While the promise of the cryptocurrency market and its goal of decentralization is hotly debated, blockchain technology continues to attract thousands of talented developers and founders. They see a disruptive technology that provides a new way of building companies and connecting society. Some estimate that there are over 20k active blockchain developers, growing 100% year-over-year, and over 83m unique crypto wallets. But it’s still early days, and there’s a significant need for infrastructure to support this massive technological shift.

Building web3 applications in today’s market isn’t efficient or scalable. A major challenge for developers working on NFT projects, web3 social, token gating, and other decentralized applications is retrieving, managing, and utilizing the user data necessary to build strong user experiences consumers have grown accustomed to.

Coherent is solving these challenges with core infrastructure that provides web3 user data to blockchain developers via a suite of APIs. With Coherent, developers can do in minutes what used to take weeks. The product powers a rich set of user experiences using the most common pieces of blockchain data, sharing information such as: human-readable transaction data, tagging for query transaction types, aggregating all NFTs in a user’s portfolio that includes metadata, cached images, floor price, and rarity, balances for tokens on a given chain, and more. 

Working toward its vision of a multi-chain offering, the company is starting with products for the Ethereum developer community, followed by Polygon and Solana.

Our investment in Coherent is particularly exciting for us as the company is led by a Foundry alum – our former intern, Carl Cortright, who we fondly referred to as “CTI” (Carl The Intern). Carl worked with us while studying machine learning and computer science at CU Boulder. He went on to intern for Coinbase, ultimately joining after graduation and working his way to senior software engineer and a member of the Coinbase Ventures team. Carl is joined by fellow Coinbase alums, Justin Choi and Ellen Choi. At Coinbase, the team worked together to develop critical platform infrastructure and experienced first hand the problems they’re solving at Coherent. In keeping with our network-driven investing strategy, Foundry co-led Coherent’s seed round alongside our partner fund Kindred Ventures, who bring significant expertise in web3 and company-building. Matchstick Ventures, a Foundry partner fund, and Coinbase Ventures also participated in the round, and the company recently joined Techstars Boulder’s summer 2022 class.

We are thrilled to welcome Coherent into our portfolio, to welcome Carl back to Foundry, and to support the development of core infrastructure in web3. You can learn more about Coherent and the financing here. 

Industrial workplaces are complex and dynamic environments dispersed over large geographic footprints. The efficiency, safety, and effectiveness of frontline workers often depend on timely communication with colleagues in other geographies, along with access to information contained in various formats on different systems throughout an enterprise. While the ubiquity of mobile devices solves some of these problems, they require users to hold them and use their hands to manipulate them. This activity is challenging, if not impossible, in many workplace situations, such as repairing industrial equipment. 

RealWear has solved the “hands-on” issue with head-mounted wearable devices and in doing so has become the market leader in assisted reality wearables for the frontline industrial workforce. Long regarded as the best solution for collaboration, looking up reference information, and logging work activity, RealWear devices can be attached to any hat, including the omnipresent hard hats worn by frontline workers in industrial settings, to deliver real-time data and communication capability anywhere. Built on Android technology, RealWear allows workers to have hands-free access all their daily applications, including videoconferencing, CMMS, over 100 workflow and data visualization systems, and any Android-based application. 

Foundry led RealWear’s Series C financing. Andrew Chrostowski, RealWear’s co-founder and CEO, is an Air Force veteran and former President of Scott Safety, a Tyco International company acquired in 2017. He has spent his career as an operator in the industrial applications space. In addition, Brad has known one of RealWear’s co-founders, Ken Lustig, for many years.

At the onset of Covid, enormous energy was focused on enabling office-based workers, especially in non-office environments. While many frontline workers continued to work at job sites during Covid, much less attention was paid to better enabling their efficiency, especially when interacting with their often remote office-based peers. We believe that technology enablement for frontline workers is the next phase in transforming the 21st-century workplace, and are excited to be working with the team at RealWear to help enable this transformation.

“The technology is magical.”

When we hear a statement like this from one of our partner funds, we pay attention. This one came from David Waxman of TenOneTen Ventures several years ago during a portfolio review. He was referring to a portfolio company called Regard (formerly known as HealthTensor), which is building an artificial intelligence co-pilot for physicians to help diagnose medical conditions.

If you’ve seen a doctor recently, they’ve likely had a laptop in tow. Physicians are spending substantial time on documentation, which takes away from the time they can spend with patients. While healthcare technology has significant benefits, it often makes a physician’s job harder, not easier. Most physicians did not endure extensive schooling and training to spend more time on documentation than with patients. With nearly 50% of physicians reporting burnout in the wake of the COVID-19 pandemic and 20% of the clinical workforce leaving the field from 2020 to 2021, this is a critical time for our healthcare system.

Regard’s mission is to bring medicine into the modern era through software that enhances physicians’ workflows and enables them to focus on what matters most—providing the best available care and improving health outcomes. Integrated with leading EMR providers, Epic and Cerner, Regard’s proprietary algorithms mine and then aggregate a patient’s entire medical history via their electronic health record. The software analyzes and synthesizes this patient data, recommends diagnoses, automates note-taking, and even captures missed revenue. As one user describes it, “It’s like having a high-quality medical intern in my pocket.” Since its launch in 2020, Regard’s technology has been used with 30,000 patients and has diagnosed over 420,000 medical conditions that providers might have otherwise missed.

The company was co-founded by CEO Eli Ben-Joseph, COO Nate Wilson, and CTO Thomas Moulia, who, together with the broader team, bring a unique and important combination of technical and industry expertise. We were introduced to the Regard team by two of their seed investors, TenOneTen and Calibrate Ventures, both in the Foundry partner fund portfolio. In line with our network-driven approach of investing with our partner funds, Regard also fits in our Glue theme, alongside companies like Spekit and Code Climate, which similarly leverage integrated technology to enhance user workflows. We co-led Regard’s $15.3m Series A with Calibrate, alongside existing investors TenOneTen and Susa Ventures and new investors Brook Byers and Drew Houston.

We’re thrilled to partner with Regard on its mission to advance healthcare. If you know a healthcare provider, encourage them to check out a demo. While it may not be actual magic, it’s pretty darn close.

We are strong believers that the pace of innovation over the next 20 years will dwarf that of the last 20. Technology is no longer an isolated sector. It touches all aspects of our economy, speeding change and creating opportunities at every turn. The power to introduce new products used to be reserved for large corporations and the occasional startup. Now, that power sits at kitchen tables, in garages and in the minds of dreamers everywhere. Good ideas, capital to finance them, and the competition to nurture visionary founders are expanding in amazing and surprising ways from coast to coast and throughout the world.

We created Foundry in 2006 as champions of innovation and entrepreneurship, believing that great companies could be created and built throughout the United States, rather than only in a few cities. Through our involvement in organizations like Techstars and Kauffman Fellows and thought leadership through books such as Venture Deals, The New Builders, and Startup Communities, our goal remains to support and nurture entrepreneurship broadly. 

As a network of founders, funders, and operators, we drive leading-edge change. Foundry is not a pilot, but a guide to power the founders and partner funds in our portfolio forward. It is the collective power of the network that creates our advantage and drives our unique approach to investing. 

The Power of Community

We’ve long believed in the power of community and, since the beginning of Foundry, have tried to foster strong ties between those with whom we work. We are attracted to humble, hardworking founders who recognize the power of community. The early members of this group set a tone that has become the cultural underpinning of our network. We often hear from founders that they feel a special connection to community through Foundry’s investment in them. We are deliberate about our efforts to strengthen these connections. 

In the early days of Foundry, when we were investing out of a series of four early-stage funds (each $232M in size), our network primarily consisted of the founders and CEOs of our portfolio companies. We gradually expanded the network to include other executives working at the companies Foundry invested in, and periodically held get-togethers and events for different groups of executives. 

This thinking started to evolve in 2016 with the formation of Foundry Group Next and the expansion of our investment focus to include investing in venture funds – what we call our partner funds. We had long been personal investors in other venture capital funds. Institutionalizing this work, and greatly expanding the capital we had to invest in individual funds, significantly changed the nature of our relationship to the GPs we backed. We were now an important LP and one that didn’t look like any of their other institutional LPs, given our role as GPs at a venture fund. This puts us in the position to be sought-after investors and to have a closer-than-typical relationship with the partner funds in our portfolio. We share a GP experience with the managers of the funds in which we invest. As this partner fund network evolved and grew, it became a powerful lever for us. Through it, we in effect have over 100 GPs working with us as an extension of our team. 

Through our partner fund network, we have become investors at the seed stage in thousands of companies throughout the country, in communities, and in some cases in domains, that we could not reach on our own. Strong and mutually beneficial connections with talented GPs in our network give us a different and expanded perspective on technology and investment trends.  

Themes vs Sectors

This expanded view has also helped us evolve our approach to investing. In the early days of Foundry, themes almost exclusively guided our investments. Themes are different from sectors (which was the traditional way that many venture investors described their investing activity). Common sectors include SaaS, crypto/blockchain, enterprise software, and consumer. To us, this is a stovepiped way of thinking about the technology landscape and tends to describe a target market instead of underlying technological attributes. In contrast, themes describe long-term, technology trends. 

Our themes are horizontal in nature and are often based on protocols, standards, or market shifts that we believe are on the cusp of widespread adoption. The technology underpinning them has the potential to drive a cycle of innovation and company creation for decades and to spawn many companies. Our themes have evolved over time, sometimes consolidating, as in the case of what we called “protocol,” and at other times spinning out as when we started describing “adhesive” as separate and distinct from “glue,” which was how we first categorized adtech companies that fell in our glue theme. Some of our original themes are no longer areas in which we choose to invest (for example, “digital life” is an area we don’t focus on anymore).  We arrived at other themes as markets changed and matured (“adhesive,” mentioned above, and “marketplace” are two examples of this). In many cases, we created not just content around our themes, but entire conferences (our Glue conference is still running, attracting nearly 500 attendees annually to talk about the future of connective technologies). These themes, evolving and changing as they do, have guided our investment lens and have focused our work.

From Thematic Investing to Network Investing

Given the extensive breadth, depth, and quality of our partner fund network, the majority of our deal flow at Foundry now comes from this source. While we sometimes look outside of it for opportunities, our main focus is the many compelling companies in our extended Foundry network. By combining our expertise with that of our partner funds, we’ve expanded the areas in which we invest, relying on the signal from our partner funds. We have an opportunity to see companies develop from an early stage. This provides a unique and strategic advantage in the market. While our investment themes have shaped our expertise and still inform our interests, we now invest beyond these themes, expanding our aperture by leveraging our network of more than 40 partner funds, and over 100 GPs and investment professionals.

Across our portfolio of partner funds and companies, we look for compelling founders obsessed with the problem they are solving. We focus on companies where technology is core to the business, especially where it creates defensibility in large markets or markets that don’t currently exist, but which we think will develop into large ones. Foundry focuses on the U.S. and Canada but within that, we are geographically agnostic. We were early believers that great companies can be built anywhere, and that holds true today more than ever. 

Network-driven investing gives us an effective way to pick up the signals that lead to fast-growing technology companies – especially those operating in new markets or pioneering new technologies. Through our partner funds, we’re on the cap table of promising companies early and can move quickly with a Series A investment (or occasionally a B or C round).  It’s also how we’ve always liked to work: in collaboration with others. As seasoned investors, we offer our expertise to our partner funds, while we continue to stay curious and learn from them and our network at large.

When we started Foundry in 2007, our aim was to connect talent with capital, especially in the places and among the people the rest of the technology industry had not yet discovered. We knew that running a nationally focused, early-stage venture fund from Boulder was a trail we had to clear and navigate on our own. But we felt that venture capital had become somewhat stale – almost stagnant – in how funds (and partners) operated. Perhaps it was time for a different approach, new ideas, and new thinking about how to operate a venture fund. We also thought we could have a lot of fun together doing it.

Back then, there were far fewer early-stage venture firms than there are now, and most of the activity in venture capital was concentrated in Silicon Valley or Boston. But we believed that there were advantages to being outside the echo chambers of the coasts. We also felt that many of the accepted ways that venture capital firms operated – from the formats of the ubiquitous Monday Meeting to the way firms sourced and worked on new investment opportunities in silos, to the limited access to resources (and the full partnership) that most portfolio companies had – needed reimagining. Not all limited partners at the time understood our thinking or agreed with us, but we were committed to being innovative and experimental and realizing our vision for a different kind of venture capital firm. 

That meant, for starters, that we would support entrepreneurial ecosystems in communities everywhere – we would invest across the U.S. – rather than being a local or regional investor, as most firms were at the time. Significantly, we approached investing in a way that was much more collaborative than others. Gone was the idea that a single partner worked on a new investment opportunity until they decided to bring it to the full partnership for an up or down vote. Instead, we worked collaboratively at all stages of the investment process, providing multiple points of connection for prospective investments; this allowed us to bring different perspectives and skill sets. We aimed to be more fluid than other firms – separating deal sourcing, due diligence, and board work. Often different partners were responsible for each phase of the process and frequently multiple partners worked with a company after we invested. It wasn’t (and still isn’t) unusual for us to shift board seats around from time to time to map best to a company’s needs.

Today, nearly 15 years later, we’re happy to see many of the ideas that we practiced early at Foundry take hold across the industry. Perhaps most important, venture has become much more distributed and has spread to communities not just around the United States but around the world. Boulder itself has a thriving entrepreneurial ecosystem, one we’re proud to have helped to seed. While many venture firms still operate much as they did 15 years ago, many are becoming more fluid and flexible in their thinking and decision-making. We hope we played at least a small role in changing some of these behaviors.

Just as our industry has evolved, we continue to do so, as well. We’ve grown from our four original founders to 15 people, working in multiple locations to support more than 70 portfolio companies.  In addition to investing directly in companies, we now invest in other venture funds which we call our “partner funds.” There are 45 partner funds in our portfolio.