Watch Episode 8: Freestyle
Proudly produced alongside Bricks and Bytes.
Biases
We're not here for common wisdom or herd mentality. Our investment philosophy is built on finding the extraordinary. Biases have their place in this.
Our starting point is to search for vertical singularities in our sectors. These are opportunities that most overlook initially because they're invisible or hard to evaluate. We spend time on the details to build deep-rooted conviction in these opportunities that others might dismiss.
Patric explains:
"If you want to be in a framework where you're investing in what we're calling vertical singularities, it's inevitable you cannot do that in a framework where it eliminates the risk of bias. You have to allow for it."
This approach is fundamentally different from traditional VC. We're not looking for the obvious plays or following the crowd. We're searching for those unique opportunities that have the potential to reshape entire industries. It's a high-risk, high-reward strategy, but it's one we believe in wholeheartedly.
Our focus on vertical singularities means we're deeply embedded in our chosen sectors. We're not generalists trying to understand a new industry with each investment. Instead, we've built deep expertise in 3D and design, construction and renovation, blue-collar workforce and robotics, supply chains and logistics. This specialized knowledge allows us to spot opportunities that others might miss and to truly understand the potential of the companies we invest in.
We make no apologies for our approach. The same quirkiness and idiosyncratic patterns that hopefully lead us to find iconic companies will sometimes result in biases that take us astray. It's part of the game. We're not machines - we're humans with deep industry knowledge and strong convictions.
Adam adds: "I think biases which are the systematic result of self-doubt or lack of self-belief or seeking external acceptance or validation, that bias has no place in a high-performing VC setup. Bias that kicks in due to individual quirks in how we judge opportunities, that's different."
This willingness to embrace our quirks and biases sets us apart in the VC world. We're not trying to eliminate all bias - we recognize that our unique perspectives and experiences can be valuable in identifying those vertical singularities that have the potential to become legendary companies.
Shub provides an example of how this plays out in practice: "We did have a few fundraisers especially in 2020 that went more quickly than our comfort but you know by and large we've avoided these and that comes with the benefit of founder and investor getting to know each other really well and knowing whether they really want to build something for the long haul."
This long-term, relationship-focused approach allows us to truly understand the founders and companies we're investing in, beyond just the numbers on a pitch deck. It's this deep understanding that enables us to spot those vertical singularities and build conviction in opportunities that others might overlook.
Global
Our investment teams span continents, and collaborate as one unified force. Which is uncommon in the world VC.
We look for the best founders across the globe, and even in space. Our investment teams spread across North America, Asia-Pacific, and Europe, led by one General Partner each who was born and raised in the region. This structure gives us a truly global perspective, allowing us to identify opportunities and trends that might be missed by firms with a more localized focus.
While our teams embed deeply in local markets, we collaborate globally. We can act decisively because of our unified investment committee in which each team member participates every week. This is how we succeed in our global, cross-border knowledge transfer that the best founders find so valuable.
Adam highlights how our global structure sets us apart: "We come together as a global investment team multiple times a week which is very unique for a global firm. Most firms like Shub explained have one hub and one core geography and then they do a little bit of like satellite things somewhere else."
He continues, "The satellites they're pretty much on their own and they need to think about okay how do I push something that I can get through the headquarters without actually talking constantly as a global team."
Our approach is different. We don't have satellites or second-class citizens. Every region is equally important, and every team member has a voice in our investment decisions. This allows us to leverage our global network and knowledge base effectively, providing unique value to our portfolio companies.
This unified global approach allows us to hold each other accountable and challenge our biases. As Adam puts it: "One of the things for example that I say the most in our deal flow meetings is 'hey just to keep myself intellectually honest here' - that's how I start asking for opinions."
Patric adds:
"The more you let the information flow in a global team with very different local empathies the more you will benefit from holding each other accountable in terms of how you think about things."
This global collaboration isn't just about making investment decisions. It's about providing real value to our portfolio companies. We can help founders navigate different markets, connect with partners across the globe, and understand global trends in their industry. Our founders have access not just to one local team, but to a global network of experts and connections.
Shub emphasizes the importance of this global perspective: "To date we have partnerships with founders in more than 22 countries who serve more than 75 geographies across the Americas, Asia-Pacific, and Europe."
This global reach, combined with our deep vertical expertise, allows us to identify and support the most promising companies, regardless of where they're based. We're not limited by geography - we're truly building a global portfolio of game-changing companies in our chosen sectors.
Air-Power
We bring the financial firepower founders need to build legendary companies, from day zero through every stage of growth.
We founded Foundamental in January 2019 with a thesis, a prior track record, and $60 million in commitments. Five years later, we've grown to more than $250 million. As of 2024 and our third fund, we are flush with the available financial air power to back and cover the most ambitious builders, starting at their day zero.
Patric explains our approach: "Our primary focus is leading pre-seed, seed and Series A rounds with $500K to $5M checks. We reserve more than 55% of the funds we manage for follow-ons, something else that makes our early-stage strategies unique."
This reserve strategy is crucial. It means we're not just there for the initial investment - we have the capacity to support our portfolio companies as they grow. As Patric notes, "This has led us to pre-empting large follow-on rounds across all stages in our portfolio and bringing more air power when needed."
But our air power isn't just about the size of our cheques. It's about how we deploy that capital strategically to help our founders build legendary companies. Adam explains: "If you frame in discussion of like here's the amount of money that we need to essentially achieve to hit the milestones within a certain period of time, and then if you achieve that those milestones you can then effectively pull out the proverbial road to raise an additional round at a much higher valuation."
This milestone-based approach ensures that we're not just throwing money at companies, but strategically supporting their growth. We work closely with our founders to understand their needs and provide the right level of funding at the right time.
Shub emphasizes our commitment to founders:
"We pledge to put in the work on your behalf and make you our fans. Patric famously said on the record that his KPI is to reply to every founder WhatsApp in less than 60 minutes. Actually, we almost always respond instantly."
This responsiveness is a key part of our air power strategy. We're not passive investors - we're active partners, ready to provide support, advice, and additional funding whenever our portfolio companies need it.
Adam provides an example of how this works in practice: "We did that actually with a company called Auba. We gave it was a smaller raise and like traditional for for that uh a pre-seed round. It gave him a certain amount of runway I think it allowed him to be more creative to do more with less and then also like reach in like what what are the most value-added metrics that I can use and pull forward to then raise up another step up."
This approach - providing focused initial funding, helping companies identify and achieve key milestones, and then supporting larger raises based on demonstrated progress - is at the core of our air power strategy. It's not just about the money - it's about strategic deployment of capital to help our founders build truly transformative companies.
Contrarian
We take pride in our controversial takes and unique perspectives. In a world of consensus thinking, we're not afraid to stand apart.
Our approach is not to invest in common wisdoms and herd heuristics in the real world. Herd heuristics are a force of nature that allows mankind to make sense of the world in highly repetitive situations. The issue with applying herd heuristics is that legendary companies do not repeat. Each has its own unique ingredients.
Patric shares an example of our contrarian thinking: "I mean I would say this eight years later I still don't understand why a person put a single euro into Katerra. I still don't understand it and nobody can explain it to me."
He elaborates on why he found Katerra's model problematic: "For a company that touted itself as 'oh we're bringing automotive processes into construction' this was the farthest model from how automotive OEMs actually operate... Katerra was the exact opposite. It never distributed, it never had a brand towards consumers because it was the developers actually owning the brand and the distribution."
This willingness to challenge popular notions, even when they're backed by billions in investment, is a core part of our identity. We're not swayed by hype or big names - we look at the fundamentals and aren't afraid to call out when something doesn't make sense to us.
Adam provides another example of our contrarian approach: "There's certain models where I think we have built up the authority to in fact even tell companies this is what they should deliver and and this is kind of like within a narrow range how the company will be priced in future rounds."
This level of conviction - to not just evaluate companies based on existing metrics, but to actually define what good performance looks like in our sectors - sets us apart from more generalist investors.
Shub adds another perspective on our contrarian approach:
"I think the fallacy with generic VCs and even with founders to be honest, they go too deep on optimizing for one thing whereas everything exists in conjunction with the other."
He provides an example: "A few years ago the belief would be working capital is bad and that's it. Any use of working capital means the company is inherently unscalable regardless of what the margin structure is regardless of what the return on capital employed is. These days the new parrot wisdom is hey just maximize uh gross margin."
Our approach is more nuanced. We don't follow these sweeping generalizations. Instead, we look at each company holistically, understanding how different factors interact and what truly drives value in each specific case.
This contrarian approach extends to how we structure our firm as well. Unlike many VC firms that have a hub-and-spoke model with satellite offices, we operate as a truly global, unified team. This allows us to challenge each other's thinking and avoid the groupthink that can occur in more hierarchical structures.
Our contrarian nature isn't about being difficult or contrary for its own sake. It's about having the courage to trust our deep industry knowledge and unique perspectives, even when they go against the prevailing wisdom. This approach allows us to identify opportunities that others miss and to provide truly valuable insights to our portfolio companies.
Team
We operate as a high-performing team, not a coalition of individuals. Our strength comes from our unity and our willingness to challenge each other.
Shub describes our dynamic: "What we have and what hopefully we'll continue to have is a team sport. We are a high-performing team where each of us individually needs to be a star player, but we are also playing a team sport and therefore the three of us in tandem need to play together."
This team-first mentality allows us to have heated discussions and disagree strongly, while maintaining deep respect for each other. Adam explains: "I think it really comes to like I respect your opinion even though I just disagree with it. And you know the tempers were flair but then in a day it's I think it's yeah you know."
He continues: "I don't think they're ever held you know each other that they don't try to pin each other like down as hard as we do and like I think we're very vulnerable with each other because I think it ultimately comes to respective I'm allowing myself to be vulnerable because I I you know I respect you I trust you quite quite deeply you know it's like these are my brothers."
This level of trust and vulnerability is crucial in our decision-making process. It allows us to truly challenge each other's ideas and assumptions, leading to better investment decisions.
Patric adds:
"Whether you call it friendship or there might be a GP team out there that would say hey we're not friends but we care for each other and we make ourselves vulnerable... in both instances, it's so important to actually let information flow and discuss it with the mindset of 'hey I'm not doing it to hurt each other'."
He emphasizes the importance of this approach in the VC business: "Because we're in a decision business and because we operate with imperfect information, it's so important to actually let information flow and discuss it with the mindset of hey I'm not doing it to hurt each other... I'm doing it in order to find the perfect decision among imperfect information."
This culture of open, honest, and sometimes heated debate is a key part of our decision-making process. We don't shy away from disagreements - we see them as opportunities to refine our thinking and make better decisions.
Adam provides insight into how this plays out in practice: "Many investors will naturally just dig your heels in because like you know you're kind of really bought into this this company like I got to defend it like I just like I you know I'm not gonna I'm I'll die on this hill you know it's like you really dig in and you really have some big uh sparring sessions."
But crucially, these debates don't lead to lasting animosity or factionalism within the team. As Shub explains: "Quite often other VC firms resemble like a coalition government at work where uh for each decision you're trying to find your faction that'll get the vote done... I think what we have and what hopefully we'll continue to have is a team sport."
This team-first mentality extends beyond just our investment decisions. It's about how we approach our entire business. We're not just individual investors working under the same brand - we're a unified team, working together to build something greater than any of us could achieve alone.
Our team approach also benefits our portfolio companies. They don't just get one partner - they get access to our entire team's expertise and network. We bring our collective knowledge and experience to bear on each investment, providing a level of support and insight that goes beyond what a single partner could offer.
In the end, our team approach is about maximizing our collective intelligence and minimizing our individual biases. By challenging each other, supporting each other, and working together as a unified force, we're able to make better decisions and provide more value to our founders. This is how we're building Foundamental into a legendary firm in its own right.
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Ep. 8: Freestyle
tl;dr
Biases: We search for unique opportunities others overlook, allowing our quirks and biases to guide us towards potential iconic companies. Our deep expertise in specific verticals enables us to spot and understand opportunities that generalist investors might miss.
Global: Our truly unified global team collaborates closely across regions, enabling decisive action and valuable cross-border knowledge transfer for founders. Unlike firms with a hub-and-spoke model, we operate as one cohesive unit, leveraging our global perspective to identify trends and opportunities worldwide.
Air Power: With over $250 million under management, we provide substantial financial backing to ambitious founders from day zero through follow-on rounds. Our strategic deployment of capital, focused on helping companies achieve key milestones, sets us apart from traditional VC approaches.
Contrarian: We pride ourselves on challenging common wisdom and herd mentality, using our deep industry knowledge to spot opportunities others miss. Our willingness to go against popular opinion, even questioning billion-dollar investments, is core to our identity and investment strategy.
Team: We operate as a high-performing, unified team where heated debates and strong disagreements coexist with deep mutual respect and vulnerability. This team-first approach, characterized by open and honest communication, allows us to make better decisions and provide more comprehensive support to our portfolio companies.
Crafted Proudly In Partnership With Bricks & Bytes
This video and associated content was produced alongside Bricks and Bytes. Please support the amazing work they are doing for the AEC founder community by visiting their full Super Series page here.