite it to be or not. eating good Vice versa, if you’re always feeding yourself content that feels good, is comfortable, and is familiar, it’s like only eating Big Macs; you feel wonderful when eating it, but slow, sluggish, and left behind in the tides of conversation when those who have tried salads, soups, and sandwiches come around and reference another world of taste. You are what you eat. This leaves a question for founders building their companies today: how do you become a part of people’s cultural diets? It’s a more fun way of saying distribution matters. How you distribute (feed) your product into your consumer's cultural diet (the content they consume) determines how quickly you can move. Distribution is becoming increasingly paramount as certain product features, data, and previously “moats” are becoming commoditized. The company that most rapidly incorporates itself into its customers’ cultural diet, so convincingly that consumers experience the product as an extension of their own identity, unlocks a flywheel in which every operational building block (distribution, retention, pricing power, and brand equity) compounds at an accelerated rate. It happened with Lovable (0 to 2.3M users in 8 months) by making “vibe coding” part of the engineering zeitgeist. Rhode (0 to $1B acquisition by e.l.f in 3 years) by bringing a high-fashion lens to affordable beauty. Ramp (0 to $22.5B valuation in 6 years) by embracing the “underdog” narrative online and making something people hate (expense reporting) actually enjoyable. normalize slapping timothee on a billboard with a logo Each company’s story is now inescapable. Scroll a feed, open an email, cue up a podcast, each touchpoint repeats who they are, what they build, and why it matters. The product becomes a piece of their unique customers' unique diets. Ultimately, distribution is not only a question of reach; it is a matter of incorporation. When a product, message, or idea slips unnoticed into the daily cadence of alerts, shortcuts, and inside jokes, it migrates from the marketplace into the cognitive architecture of our brains and ultimately influences who we are. The push-notification that triggers a reflexive glance, the reference that needs no explanation in conversation, these are signals that a product has been metabolised, not just adopted. In that sense, market penetration is inseparable from identity formation: what saturates our attention steadily rewires our assumptions about efficiency, status, and even community. That realisation imposes a dual responsibility. For founders, the task is to design a product capable of that tenancy. For the rest of us, the question is curatorial: which inputs do we allow to occupy our limited cognitive real estate, and to what end? ___ Building to become apart of your consumers cultural diet? Drop me a line maria@redbud [dot] vc Previous Next

< Back y2 June 2025 “self”, obsessive thinking, punching upwards, and not getting lost in the sauce Today marks two years at Redbud VC . Whenever a big “milestone” or marker rolls around, I catch myself feeling both nostalgic and reflective. It’s so easy to get lost in the day-to-day of the calendar; there’s not much time for quiet thinking on patterns, behaviors, and decisions. That said, I have been deliberating on what I want to share here, and I decided, in lieu of being tactical, I’m going to be a bit more spontaneous. My candid thoughts on a few themes across my 24-month tenure as an investor below. ___ “Self” I think Emily Herrera, former VC @ Slow & Night, said it best : “You made it - which means you’re starting to think long-term about What you like Who you like Who you are” This is the perfect summation of what it means to have worked in VC for two years. It is frankly exactly where I stand today. I spend a significant portion of my time thinking about those three things, and oftentimes, it feels like they’re always changing. As you start to build a circle of competence in an area, you inevitably become increasingly jaded about the value or outcome of a particular industry or trend. Candidly, it’s weird to be expected to be a pseudo “expert” on 10 million technologies at once. Like I’m supposed to know about “application layer AI, trends in food for consumers, emerging SaaS categories, defense contracts, etc.” I think that's why Emily’s three categories are so important – they allow you to narrow your aperture for opportunities. It takes a bit of the industry-imposed pressure off. While I’m still working on answering the above, one thing I have figured out is how to ask the easy questions. I think that good founders can smell BS a mile away, they know if the VC they are talking to gets their business or not. I want founders to know right off the bat if I understand. I often ask “easy questions” (i.e., explicitly asking “how does this work?”) and repeat information/process as I understand it for founders to correct my understanding of their companies. The questioning, coupled with the regurgitation of information, helps me not only understand the company and founder sitting right in front of me, but I believe it will help me answer Emily’s questions above. ** (Will check back to see if this is really how it goes down next year) Obsessive thinking In my opinion, the best and worst thing about being an investor is that you are always thinking. I feel always on, in a way. I like to spend my weekends taking long walks on the lakefront in Chicago. As I was walking early last week, I saw a sad little Lime scooter that had been tossed into the lake. I counted 3 Lyft bikes and 2 Lime scooters during my walk. All I could think about was how the company deals with damaged or unusable bikes/scooters: “It’s not super scalable to try to send a technician out to see what's wrong with them.” “This has to be written off.” “What percentage of inventory is written off like this?” “I wonder if anyone is building a better fleet management system for these bikes?” “Is that market even big enough, though?” Yep, always on. The great part about this is that venture rewards unfiltered curiosity. The not-so-great part is when you’re Googling what startup makes the QR code checkout system on your restaurant table, and your friends are discussing weekend plans without you. Punching upwards I love being overlooked. It’s a quintessential part of my intrinsic motivation. I’ve spent my entire life being overlooked and proving out. It would be radically uncomfortable (in a bad way) for me to be in 1st place from the start. I prefer to work to win. For two reasons: There’s no pressure when you are the underdog. You’re not expected to be great. The wonderful part is that you get to work hard, hustle, and ultimately, if you're competitive, you win. No one gave it to you, and it wasn’t expected. Winning when standing at a “disadvantage” sets a precedent that you have the grit and determination necessary to win in any environment. When you’re junior on a team or at a small firm, you need to produce. It’s all hands on deck to do a bit of everything. Where you spend your time is critical. I realized this as I spent a better part of Year 1 getting bogged down in non-high-value tasks and the day-to-day. I’ve found the best ways to produce for your firm and your portfolio companies are: Sourcing a new company for the firm to invest in Making customer, investor, or talent intros for your portfolio companies Diversifying your firm's network of investors, founders, and LPs spoiler: all this takes is hustle and a bit of shamelessness At Redbud, sourcing a customer for a portfolio company is an equal win to sourcing a company for the firm to invest in. It’s easy to sell why a founder should take your money when you have examples of real value you’ve been able to add (i.e. customers). Lost in the sauce There’s a lot of noise in venture and startups. People are constantly sharing what they’re doing, how they’re working, and what they’re working on. (Ironically, as I do here) There’s always pressure to be doing something, which, when everyone is always talking, creates noise. If you’re not careful, you can get lost in the sauce . As I see it, the sauce is the lethal combination of natural noise, a myriad of weekly events, your day-to-day calendar, firm expectations, pressure of never missing an opportunity, the list goes on…see how easy it is to get lost. It’s essential to limit the amount of sauce you are in at any given time. I do this in 3 ways: Staying focused – remembering that my job is essentially the three bullets on producing above Being honest – combating the constant culture of flexing with kindness, honesty, and vulnerability, where I can Having a community – a handful of investors that I share my failures and successes with, and text multiple times a week ___ It’s been a wonderful 2 years at Redbud. To the companies in our portfolio that I’ve had the chance to be an early believer in or finder of – thank you for your trust, connection, and conviction that our small/early check would make a meaningful difference on your cap table. To all the founders I’ve spoken with across time zones, stages, and industries this year, thank you for your vulnerability, openness, and courage in building something new. To Brett and Willy, thank you for taking a chance on me. Previous Next

< Back pre-traction April 2025 thoughts on legitimate ways to display traction early Lately, I’ve been thinking a lot about what traction really means at the pre-seed stage, particularly before a fully built product, paying customers, or hints of revenue. This stage is incredibly nebulous. As a founder, how do you de-risk your idea in a way that creates conviction, not just for yourself, but in the eyes of investors? It’s a tricky balance. Founders want to raise capital off the strength of their background, a 10-slide deck, and maybe an MVP. But the reality is, real traction is leverage. If you have people paying for what you’re building, even in small amounts, the path to closing a round gets dramatically easier. Still, I think there are legitimate and strategic ways to display traction that don’t rely on traditional revenue. These “pre-traction” signals can tell a compelling story about market demand and founder execution, even before a wire hits the bank. At Redbud, we back a handful of pre-seed companies each year. Almost all of them have something built (i.e., some version of an early product) and often, a few design partners or test users. But 90% of the time, there’s no meaningful revenue. Maybe a couple hundred dollars in MRR. And yet, when a company is compelling at this stage, it can come down to a strong pre-traction narrative. To me, pre-traction means early, often scrappy signals that people are willing to pay for what you’re building or at least are highly interested. If you’re launching a consumer product, maybe it’s a waitlist of 10,000 people. If you’re building a B2B SaaS tool, maybe it’s a warm pipeline of three or four design partners who’ve agreed to test and eventually buy the product. When I evaluate companies like this, I’m constantly asking: how long will it take before these early users convert into paying customers? If a founder has thought through that timeline and is willing to hold themselves accountable to it, that’s a massive indicator of clarity and conviction. It gives investors something tangible to pull on, but more importantly, it shows the founder is operating with honest constraints and urgency. Sometimes, pre-traction is rooted in lived experience or a unique domain insight. A founder might say, “I know product managers will buy this tomorrow, because at my last company, we spent $25K a year trying to solve this exact problem.” That’s not a paying customer, but it is a signal. It reflects a deep understanding of the pain and a credible path to solving it. There’s nothing more compelling than a founder who says, “I know this is real. I know people want it.” And then backs that up with a waitlist, a pipeline, or even a series of customer conversations proving demand is bubbling beneath the surface. The best founders don’t just hope people will buy; they have early evidence that someone is already leaning in somewhere. Ultimately, pre-traction is about accelerating the speed of iteration. If a founder understands how they’ll acquire users, when they’ll start paying, and where the early friction lies, they can build faster, learn faster, and adjust quickly when things don’t go as planned. The advice to “build and ship quickly” is universal for a reason. But if you’re raising capital while doing that, think deeply about how you communicate the friction you’re feeling, the conversations you’re having, and the early signs that what you’re building matters. Previous Next

maria heyen's writings, readings, and thoughts on vc welcome. welcome to the website here are my sticky notes, bookmarks, readings and writings, basically a collection of trends, behaviors, ways of thought, and actions that I have that I want to track/think about over time. somethings I write about: identity investing influence somethings I read about: thinking fast cultural curiosity discipline + process

the quick on my background: life, early career, hobbies, etc. maria heyen. on me: I hail from astoria, or where my childhood was spent on the cold beaches, visiting farmers markets, and riding bikes around the cul-de-sac. I moved to the midwest for school and lived in nebraska for 4+ years where I studied international business and studied in barcelona for 3 months where I worked at a proptech startup. TDLR: moved to missouri, backpacked europe, and now live in chicago. things I'm doing: learning/improving my spanish tutoring with tutoring chicago (here ) cooking my way though trader joes clifton strengths: competition, arranger, individualization, significance, input personal portfolio : maazah - middle eastern inspired sauces & dips

< Back on identity capital September 2024 more than ever, young people are asking themselves who am I? you already know what you’ve experienced; start defining it. For those of you who don’t know, I spent the last year living in Mid-Missouri. It was one of the most confusing and challenging times of my life to date (and trust me, I’ve had quite a few of those). I spent a lot of time alone, working, cooking, and yoga-ing. Despite the mundane, what came out of my year in Missouri was one of the richest opportunities of my life. The time to truly reflect on who I want to be and the experiences I want to have in the future. Defining Identity Captial Earlier this year, I finished the book The Defining Decade by Meg Jay, Ph.D . It felt like, for the first time, I stopped asking myself, “What am I doing in Missouri?” and started framing the experience as a way for me to build something called identity capital. Throughout the book, Dr. Jay asserts that who we are is built over time, piece-by-piece, by the things in our personal and professional lives that we choose to develop. She describes these as “investments that we make in ourselves, the things we do well enough, or long enough, that they become a part of who we are.” The longer I felt stuck in my current geography, the more it began to shape who I was becoming. What initially seemed ordinary and boring gradually turned into an unexpectedly interesting experience. Living in Missouri became an opportunity for me to invest in myself, engage with a population in the US that I hadn’t interacted with before, gain new perspectives on the investing ecosystem, and apply principles in my job that investors in the Midwest previously overlooked. I was building identity capital. Inflection Points When I began reflecting on building identity capital, it led me to think about the past moments in which that capital was previously built. I distilled both circumstantial and opportunistic moments into what I believe were times of major identity capital building. I grew up in a small town in the Pacific Northwest. My mom was a stay-at-home mother who worked weekend jobs, and my father was a public school principal. I attended a Title 1 high school where 15.8% of my classmates were homeless, and 8 out of 60 students who were in my graduating class attended a 4-year university. At 16, I started working two jobs each summer to begin saving for college. This trend continued throughout my college years, where I worked 80–100 hours a week in the summers, juggling an internship and waitressing at two different restaurants. Plain hard work that afforded me the opportunity of education and travel. In college, I spent two + months studying in Spain, where I worked at a startup where no one spoke English, and many of my coworkers were ex-pats from the former USSR. This environment allowed me to be unabashedly curious while building relationships in a foreign language. Of course, I’m adding the “year in MO” to my running list. Currently, most of my identity capital moments were derived from the circumstantial. (Ex. born to a working-class family, working because I had no savings, and traveling because I did). These moments are neither net negative nor net positive but moments of inflection in who I am. The next step is creating more of these moments through situations I choose to put myself in with the purpose of building identity capital, no matter how uninteresting they may initially be. (Ex. moving to the Midwest for school) Piece by Piece What’s beautiful about identity capital is that it doesn’t always require substantial resources or unique opportunities. It is free to create and can be built through everyday actions — reading books, exploring new places, trying different foods, or engaging in diverse conversations. Personal identity capital is built through your own active development alongside the collective and others’ social capital/relationships, helping you move forward. A fantastic example of this is founder Andrew Rea ’s blog titled How We Got Investor Intros . Throughout the blog, Andrew talks about how he and his co-founder’s ability to get intros was a direct result of 4 to 5 years of putting themselves in a position to build their company (i.e., 4 to 5 YEARS of building the identity capital needed to do so!). Andrew breaks down his and his co-founder’s origins, careers, and network that allowed them to successfully raise. Their identity capital was ultimately “exchanged” for fundraising dollars and a chance to build their company. Source Adopted from: Côté and Levine (2002) It’s this intersection of identity capital and social capital (our own and others) that allows already great people to build something exceptional. Final Thoughts As a young person, it’s easy to feel like you’re floating in the abyss, unsure of which direction will lead you where you want to go. I’ve found that by reframing everyday situations as opportunities to build identity capital, you can start to design a life that is interesting. My year in Missouri provided a chance for deep reflection and helped me start crafting my life around what I found was most important to me (family, friends, global citizenship, etc.) After leaving Missouri in late May, I spent 10 weeks backpacking and working in Europe and have now settled into a new apartment in Chicago. None of these opportunities would have been remotely possible without my prioritization of building identity capital through my past, current, and future circumstances. I am beaming with pride that I formed these experiences, and I sincerely believe that other young people can as well. You know more than anyone what your life has been like. Think about it. Spend time reflecting on what your inflection points are and what you’re doing now to build the experiences you want to have in the future. Previous Next

< Back betting on unseen forces January 2024 the formative experiences of founders and how they're key factors in forming an outlier. In this essay, we explore the formative experiences of the founders in the Redbud VC portfolio and why we believe these moments, often found at the intersection of circumstances and opportunities, are critical in a founder’s journey to success and key factors in forming an outlier. In 2014, Marc Andreessen sat down at Stanford University to candidly share what his firm looks for in founders, “The venture capital business is a 100% game of outliers- it’s an extreme exception.” Simple as that: great founders are outliers. Chasing these outliers has since become a common trend in Venture Capital as firms boast and argue what makes them the best at choosing who has these “extreme exceptions.” The irony is that no one truly knows, but as VCs, we do our best to build reliable frameworks around who to choose, and we wait, on average, 7–10 years to see if our assumptions are validated and if we successfully chose the outlier. Emerging frameworks designed to capture outliers fall into a few categories: education, geographic area, professional experience, motivational factors, personality traits, network, and challenges. Many VCs rely on “pattern recognition” in those areas, i.e., checking boxes on key points such as prestige or pedigree. The dependence on attempting to replicate previous formulas for success has arguably led many VCs to invest only in certain areas or within specific groups, e.g., Ivy League alumni or ex-FAANG. VCs tend to place bets where opportunity and privilege are plentiful; often, a belief exists that entrepreneurial success is directly correlated. In other words, although VCs are driven to search for outliers, they end up falling into the trap of pattern matching to the median. At Redbud VC, we are betting that entrepreneurial talent is evenly distributed even though opportunity is not , an idea that is not original in thought but is in practice. Education and Pedigree Education is the easiest box to check for VCs, as there is clear data on how founders from top-tier universities have the resources and networks that are robust enough to support them as opportunity comes. Recent PitchBook data showcases that the vast majority of VCs prioritize founder and executive team pedigree first when evaluating an investment opportunity. In 2022, McKinsey conducted a study on commonalities between the founders of Unicorn companies, finding that 95% of unicorn founders completed an academic degree and over 70% have an advanced degree such as a master’s, MBA, or PhD. Educational statistics have led VCs to deploy a third of their capital in their university alma mater when 40% of the VC industry is dominated by Harvard and Stanford alumni. Acceptance and completion of a higher educational program is a statically strong signal towards entrepreneurial success but is once again a pattern, not an outlier. VCs tend to place bets where opportunity and privilege are plentiful; often, a belief exists that entrepreneurial success is directly correlated. We asked the founders in our portfolio to share details about their educational background and significant experiences or learnings that happened throughout that time. One founder shared, “ I was a terrible student in undergrad, especially the first 2 years. I had to take a lot of classes over and had to fill my final semester with over 30 credits of classes to boost my GPA. It taught me to manage my time and push myself to work harder than I had ever worked before.” Another founder shared, “ I worked as an auxiliary campus police officer while at [University]. One of my duties was to stand at an intersection for 8–10 hours directing traffic on home football game days. A lot of days it rained or snowed, and I’d just be out there completely soaked, freezing my ass off. I learned a lot about toughing out the unpleasant parts to get to the other side.” A common thread across many responses in this category was remembering a specific experience that shaped the lens through which they approach being a founder rather than a person or connection. These small but defining moments early on have the biggest influence (or impact) on present-day principals. The prevailing belief that prestigious universities serve as reliable predictors of entrepreneurial success is flawed. While a substantial number of founders emerge from institutions like Harvard and Stanford, this correlation does not guarantee outlier achievements. In fact, founders who studied or worked at the University of Cincinnati are 3.3x more likely to achieve unicorn status than other founders. Admission to elite universities is often influenced by socioeconomic privilege, family networks, academic coaching, and other factors unrelated to entrepreneurial talent. The bias toward graduates from prestigious colleges triggers an influx of capital into said founders, creating an inaccurate perception of reduced risk. In other words, as a founder, having the “right” educational institution associated with you can erroneously signal safety to investors, perpetuating this cycle of bias. Professional Experience Professional experience is another key determinant of securing VC funding and evaluating founder backgrounds. Founder pitch decks often flex points of operational, technical, or prestigious work experience and are quantified by products shipped, revenue increased, etc. It’s hard for investors to ignore startups founded by ex-Meta, Twitter, Uber, or any top tech company talent. A founder’s professional experience undoubtedly contributes to a founder’s credibility , yet is not always directly correlated to quality. When speaking to our founders about key moments in their professional experiences that shaped them, many spoke about pivotal moments of opportunity: “ I spent 15 years as a civil engineer, eventually getting to a position normally occupied by people with 15+ years of experience more than me. I was really lucky; the companies I worked at needed someone organized, and I could step up; otherwise, no one in their right mind would hand a multibillion project to a 30-year-old.” Challenging moments of opportunity are essential to developing empathy for a problem. Another founder stated, “I was previously a Legal Officer at eBay, conducted due diligence at an angel investor group, analyzed the status of international contracts at the Court of Justice of the EU, worked at a community legal center, and have some law firm experience. My legal professional background absolutely equipped me to build the venture I founded, as it couldn’t exist without it.” Robust experiences with moments of opportunity often outweigh flashy company names or titles. At Redbud, we listen to these learnings and believe they can happen at any organization regardless of prestige. Geographical Influence Geographical influence is arguably the most explicit line drawn by investors — narratives about the coasts vs. Midwest and SF v.s. NY, etc., are a continuous topic of VC blog posts at all stages. It’s no secret that founders historically flourish in places like Silicon Valley, New York, Chicago, and other bustling urban hubs brimming with venture capital and abundant opportunity. A prime illustration of this phenomenon is when investors assess the “quality” of founders. Take, for instance, a founder hailing from the heart of San Francisco, a city synonymous with technological innovation. Investors instinctively place these founders higher on the scale of talented entrepreneurs. In stark contrast, investors may scrutinize a founder emerging from less tech-centric geography like Nebraska or Missouri and question, “What do they truly understand about being a startup founder?” Again, a seemingly inherent bias is in fact, the manifestation of pattern recognition rooted in geographical bias. Living in a traditionally overlooked area can instill unique traits in founders that are cultivated through the experience of building a company where there are limited examples of past success. In contrast to coastal cities with plentiful examples, opportunities, and blueprints for success, small, less VC-populated areas have the potential to breed founders who are grittier and more resilient. As one founder in our portfolio put it, “I and others frequently felt like we were alone on a remote island fighting for basic things that coastal startups enjoyed in abundance.” Resilience can be a formidable asset in the entrepreneurial world. It encourages founders to be resourceful, adaptable and focused on problem-solving. Founders from such overlooked areas often have a deeper connection with their local communities as they have had to first look locally for support and resources. “I was born and raised in the midwest and believe, after living on both the West Coast and East Coasts, there is definitely an aspect of community, helping your neighbor, and holding honesty and transparency that is deeply embedded in my approach to life, business, and people.” While building a company or hailing from an overlooked area can bring founders with strong traits and principles forward, the limits of said geography can restrict founders to operating within the confines of what they’ve seen. There often becomes a point where thinking outside of one’s community is discouraged, and founders retreat to the patterns of what has been locally “successful.” “[I’ve lived in] London/Ireland/Frankfurt/Lagos [and] living in multiple places made me realize how big the world is and how much opportunity there is however, there are (real but often over publicized) statistics surrounding my community who are always portrayed as ‘under’ served/estimated/funded so you’re mocked or actively discouraged for thinking big or outside the norm.” Founders often feel a tension between what they are striving to create and an existing mold of “success.” We believe providing these moments of exposure to our founders is important as they often prove to be essential learnings that deeply influence future decision-making and the shaping of an outlier. Exposure to top-tier ecosystems and thriving markets can push founders to think outside of the norm. Accessibility to examples of outlier founders can help others avoid mistakes, create relationships, and iterate alongside an individual who has done it before. More than one founder in our portfolio wrote about the moments that pushed them to embrace their strengths while simultaneously thinking big: “I have always had big goals for myself, and I knew that I’d eventually build something big on the world stage. I grew up in an environment that encouraged ambition (albeit, traditional). Having access to a variety of TV channels (specifically, [shows in the] US like Disney Channel — I’m serious!) and the internet made me be more extroverted and think bigger than most of my peers.” Exposure to diverse media, people, things, and places, no matter how big or small, is critical in a founder’s journey toward perspective. We believe providing these moments of exposure to our founders is important as they often prove to be essential learnings that deeply influence future decision-making and the shaping of an outlier. By recognizing how to nurture such experiences, Redbud is able to identify founders that would typically be overlooked if evaluated against an investor’s traditional framework for success. Motivating Factors The motivational factors that propel founders forward are the unseen catalysts of creating outliers and are unique to each founder. It’s difficult to dissect motivation and place it into distinctive categories. Unlike education with statistical ties to “founder success,” motivation cannot be statistically grouped, and therefore, it is difficult for investors to drive patterns and assumptions around it. When we spoke with our founders about what motivated them, some attributed defining moments in forming a “chip on their shoulder,” while some founders spoke of the circumstances that provided the privilege and opportunity for them to build a company. As we dissect the formative experiences of our portfolio founders, it becomes apparent that motivations are not just personal narratives but powerful drivers influencing the trajectory of their entrepreneurial journeys. One founder shared: “Being immigrant founders, our success impacts our visa status, intensifying our drive to excel. My motivation is also deeply rooted in Chinese familial values and my academic achievements. However, another chip comes from my passion for architecture.” The intertwining of visa status, familial values, and a passion for architecture forms a unique blend of motivations that extends beyond the conventional markers of success. It’s the blend of diverse and very real motivational factors that are the tipping point in propelling founders outside of the binary success and into outlier status. Another founder shared: “I am the underdog and have been told I always have had a chip on my shoulder. I love solving problems, and there are so many [customers] that I have come across where I have been able to solve their problems [through my company].” The motivation to solve problems and create a company where both customers and employees genuinely love doing business is deeply rooted in the founder’s identity as the “underdog.” A sense of challenge can be a powerful driver for founders, fueled by the times when they’ve been overlooked. Such heart has the potential to serve as fuel to break an existing mold, thought, or perception of success and prevent them from becoming disheartened. It’s the blend of diverse and very real motivational factors that are the tipping point in propelling founders outside of the binary success and into outlier status. The absence of a chip on the shoulder doesn’t diminish or lessen the potency of motivational factors. For instance, one founder with a stable family life was inspired by dissatisfaction with a predetermined career path. “No chip. I had a good family life. I have a supportive wife. I wouldn’t say that I faced any adversity other than the usual ‘that’s not how you do life’ unsolicited advice. I went to school thinking I was going to be a cubicle engineer my whole career, and after a while, it started to scare the hell out of me.” This revelation that life could become more than a routine ignited a spark, pushing this founder to break free from the expected and embrace the excitement of the unknown. Motivational factors are incredibly diverse in nature and collectively underscore a crucial point: the journey to outlier status is not solely paved with external markers of success. Instead, it is inspired by the deeply personal internal fires of passion, ambition, resilience, and a commitment to self-improvement. Recognizing and understanding these motivational forces is integral to Redbud VC’s approach. It informs our strategy in identifying founders with deeply rooted motivations regardless of the driving force. Conclusion Throughout our interviews with our portfolio founders, we found that the seemingly small moments often play much larger roles in a founder’s journey toward success. Thus, there is no neatly packaged pattern that can guarantee the manifestation of an outlier founder, nor is there a combination of factors that can be matched. While many VCs continue to align with inherently flawed frameworks to find outlier founders, we at Redbud look to our founders for context on their experiences. We understand the journey to success is not a linear trajectory attached to your alma mater, geographic area, professional exposure, motivational factors, etc.; instead, it emerges from a tapestry of life experiences that have the propensity to cultivate an outlier founder. Taking a note from Malcolm Gladwell’s book Outliers, we are betting that investing is about recognizing the unique blend of advantages, inheritances, and experiences that make each founder who they are. “In the end, the outlier is not an outlier at all; their success is a product of a web of critical elements deserving attention, understanding, and appreciation.” At Redbud, our commitment lies not in adhering to rigid patterns but in embracing the richness of individual stories and fostering the connections that propel outliers into existence. Previous Next

< Back what I wish I knew my first month in venture April 2024 the mistakes I made and advice from other young investors. I grew up incredibly isolated from the tech world. My parents worked as teachers, there were no corporate jobs in my community, and no one around me spoke the language of “business.” In starting my career in Venture, I've had to get up to speed on corporate and venture courtesies simultaneously. I’ve found that working in VC isn’t a learning curve; it’s a learning rollercoaster. When you think you’ve grasped a concept or nailed a best practice, there’s another one waiting for you around the bend. It’s a cycle of learning that can leave you feeling like you’re stuck on a ride with no one telling you where to exit. So don’t worry, I’ve punched my ticket on the rollercoaster many times when I didn’t have to (and I know there’ll be more). There are way too many things that I wish I had known in month one, but below are the key learnings I’ve had, along with insights from other young VCs who’ve navigated similar challenges during their inaugural month in the venture. 1. Taste takes time It’s incredibly difficult to know what you think of a company when you have no baseline for comparison. Knowledge of large markets, comps, and knowing what questions to ask can all be accelerated by talking to as many founders as possible. Knowing what you like to see in a startup and what your partners like to see takes time and practice. On another note, having conviction is not an overnight phenomenon, and being able to communicate it to a GP isn’t either. Learning time can be shortened through repetition. “Developing your own taste and pattern recognition takes time. Before narrowing in too much on what you like, first focus on learning what kinds of companies and business models your partner/firm likes”— Georgina McMillian , Investor at Headline . 2. Always double opt-in When introducing two people who don’t know each other, ask each of them to opt-in to the introduction before making it. I was completely unaware of this common courtesy when I started in VC (sorry to all those who got intros launched into thier inboxes from me) . Emails without opt-ins don’t set up either party for success, they increase the likelihood of the connection never happening, and they make people aware that they may not want to spend the time on intros that come your way. Here’s my favorite breakdown of how to facilitate a strong intro email from Chris Fralic, Partner at First Round Capital. 1. VC fundamentally is about people and the art of relationship building, so strong interpersonal skills are crucial 2. FOMO is a REAL thing 3. Conviction is key- Michelle Rogoff , Investor at Hyde Park Angels 3. Listen more. Talk less. There’s a lot of ground to cover in an intro call with a founder. Asking concise questions to get the answer you need and listening is critical. Sometimes, what a founder doesn’t say is just as important as what they do say. Noticing the missing pieces of information helps formulate the next question. Listening to the full scope of an answer helps you decide where deeper into the aspects that are missing or transition to the next topic. Previous Next

< Back on curiosity January 2025 the underrated skill of not worrying about sounding dumb and just being curious The summer I spent in Barcelona was one of the most important experiences of my life. Like most college students studying abroad, I was excited about a "Cheeta Girls Summer". What I didn’t expect was that what I’d take away would have nothing to do with travel or language but with how to think. My internship at a proptech startup started the day after I arrived. I barely knew the company’s name before walking into the office, jet-lagged and (embarrassingly) late. The moment I sat down, I realized that no one spoke English. I had taken Spanish for years, but the classroom had not done much to prepare me for the speed and complexity of real conversations in a working environment. That first day, I understood very little. I went home, convinced I wouldn’t last the summer. But something interesting happens when you’re forced into a situation where you don’t know enough to pretend. You stop worrying about how you sound. Since I couldn’t talk much, I listened. At first, I asked only the simplest questions - enough to get through the workday. But as I got more comfortable, my curiosity took over. I started asking my coworkers about their lives, their weekends, and their opinions. I stopped filtering for what I thought was “smart” to ask and just asked what I genuinely wanted to know. That’s how I got to know Núria, my boss. She had grown up in the Soviet Union before immigrating to Spain, and I was fascinated by her story. One night before post-work drinks, I wrote out a list of questions I wanted to ask her - big, possibly naïve questions about her past and how she saw the world. I brought that list to our happy hour the next day. When I hesitated, worried that some might come across as uninformed, she laughed and told me to ask anything. That conversation led to a weekly happy hour, and during my last week in Spain, she gave me a journal filled with books to read - her way of continuing the dialogue. I think about that summer often, especially in my work as an investor. The same curiosity that helped me navigate Barcelona is what now guides my conversations with founders, LPs, and peers. Investing is an industry full of pressure to appear certain - to have well-formed opinions, to ask the “right” questions, to never admit what you don’t know. But I’ve found that my best investment decisions have come from doing the opposite. Instead of approaching diligence with a fixed lens, I approach it like my conversations with Núria by setting aside preconceived notions and asking questions that cut straight to what I truly want to understand. Why now? Why this market? What do you believe that others don’t? It's basically an exercise in first principles thinking but from a place of insatiable curiosity. The same applies to my conversations with other investors. Some of the best calls I’ve had with my peers aren’t the ones where we exchange fully-baked theses but the ones where we openly challenge our thinking. How are you looking at this trend? What assumptions am I missing? It’s in these back-and-forths where we’re willing to be wrong, to ask the obvious questions, to push beyond the surface-level consensus that the real thinking happens. What I learned that summer wasn’t just Spanish. I learned that the best conversations and the best thinking come from removing the fear of sounding dumb. Some of the most valuable insights I’ve had in my career have come from simply asking, How do you think about this? The ability to ask questions without hesitation and to be fully present in a conversation without worrying about how you’ll be perceived is a radically underrated skill. Previous Next

all of my favorite readings: blogs, books, and blurbs ​ readings some of my favorite blogs, books, and blurbs thinking fast start right before you get eaten by the bear how things get done the great mental models: volume one rigorous thinking: no lazy thinking cultural curiosity same wavelength ‘ugh, i’m so busy’: a status symbol for our time the strength of being misunderstood successful people "insecure vibes" are a self-fulfilling prophecy corporate ozempic the socially-conscious mean girl the META trending trends: 2024 you don't need to document everything the virtue of vice how we built the internet american vulcan discipline + process 15 principles for managing up finding the courage to be disliked how to become insanely well-connected vc what they don’t tell you about making it in vc a few things I’ve learned about brand building in venture capital “the grass is always greener”…aka the circle of envy the puritans of venture capital always run an auction