May 15, 2025
Hello All,
Welcome, for any newcomers – this is our newsletter where we talk venture capital (“VC”), Connetic, data, and sometimes funny stuff. We are a people-oriented firm, so we love to start with a personal note.
I hoped to run The Flying Pig Half Marathon this past May 4th. I had grand visions inspired by our great CFO Brian McDermott, who once clocked his fastest time on this hill-heavy course. I imagined myself joining the ranks of Connetic’s endurance heroes.
But.. as race day crept closer, the long runs did not. Training took a backseat to, well, everything else. Still, I loved getting to
So yes, I said I hoped to run. But if you remember the weather that weekend… a little gloomy. Plus, I had a friend visiting Kentucky for the first time! Instead of GU gels and early bedtimes, we opted to enjoy ourselves, including a highly competitive Par 3 day in Newport which included a few familiar faces from our work crew!
Let’s just say… I’ll be more prepared next year. Or at least have better excuses to share with you all. This year at least, I’ll always treasure my putt putt winner’s pride.
In today’s update:
- Q1 2025 in VC-land Looked A Little Different, But We Do Things Differently
- Data: How Many Humans Are Needed to Build the AI Future
- Connetic Corner: The Connetic Show Goes On
- Super Interesting Reads: Listens, sent some podcast recs this time
- Stuff That’s Cool AF
By: JD Audena
Venture Associate
Q1 2025 in VC-land Looked A Little Different, But We Do Things Differently
If you only watched the headlines, you’d think innovation happens in just four places.
In Q1 2025, more than $58 billion in venture capital flowed into Bay Area startups alone. Add New York, Boston, and Los Angeles, and those four markets captured over 70% of total U.S. venture dollars. It’s as if the venture industry has developed geographic muscle memory. The early 2020’s prompted a great distribution of investment opportunities but now it appears when uncertainty rises, money retreats to the familiar.
But here’s what that picture misses: over 1,000 other cities. And countless overlooked opportunities.
The Concentration Problem
Concentration isn’t just a risk in asset allocation, it’s a risk in venture decision making too.
While capital flooded coastal strongholds, Chicago saw just $600 million across 74 deals, Denver pulled in $800 million from 59, and Miami startups raised about $900 million across 67. These aren’t rounding errors; these are cities building real companies. Non-coastal hubs have a lot of startups many consider to be operating more efficiently, growing more sustainably, and raising far less capital to achieve more.
We’ve seen it firsthand.
In Q1 alone, Connetic reviewed hundreds of companies through Wendal® from 3 countries, 37 U.S. states, and many more cities. That’s not theoretical reach, it’s a real-time glimpse of how talent, ambition, and innovation are distributed far more widely than capital.
Why Most Investors Miss It
Here’s a hard truth about traditional VC: it’s not designed to look everywhere.
There are plenty of firms designed to invest within a few blocks of their office. They rely on network referrals, curated intros, and pattern matching based on past successes. It’s a fine strategy in and of itself. But in our view, if you want to build a fund that finds what others miss, you have to operate differently.
And that’s exactly what we’ve done. We source through pitch competitions in Salt Lake City. We receive inbound deal flow from Toronto and Mexico City. We get referrals from founders we backed years ago. We don’t wait for press releases; we go upstream and find signals before they become noise.
What Rise of the Rest Got Right
Steve Case’s Rise of the Rest was published in 2022, but its thesis feels more relevant than ever in 2025: talent is everywhere; access isn’t. The book highlights founders in cities like Detroit, Indianapolis, and Chattanooga who built category defining companies without ever setting foot on Sand Hill Road.
In our view, that’s not the exception, it’s a rule worth betting on.
What It Means for You
The best companies of the next decade won’t all emerge from Palo Alto. They’ll come from garages in Charlotte, industrial parks in Alberta, and incubators in Columbus. And when they do, we’ll be there and in traditional hubs early, not just with capital, but with conviction in our strategy.
Because we believe:
- Founders build great companies everywhere, not just where it’s convenient to invest.
- Valuation discipline isn’t a constraint, it’s an advantage.
- Backing companies off the beaten path creates stronger partnerships, less dilution, and more upside.
Our thesis is simple: go where others won’t, invest early, and stay long. This is how we build enduring value. Not by following the crowd but by doing things a little differently.
Data – How Many Humans Are Needed to Build the AI Future?
So…how does this make you feel about public markets? From my perspective, it looks like this is 2x worse than peak Covid. Whoa!
The team has been traveling more in an effort to bring more of the Connetic show out in the community. I had the chance to “Reverse Pitch” during NY Fintech week, which put me in front of founders, investors, and other people from the ecosystem to pitch Connetic, our unique funding process in venture capital and tell everyone how founders can get in touch. If you know any fundraising founders, please direct them to engage with us here: www.wendal.io/invite/connetic
But nothing that could be shared with you, our dear readers, is more worthwhile than the news we announced May 12th. See our Press Release sharing the great opportunity expanding access to our fund offering through Fidelity Brokerage Services and National Financial Services!
It’s been a great effort under Brad’s leadership, and it’s been incredible to watch the process, see the outcome, and continue to realize the vision Connetic is trying to bring to the world.
Super Interesting Reads
- Lenny’s Podcast is about Product, Growth, and Career. This episode was super heavy on the Growth. Jerry Colonna shares a framework from his coaching practice. Known for his radical-self-inquiry approach, Jerry helps leaders uncover the unconscious patterns that hold them back and empowers them to lead with authenticity, compassion, and clarity.
- The Tim Ferriss Show – Chris Sacca — How to Succeed by Living on Your Own Terms and Getting into Good Trouble (#790)
- Tim Ferriss is a renowned interviewer, and his guest Chris Sacca happens to be a phenomenal venture investor. The conversation is mostly wholesome and full of wisdom.
Cool AF of the Week
For all the turmoil of the year, the S&P 500 index ended slightly in the green YTD as of May 13, 2025, and I think that’s pretty cool.
Thanks for reading!
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