Welcome back to Field Notebook!

Here are some of the thoughts, essays, and hot takes that have surfaced across the Redbud team this month. In Edition #3 of Field Notebook, we discuss how we raised a $25M Fund II in a challenging market, gut outweighs data in early stage VC, and why remote work can still win 🏝

Redbud VC invests $250k-$500k in early-stage tech founders. We deliver insights and learnings we shared over the last month to our over 15,000 readers.

Raising in the Worst Market for Emerging Managers

We raised a $5M Fund I in Spring 2023 and a $25M Fund II in Fall 2025. 2023–2025 was the worst three-year fundraising stretch for emerging managers in modern VC history. In 2024, emerging managers captured only 23% of all fund value—a decade low. In 2025, family offices pulled back, endowments came under pressure, and LP capital consolidated to established names.

As LP capital consolidates to tier-1 VCs, VC capital consolidates toward pedigree. The same gravity that pulls LP dollars to Sequoia pulls investment dollars toward pedigreed founders. We know that creates an opportunity.

We invest in anyone, with no bias toward pedigree. We're focused on resilience— founders strengthened by struggle, whether they're Midwest-based, transplants on the coasts, or anywhere in between. A lot of these founders resonate with our thesis and our own non-traditional roots. That shows up in how quickly trust gets built and how those relationships compound over time.

We've been builders too. Our Partners built EquipmentShare—a generational company started in Columbia, MO that went public on the Nasdaq at a $7B market cap. That experience gives us an ethos, perspective, and network that's genuinely different on a cap table. And when the market was pulling capital away from anyone without a coastal brand, we kept investing. Our uniqueness, hustle, values, and resilience resonated with the LP base we targeted.

The Funnel

I spent three months before any outreach refining the story and the materials, getting feedback from Fund I LPs and iterating. The "why" behind Redbud isn't a fundraising strategy—it's the reason we're building a long-standing firm, not just another fund. Our edge is perspective (rural towns, no formal education to a public company), network (Missouri talent and customers), geo (Columbia, MO), and no bias toward pedigree or the hot potato FOMO approach a lot of VCs take. We invest with a long-term lens focused on resilience, which lets us spot outlier talent others gloss over.

We built a prospect list of over 400 names. Met more than 150. Closed over 40%. The reason someone invested or didn’t equally helped us refine our story.

How We Met Our LPs

Nearly 60% of the fund came from people who already trusted us or were sent by someone who did. Fund I LPs re-upped at 35% of committed capital and 175% of what they committed in Fund I. Referrals drove another 24%. Cold outreach — fully personalized, no templates — produced 18%, which is high for a market this tight.

CAPITAL SOURCE (% OF COMMITTED CAPITAL)

I refined multiple pitches based on the LP profile. Everyone invests for different reasons — returns, networking, discussing interesting events with friends, supporting locally, diversifying away from real estate, tax-free gains. Every outreach had some uniqueness based on what I thought would resonate. High conversion came from in-person meetings, so I spent a lot of time figuring out the right cold outreach and referral paths just to land the first meeting.

We had less than $10M soft-committed in June 2025 and over $20M by August. The catalyst was having a company pop in June with a 42x mark, putting us in the top 10% across the board in metrics for 2023 fund vintages. We also raised our minimum from $150K to $250K, which resonated with LP prospects and some who had committed to the $150k upped to $250k without us even asking them to do so. A story can only go so far, a strong returns are needed to close real volume.

Where Our LPs Are From

61% of capital came from Columbia. We also have strong representation from St. Louis, Kansas City, Cape Girardeau, and Springfield.

LP GEOGRAPHY (% OF COMMITTED CAPITAL)

Trust and values are important in Missouri, and sometimes it takes a while to warm up to someone. We put a lot of time into converting well-known names across the state that could anchor and bring in others. I drove to St. Louis to introduce myself to Jim McKelvey at an event who was a top person on my list to partner with. The first intro was flat, but I found him toward the end of the event and I literally grabbed his arm as he was walking past. I had to scramble to think through an ask so gave him the EquipmentShare going-public pitch and suggested he meet Willy to provide insights as a fellow Missouri founder who has been through the IPO process. We certainly practice what we preach when it comes to being scrappy. It took a few months, but we got him across the finish line. Having a big name like his alongside Sandy Kemper in KC, a previous Boeing CEO, Shelter Insurance, and Mizzou made a real difference in subsequent conversations

A Relatively Untapped LP Base

Most emerging managers go after the same pool: institutional funds of funds, endowments, and RIAs. We went after operators—people who've built companies in Missouri across steel, construction, manufacturing, payments, healthcare, and technology. 82% of our capital is from high-net-worth individuals. A lot of these folks can be early customers and strategic partners for our portfolio founders, not just check writers. They also resonate with our ethos and mentality with building and investing in companies.

LP TYPE (% OF COMMITTED CAPITAL)

The LP base we built has a ton of alignment with what we're doing. They don't pressure us to play the hot potato game, i.e., chasing quick markups on flashy deals. That lets us be disciplined and patient, investing with a long-term lens on durable companies.

One way to frame the investment to an LP: think of it like a high-risk 401(k) targeting ~30% annualized returns, tax-free via QSBS, with a 10+ year lockup. It's not for everyone. For the right person, someone who's built a business, understands and appreciates risk, and has minimal allocation to tangential asset classes, it’s a great opportunity to diversify a portfolio.

INDUSTRIES OUR LPS COME FROM (% OF LP COUNT)

Why LPs Work With Us

LPs invest for different reasons and we lean into that. There is a lot of psychology that goes into fundraising and it’s critical to understand why that person chose to meet with you. We pitch differently depending on who we're sitting across from:

Notable LP and Advisor Companies

Our LP base is largely composed of over 50 operators who've built companies in Missouri across many industries. A lot of these folks can be early customers and even strategic investors for our portfolio founders.

What Matters

Getting the right names in early: Trust travels through relationships. I focused on converting a handful of meaningful names first: Jim McKelvey, Kemper, Shelter Insurance, and Mizzou. Once those were in, the next conversation started from a different place. It takes time and a lot of nos to get there, but each one compounds. The deck got updated after each pitch. There was always something to learn from every yes or no.

Getting people in the room: My Partner, Willy, and I started hosting dinners and happy hours. Short pitch, good people, low pressure. Attendees brought friends. Some of those friends committed without ever coming to an event. They just saw that someone they trusted was in. In-person conversion was consistently higher than anything else we did, so a big part of the job was just figuring out the right path to get the first meeting.

Treating it like a sales process: I set a goal of $20M with one close by October. We closed $24.5M. I kept tight communication with every soft commit and moved on quickly from anyone who was on the fence. A maybe in the pipeline is worse than a no. It blocks your time and pulls focus from people who are genuinely in. Every outreach was personalized. When I pitched, I rarely opened the deck. The best conversations didn't need it.

Adjusting the framing for each LP type: We talked to 400+ prospects and had 150+ meetings. Real estate investors were the hardest. Framing it as a high-risk 401(k) targeting 30% annualized tax-free returns with a 10+ year lockup landed much better than talking about DPI or IRR. Operator LPs got a different conversation than community-motivated ones. Figuring out which type you were sitting across from, and adapting fast, made a big difference.

Last Thoughts

If we'd raised in 2021, we'd probably have a different fund. Easier markets attract tourists in LPs and in founders. The tighter market forced us to be sharper about who we raised from, more creative about how we reached them, and more honest about what we were building.

We invest in people strengthened by struggle. It's been a grind over the last five years from the Scale Accelerator, to a $5M Fund I in 2023, to a $25M Fund II in 2025, to taking EquipmentShare public on the Nasdaq. At Redbud, we demonstrate the same thing we look for in founders.

Cheers to building in places you call home. 🥂

I was recently sitting in a room at a pre-seed summit, surrounded by some of the best early-stage investors in the U.S.

The conversation drifted to a question I keep coming back to: how do you actually make a decision when the signals are mixed? Over and over, the best investors in the room gave the same answer: their best investments were made against the grain.

The best early-stage investment decisions happen before the data agrees.

People talk about VC like it's a data problem. And at later stages, it increasingly is—you have revenue, retention, CAC/LTV ratios, comparable exits. But at pre-seed, you're often looking at a founder, a hypothesis, and a whiteboard's worth of conviction. The numbers don't exist yet. You're often not underwriting a business. You're betting on a person and a belief.

For example, Masayoshi Son invested in Alibaba after a single meeting with Jack Ma because of the look he saw in Jack’s eyes.

I’m not kidding.

It went on to become one of the most valuable investments in VC history.

Most great early-stage investments don't look great early. They look weird, niche, too early, or just confusing. This is the tension of early-stage investing: by the time something looks like a good investment, it often is too late.

The further upstream you invest, the more you are operating in a low-data environment—by definition. Over time, you earn pattern recognition, which is helpful, but it’s more data. Data can kill the best early-stage bets, so the ability to review opportunities without bias or data is when magic can happen.

I've found that the investors who consistently find the best companies early aren't necessarily the most analytical people in the room—they're the most curious.

The more you know—across industries and disciplines—the more surface area you have for something a founder is building to genuinely resonate. The curious and the creative lifelong learners make the best investors.

At Redbud, our buy box is almost entirely built around human criteria as we believe the greatest driver of venture returns is resilience. That's a deliberate philosophical statement about where alpha comes from at pre-seed.

We look for resilience, integrity, high velocity of execution, paranoia, a little bit of crazy, unique distribution, and a real secret about an industry. Network effects are a nice-to-have, but they're the one structural variable on the list — everything else is about the person. But deep down, the entrepreneur has a secret to build something special, so is it really that risky?

I’ve been an early employee and co-founder of a few startups, and my partners built EquipmentShare. As a VC, having an entrepreneurial background is incredibly helpful. The more you understand what it feels like to build, to fail, to pivot, to fight for something you believe in against long odds — the better you are at recognizing it in someone else across a table.

The problem with only using data is this: data describes the world as it was. But at the frontier (where the best early-stage bets live), data doesn't exist yet. The VCs who win consistently are the ones who allow conviction to override data.

They can sit across from a founder building something strange and unpopular and ask themselves: not 'does the market agree with this yet?' but 'is this person seeing something real that the rest of us aren't?'

By the time it’s obvious, it’s over.

Zapier is one of the best examples of a successful remote company. They were early pioneers of fully distributed teams and remain fully remote today, with roughly 800 employees and a strong internal culture.

Zapier documents everything, defaults to asynchronous communication, screens heavily for written clarity and time management, and measures performance through clear KPIs. Remote work succeeds when companies deliberately design operating systems that allow people to work independently.

Not everyone thrives in that environment. Remote work raises the bar on hiring because performance becomes visible quickly. Without the theater of office presence, productivity is harder to hide. Autonomous operators thrive. Weak hires surface faster.

For software companies, the upside is significant. Remote work unlocks access to global talent and reduces the coordination overhead of constant meetings. When communication is written and asynchronous, teams often move faster.

This matters especially for founders building outside major tech hubs. If you are a startup in Nebraska, convincing top engineers to relocate may be difficult. Hiring remotely removes that constraint and allows the company to compete for talent anywhere.

Many tech companies are developing strategies to hire from the Midwest. We recently met with an a16z Partner who expressed a desire to hire strategically in places like Missouri, an opportunity we are working to capitalize on. If you filter for Missouri on LinkedIn, you will see Google with >150 employees, Meta with >75, or NVIDIA with >50. Leaders in AI can hire remotely, so why can’t startups? Many Seed+ teams also outsource development overseas. It’s easier than ever to be nimble and build remotely with advancements in AI – knowledge is portable, output is 10x, or maybe you just hire an AI employee.

And the data speaks for itself:

About 86% of employees like to work alone for maximum productivity. Employees are most engaged when they work 60% to 80% of their time off-site.

VC Keith Rabois said:

“We have a view at Founders Fund that we will not fund a company that doesn’t work in person.”

That’s pretty short-sighted.

That position reflects a long-standing belief that innovation happens best when people work side by side. In some industries that is true. Hardware companies, for example, often need physical proximity to prototype and build.

But most software companies do not require that constraint. For them, remote work expands the talent market dramatically.

For us at Redbud, there's a lot of opportunity to invest in remote teams, especially when other people are looking in the other direction.

If you’re building a company that works remote (or doesn’t), pitch us. My DMs are open.