Investment thesis (Outlaw 1.0)

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Good morning 👋

This is the fourth and final essay in a series about how I think about building a thesis-driven fund from the top down.

We started with guiding philosophies, then covered investment themes, then narrowed into investment theses.

Today we bring it all together.

This is the overarching investment thesis for Outlaw 1.0:

There are two parts to that sentence. We'll unpack the second part first, and then cover the first.

P.S. This is a longer post and will get clipped by Gmail. We recommend clicking ‘Read online’ at the top of this email to get the full, unclipped version.

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Investment thesis

As we covered in the first essay of this series, several guiding philosophies have led to our thesis being centered entirely around the individual before the company, the market, or the technology.

Very few companies are responsible for the bulk of returns in the venture asset class. Very few people within those companies are responsible for the bulk of the decisions that led to scale. The secrets to scale are underpriced, they are not public, and very few people have them.

Resumes are proxies for execution ability. Prior exits and founding employee status at outlier companies are the strongest signals we've found.

We believe the most talented people in the world were once unknown names. In a world of consensus investors, the most upside belongs to those willing to do the work finding talent before it becomes obvious in hindsight.

The founding engineer at Cursor operates with different odds than a 24-year-old first-time founder. The founding GTM person at Ramp possesses different capabilities than someone with only junior sales roles. Elite employment or prior exits serve as high-signal proxies for execution capability - not guarantees, but dramatically better odds.

Our pipeline reflects this, and 100% of tracked companies feature founders with either prior successful exits or were elite early performers at companies like Cursor, Decagon, Attio, ElevenLabs, Ramp, Notion, and others.

Identifying out-of-distribution individuals is only half the equation. The other half is being the type of investor they actually want on their cap table.

Being the "chief capitalist" requires an investment product that provides exactly what these types of individuals need at the moment we start to get involved.

From working closely with hundreds of stealth and pre-seed founders over the years, a few patterns have emerged.

Starting a company has never been easier, and the barriers to building product have collapsed. Cursor, Lovable, and Replit write code. AWS provides infrastructure. Stripe handles payments. Decagon handles support. Claude and OpenAI offer intelligence APIs.

Building is no longer the bottleneck. Getting people to care is.

This informed how we designed the firm as an investment product.

We have tried to position the media business as a scalable asset that can be used in parallel to solve for the major bottlenecks we hear from stealth and pre-seed founders:

Here is how I have condensed the goal of Outlaw to new LPs:

Find the most talented founders

Underpriced individuals with a history of out-of-distribution execution ability.

Previously exited businesses, responsible for creating scale at companies reaching $100m ARR, and other signals of elite performance.

Building in the themes we care about

Artificial labor markets, the token revolution, Software 3.0, and the modernization of the private investment firm.

These four theses sit at the intersections of the macro investment themes we've identified. More on each in Part V below.

As early as possible

Average entry valuation of less than $12m.

We believe in the art of finding under-discovered talent. The most upside belongs to those willing to do the work before it becomes obvious.

Develop an investment product that meets their needs

Use the newsletter as scalable infrastructure to help founders build distribution, close hard-to-win talent, and find long-term capital partners. The media business is not separate from the fund; it is the fund's core competitive advantage.

The fund objective is to own 1.5% of a $5b business. Every decision we make (portfolio construction, follow-on strategy, types of founders we pursue, etc.) is in pursuit of that outcome.

Fund I at a glance:

It is difficult to understand the fund strategy without first understanding the newsletter business, its purpose, who it attracts, and why I continue to write it.

The newsletter is the "front-end" for my thinking. It is a surface area expander that gives me scalable access to people and ideas I otherwise wouldn't come in contact with. Hard-to-meet people are attracted to writing, they proactively choose to give me their attention each week, and I have created unique ways to parlay that trust into deals that match the fund thesis.

The newsletter and the fund are interconnected, and each flywheel compliments the other.

While the fund invests in founders rather than markets, we maintain active theses in four areas where we believe the next legacy-defining businesses will be built.

These theses are downstream from the broader investment themes I outlined earlier in this series, which themselves flow from a set of guiding philosophies about how the world works.

In the second essay, I laid out five macro themes shaping the world over the next decade. Below is how each thesis maps back to those themes.

As I wrote in the themes essay, companies are operating fine with dramatically fewer people. Elon firing 80% of Twitter and the platform continuing to function was the mask-off moment. Every company realized they were carrying corporate bloat. 500,000 white-collar software workers are expected to be laid off over the next 2-3 years.

For artificial labor, the TAM is labor markets.

The pursuit of the 10-person billion-dollar company is no longer theoretical. The only way to reach the scale required for ~$100m ARR without a proportional headcount is by consolidating everything that doesn't differentiate: finance, accounting, support, HR, legal - these become AI + workflow + one person overseeing output.

Revenue-per-employee is becoming the new North Star metric. Companies like Midjourney ($500m revenue, 40 FTEs) and ElevenLabs ($100m revenue, 50 FTEs) are proving the model works today.

As more of the world economy transforms around intra-computer coordination, every company will need to answer the question of which part of the token factory they are servicing.

Every business is becoming a token factory - supplying, building, or orchestrating tokens (data, identity, money, expertise) that feed AI agents. Tokens are the DNA and feedstock for AI, encoding who we are, what we own, what we do, and what we want.

Three categories define the space:

Every software business can be modeled as supplying, building, or managing token factories, and the companies that control the most valuable token streams will define the next era.

We are in the middle of a generational re-platforming of the dev tools stack.

The entire dev tools stack is being rebuilt from first principles.

Like Auth0 eliminated months of authentication work and Stripe abstracted payment complexity, Software 3.0 needs equivalent foundational layers for AI-native development. The definition of "developer" is expanding dramatically - from 17m JavaScript developers today to a projected 100m in the next decade.

We like the picks-and-shovels approach: the platforms and tooling that enable this new generation of builders to create without writing code.

The private markets in 2026 are at a similar inflection point as traditional finance was in 1984, when Bloomberg arrived to provide real-time data, instant calculations, and all bond info in one place.

If you look under the hood at different funds today, you will see a massive gap in the sophistication of their workflows. The best funds operate more like software firms than financial services businesses, and there is a high correlation between firms who have rebuilt modern workflows and firms who have distributed capital and been able to raise fresh funds.

We think the companies building the infrastructure for this transformation - the AI-native tools for deal sourcing, portfolio monitoring, LP reporting, and fund operations — will capture an enormous market.

These theses inform sourcing (content attracts founders building in these areas) and selection (pattern recognition for quality founders in these domains), but they don't constrain opportunistic investing outside these areas when exceptional founders appear.

For a deeper breakdown of each thesis, including the companies we are studying in each category, read the full investment theses essay.

Fund updates

Thanks for following along as I document how I think about early-stage investing and the frameworks that have lead me through firm building.

For those of you curious about Outlaw, I have included more below.

For those of you looking to get more involved, I’m happy to chat.

My calendar is linked.

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