Robert Grazioli
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The operation
Bread's GP consists of 4 serial founders:
Rob Grazioli - Designer, Engineer, Sales Leader, Angel Investor
Brian Weinreich - Engineer, and Head of Product
Ben Redfield - Engineer, and Head of R&D, Angel Investor
Steve Vondeak - General Counsel, and Chief of Staff, Angel Investor
Together we've helped bring almost 200 products to market. Including a few of our own. One of which reached a $1.1B valuation in 2021.
We differ from most funds in 3 core areas:
Sourcing
Diligence
Operational Support
Sourcing good deals and getting early access
Sourcing is a marketing effort.
Classical channels are built through networking:
VC introductions
Their portfolio of founders
Panel / event attendance
Some are built through an online presence to source through organic web traffic:
Blogs
Youtube
Press
It’s important to note that we don't subscribe to the idea that talent only exists in The Bay. Our geographic presence gives us access to deals in both well established and smaller markets. We started our first two businesses in Syracuse, New York. Traditional locations are great sources of deal flow for us, but we find our presence in smaller markets—rural CA, Rural NY, and Canada (developing)—a key part of our ability to find unique founders and win deals.
Our Agency Pipeline
The most attractive deals we've seen have come through our Agency pipeline.
Our agency brings us looks at 500 founders annually.
These founders:
View us as thought-partners
Have often seen past success
Are often pre-product
Some are actively raising
Most aren't raising
Most are second or third-time founders
They're looking to move quickly
These looks are primarily driven by referrals from past engagements with founders. They're asking us to be involved. If we're interested, the conversation goes from them paying for support, to us writing them a check.
Our Brand of Support
Most founders come to us for help solving the most pressing technical challenge they are encountering as they plan to launch a new business. The inputs are usually a sharp, thoughtful founding team, some code cobbled together, and a unique vision of the world; the desired output is a product that works, produces efficient revenue, and has the potential to scale.
We indulge; imagine ourselves as the customer, and hope we are surprised and delighted by the vision the founders create. But behind every good story is a code repository, a user journey, or a growth tactic. Not only do to embed ourselves temporarily with a team to evaluate their ability to execute on a good story, but if they've convinced, we leverage our fifteen years founder experience to get them to market faster and more prepared than their peers.
Our team has broad and deep skills in design, product architecture, development, growth, legal, and investing. We bring all of these perspectives to bear to collaboratively identify an optimal path toward their first $1M in revenue.
In all cases, this usually entails:
a. Determining how best to build, approach, stack, tools, interface, brand, execution plan etc b. Determining whether or not the vision makes sense, and c. Creating a measurement system within their product to collect data, test against it, and measure traction.
Go-to-market
Getting to market is an alluring catch all. The reality is, being in market isn't the same for every market. Ultimately, we've found that early market success is typically a function of:
Moving really fast
Focusing on the right thing
Ensuring the basics are in place to unlock early scale
Putting pricing in front of users
Pivoting when something isn't working
Design
We believe that great companies build great brands from day 1. Which suggests it's intentional.
Brands are accretive to enterprise value— Making it easier to raise money for a business, and sell product to a company with clear communication, values, and identity.
They build team strength— Great brands can be powerful draws to talent, and provide resiliency for teams in tough times.
They are product sherpas— Acting as organizational philosophers, informing product, promoting healthy behaviors, and creating sticky experiences with customers and investors.
Engineering
Great architecture and development are essential to every great software business.
Great architecture can be measured in three ways:
Readability
Speed
Margins
There are ways to build for testing, and ways to build for scale. There are best in class data structures and tools, and data structures that are best for your business. There are secure and insecure ways of handling information. There are technical design choices that have proven success by sector, and design choices have been proven failures in this era. Finally, there are ways to measure product, and its effectiveness against KPIs---we help founders put good practices in place from the start to build enduring products, search for product market fit, and pass the high hurdles of series-A.
Hiring
Perhaps more than anything, we are team builders. We've experiences the joy and power of a great team. We've made bad hires, and we've made great ones. Every portfolio company entering our portfolio inherits our playbook for hiring world-class designers, engineers, growth leaders, and product minds.
Network
Finally, we help with people. We have a strong network of investors we work with and can help founders find fits when the time is right. We also have a strong network of technical designers, developers, and CTOs and can help teams grow responsibly when they are ready. Finally, we keep things fun, and try to have interesting events with portfolio founders for cross pollination, and hanging--with no white boards.
Results
When didn't set out two years ago to create an awesome fund. Rather we set out to help build things that matter with people that matter to us. The output of that random walk has been discovering an ability to help companies make the conversion from pre-seed to series-A within 18 months with about 80% efficiency, and often with substantial value creation in the process. Tracking the companies we have worked with over the past two years, and assuming we had invested $1,000,000 in each when we first met, we would have already returned a $50M fund in two years.
Why is this Compelling Today
We think Boring Magic fits the needs of today's market, because pre-seed needs a new approach, valuations are down, and underwriting now requires a technical bias.
We believe this vintage will represent the process of building new products to automate large boring industries. This process is different from the future of work or enterprise SAAS theses from previous cycles that drove remote work, gig work, and vertical SAAS implementations, in that the opportunity spans enterprise and consumer, and the technology is significantly more complex. As underlying models are often open-source or easily available, it requires more to architect great products, and to differentiate them in the quest for product market fit, with tech that is non-proprietary. Top down "finance only" investment teams focusing on Team, Market, Product, and Execution plan, are necessary but not sufficient for pre-seed investment. They must also be able to build, test, possess a fluency in data, and design. We believe we are leaders in this cross-functional future. Being a great founder, with a great idea, and reasonable technical chops is no longer enough. Today, great founders need and enlist help earlier on to maximize product traction ahead of series-A. They need not spend a year in an incubator, or venture studio to get this sort of support—they should get it by default from their partners.
Finally, this is a great market to invest. The market has corrected, the ecosystem has a renewed focus on building real profitable businesses, and some of the strange agency costs of unconscionably high valuations have subsided. To add we are in the early innings of functional AI (from chips to interfaces), a transformation of the energy sector, on-chain rationalization, and new marketplaces as vertical influencing trends take on a shifting world. Generally, the whole field is in play, which feels new and exciting.
