Founders: Julian Fialkow & Giuseppe Stuto
Head of Platform: Sophie Panarese
Founding: 2021
Mission: Back founders & companies who have the potential to grow really fast
Team: 3 & 100% Local
Workplace: Hybrid
LPs: Funds, Endowments & Strategic Investors
Stage: Pre-Seed & Seed
Focus Area(s): Fintech, SaaS, Developer Tooling, Blockchain, Healthtech, Property Tech, AI
Key Portfolio Companies (Locally): Causal Labs, Swivvel, Solon, Centaur Labs, & Monitaur
Fund Size: $37M, currently deploying capital out of Fund I
186 Ventures, named after the constant speed of light (186,000 MPH), is an emerging seed stage venture capital firm here in Boston investing thematically across software sectors. The team brings full operational and strategic support and an unparalleled network to founders when they need it most – at the beginning. They focus primarily on the Northeast of the US, although they have demonstrated an ability to deploy into high growth startups in San Francisco, LA, and other select US cities.
October 2024:
We gathered dozens of operators from the MGMT Boston Operators Club and local founders with the 186 Ventures team in October to discuss the evolution of our dear software markets, the status of some predictions for 2024 (all looking good!), and what’s on deck for next year.
General Partner Giuseppe Stuto led us through the following predictions for 2025..
- We will see more vertical AI applications manifest themselves within the Enterprise in a similar ways that SaaS moved from horizontal to vertical use cases
- We will see services business models more common and software budget purchasing models less common – SaaS may even be given away for cheap/free as a “way in”
- Capital efficiency, on a relative basis, will almost be required to create enduring & compounding defensible enterprise value. Details like procurement cycle lengths and creativity with non-dilutive financing, like leveraging revenue based financing tools for example, will all matter
- Specific to AI, premiums will be placed on applications that can actually get “reasoning” right. All purpose LLMs still have a ways to go and there are multiple approaches with the “jury still out” on how to get context and reasoning right. Infrastructure solutions that use general purpose or customizable knowledge graphs to help application developers get to 100% (enterprise acceptable accuracy) will emerge OR savvy application developers will fill the gaps themselves. We will likely see both, depending upon the specific case!
Thank you Giuseppe, Julian, and Sophie for a great discussion and evening!
January 2024:
We assembled an awesome group of 60+ operators & founders last Wed evening to kick off 2024, make connections, and share learnings. The MGMT Boston Operators Club’s mission is to help operators grow outside of their day to day and there’s no better accelerant to that mission than partnering with an up & coming Seed firm like 186 Ventures to bring such a great mix of Boston based builders together.
We started our mini-content session late because the conversation was so strong BUT wanted to give a shout out to Giuseppe Stuto for sharing some thoughts on what he’s seeing in the early stage ecosystem entering 2024 following his published Open VC article:
Capital Efficiency
Venture is a game of comparison and a company that raised $1.5m to achieve $1m in ARR looks a lot better than a company that burned $4m to achieve $1.5m in ARR. The latter is going to look less favorable against more efficient startups & business models that can scale faster with lower cost structures. VCs are looking for sustainable business models and revenue traction that are going to stand out against their peers in this market. And remember, that capital needs to be paid back!
Previously deemed unsexy technology will create massive opportunities
We are all very familiar with software and subscription models from the past 20 years of venture backed technology success. The next cycle of startups will likely take on a different flavor. Less information asymmetry and lower technical barriers will allow previously difficult industries like healthcare, defense, biotech, mining, etc. to become more accessible.
A new category of business owners will create standards
There is $70T of baby boomer generational wealth set to change hands in the coming years, $10T of which is tied up in small businesses. Yes, private equity is rolling some of that up. But there will also be changes in behaviors and needs for these “new owners” who will have different tastes than their forebears. This trend is going to take many different shapes and will be well worth watching.
Investor / Founder Alignment will drive decision making
Coming out of the ZIRP environment of 2021 and 2022, some founders have been paired with the wrong types of investors and some have even been stranded as the tide has gone out. In the years ahead founders and teams will be looking to partner with capital providers who can add value around tough experiences they’ve had themselves or those who have worked with founders through good and bad economic cycles. Experience will be at a premium. Same as it always was!
Thank you to Giuseppe, Julian & Sophie for hosting us. It was great to learn more about the work you do for Boston companies, operators, and the ecosystem at large. Excited to partner up on future events & ecosystem building!