As brilliantly put by Raye, I've spent the last couple of months asking myself: "Baby, where the hell is my founder?" In a noisy early stage market, we are doubling down on human-first deal sourcing.
Early stage investing is a bit messy these days. Company formations are surging with 2026 applications so far running 25.54% ahead of last year, and monthly formations now exceed a 435% jump from the monthly average in 2004. According to Carta, roughly 3,000 U.S. startups have already raised pre-seed capital in Q1 2026. The barrier to starting a company seems to have substantially been reduced.
And of course, most of these deals have something to do with AI, which intensifies the noise. Just a few years ago, AI startups received around 30% of all pre-seed dollars. By Q1 2026, they hit the 50% mark.
On the other hand, as we have written here before, the concentration of capital at the early stages is still strong. Only 11,672 SAFEs and convertible notes were issued in Q4 2025, a multi-year low, but dollar volume held steady at $2.62B, similar to recent quarters, meaning fewer rounds are happening at the same volume amount. More capital is concentrated into fewer perceived winners, creating a market where dozens of companies can look fundable at first glance, while true differentiation becomes harder to assess.
Add to that inflated early traction signals and you are in quite a jam. Building an MVP is cheaper and faster than it's ever been. Things look shiny at first, but when you look under the hood, you are often left uninspired. We are seeing more excitement and experimentation, but also more look-alike companies. We now routinely see dozens of near-identical businesses delivering $100K to $800K in ARR with a handful of customers within a few months, competing in the same space, making early traction a difficult signal for future success. The data is showing that as well. According to Carta, nearly half of all seed financings in Q1 2025 were bridge rounds rather than true progression rounds, while the median time between Series A and Series B stretched to a record 2.8 years. More companies are getting built, but fewer are breaking out.
Don’t get me wrong: this is exciting. There has never been more experimentation. There has never been more company creation. But there has also never been more difficulty distinguishing durable insight from the noise.
In all the noise, serious founders building generational companies are becoming increasingly harder to find.
Some early stage investors seem to be adopting tools to find "pre-founders" coming out of "founder factories" and building increasingly elaborate automated outbound sequences sent to hundreds of founders who have no way to prioritize meeting requests. That approach is only making things worse, leading to AI-generated emails back and forth.
At Laconia, we believe that investor-founder relationships remain personal. While we also take a proactive approach and do targeted, intentional manual outreach to founders who catch our eye (hello, to anyone who recently received a LI note from me out of the blue!), we have chosen to double down on our human-first strategy. Over the past decade, we have taken a grassroots approach to finding great founders early. Our “outside-in” approach drives us to invest our time in office hours, curated community events, educational initiatives, and programs like the Venture Cooperative. We also take cold inbound seriously through a structured intake and review process.
True to Laconia’s values of transparency and accessibility, we believe that founders should understand us from afar. We’ve written openly about who we are, our investment philosophy and what entrepreneurs we want to back. More recently, we’ve shared how our thinking is evolving alongside the market.
So rather than adding another outbound sequence into the ecosystem, this is simply us putting up a signal flare for the founders we want to meet. If you see them, tell them they should holler.
Who we're looking for
Laconia invests in serious founders building must-have technologies in enduring industries.
Investment Stage: Pre-seed and seed. Happy to meet very early in the company building process.
Industry Sectors: Diversified, with companies spanning fintech, healthcare, retailtech, climate tech, proptech, and more. (We don’t typically invest in biotech, energy, military applications, hardware, or consumer tech)
Business Type: High-margin at scale, with capital-efficient market distribution; in practice, this tends to skew toward b2b software and companies with similar underlying attributes
Investment Size: $250,000 - $1 million checks
Geography: Primarily US and Canada, with openness to global companies entering the US market
Our focus has stayed consistent for a decade: companies that bring systematic order to complex workflows, but what that may look like has evolved. In narrowing it down beyond the parameters above, these days, we get really excited about the following three things.
Serious builders, not bubble riders
We back smart founders who are building generational companies, not just riding the latest wave. The distinction matters now more than ever. In a market flooded with AI-enabled anything, we're looking for founders with earned insight who understand a workflow, customer, or market deeply enough to see something others don’t yet see.
Meaningful, venture-scale problems
We are looking for founders building meaningful and inspiring problems, leveraging deep expertise and a distinct entry point into a massive (often underestimated) opportunity. These companies could be vertical AI platforms with clear GTM wedges positioned between legacy incumbents and horizontal giants, or solutions for regulated industries like finance and healthcare where accuracy requirements, compliance frameworks, and workflow specificity demand more than general-purpose AI.
Think tools helping miners explore uranium; platforms bridging the valley of death gap in medtech between FDA approval and full reimbursement; and companies solving the structural shortage in skilled nursing, and more.
Structural defensibility
As Geri outlined in The Death of SaaS, in a time where building tech is fast and cheap, now more than ever, we are looking for companies that are thinking about their “structural defensibility” from day one.
The default assumption can no longer be that software margins alone create defensibility. If a product can be replicated by a foundation model provider or absorbed into a horizontal platform roadmap, that risk has to be accounted for.
Defensibility can come in different forms: 1) “Software +” businesses: Software companies + human in the loop; or Software + services; 2) Companies that have clear data advantages/moats such as unique data collection, proprietary data access, or exclusive partnerships that create structural advantages that can't be easily replicated; 3) Distribution advantage or clear understanding of the workflows, change management and buying decisions of the customer and/or market.
The archetype we love: a vertical-specific product that is specialized enough that hyperscalers can't match its domain expertise, and up against legacy incumbents too slow to deliver a modern product experience. To that, one should add structural defensibility in the form of distribution, data or tech+ Moat, and we are interested.
What you should know about us
We run an efficient, transparent process, and we turn it on its head. First, instead of running a long due diligence process ending in an IC meeting, we prioritize a full investment team meeting early on. This helps us get to "no" as fast as possible when it's not right and only proceed to diligence when everyone is genuinely excited. Second, our due diligence includes a workshop that stress-tests the financial model, pipeline, and go-to-market strategy, giving us a view of how the founding team thinks. At the same time, founders get a glimpse of what working with us is like. Lastly, rather than contacting a company’s existing customers, who are already early believers taking risks by working with an early stage startup, we validate value propositions by activating our extensive network of prospective customers, experts, and co-investors, adding value whether or not we invest.
Our structured due diligence maintains the human element that is so key to Laconia’s core thesis. Our front-loaded fund construction and dedicated focus to pre-seed and seed investing align our incentives with founders and drive better outcomes between seed and series A. Over the past decade, 97% of our portfolio companies have successfully raised subsequent funding rounds, and over 70% of our portfolio companies are either still active or have completed successful exits. In a power law-driven world where investors often treat early stage investments as lottery tickets, we take founders’ life work seriously. And we are excited to partner with more founders with this promise in mind.
"If you see him, tell him —
he should holler."
— with apologies to Raye
If this sounds like you, and you’re looking for someone like us, we want to hear from you!