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Partner to Vertical AI founders from inception.
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Nic Poulos shared thisLast week, I was honored to join as a guest for the inaugural episode of the DPI Pod from SIERRA Ventures The show’s name alone is a masterclass in double entendre: DPI / Deconstructing Preseed Investing In this first ep, Vignesh Ravikumar, Brendon Schmidt and I went deep on Euclid, why we focus on Vertical AI, and how we partner with founders at inception. Hopefully a helpful dialogue for founders interested in early stage VC inside baseball in the current AI era. Thanks again for having me guys!Nic Poulos shared thisAt SIERRA Ventures, we're fortunate to work with some of the top pre-seed and inception-stage funds in the industry through our Pre-Seed VC Community. I have spent the last 5+ years focused on building this network at Sierra. The perspectives from this group are always invaluable. Vignesh and I decided to record some of these Pre-Seed VC POV in a new interview series called Deconstructing Pre-Seed Investing (DPI Podcast) in which we highlight the frameworks, pattern recognition, and decision-making behind the best early bets, straight from the GPs defining the category. To kick things off, we had the opportunity to interview one of the best in the business - Nic Poulos, General Partner & Founder of Euclid, a vertical AI-focused fund investing at inception stage. A few things he said that stuck with us: • Speed is not a moat: Speed earns the right to build defensibility, but it is not defensibility itself. At inception, investors underwrite the team and the market. Traction is a few months of work. Earned insight lasts longer. • Own the authoring layer: The strongest vertical AI wedges start where a customer record is first created. Control that first touchpoint and you shape the workflow downstream. • Contrarian wins early: Nobody cared about platforms for plumbers until ServiceTitan. The biggest outcomes are rarely ever the hottest trend at the time. Retrospective consensus manufacturing happens after the breakout. To listen to the full pod, see the links in the first comment.
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Nic Poulos shared thisOne in three healthcare providers switching to Camber swap their EHR, just to access this AI-native payments layer. That's insane. EHRs are known as some of the stickiest incumbents in SaaS. Yet Camber Health — an AI-native claims engine trained on expert-labeled data, backed by a16z, now processing ~25% of daily claims volume in their beachhead of behavioral health — is unseating them. The secret? A unique combo of highly vertical fintech + outcomes-based AI. In this week's episode of Verticals, Luke Sophinos and I sat down with Camber co-founder Christophe Rimann to unpack the strategy (link in comments). In payment-heavy verticals, the company that owns the financial workflow may end up owning the customer... system of record or not. Learn how in our case study here: "Payments as a Shadow System of Record." https://lnkd.in/g26PhKhR
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Nic Poulos shared thisIn our Vertical Genome analysis, Mfg & Industrial scored high across nearly every dimension: Deal count, average deal size, valuation step-up, capital velocity, post-LLM formation percentage. The strongest signal across the board in 2025. Legal and AEC tell a more nuanced story. ✨ Get the full data in our 2026 Vertical Report — link in comments.
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Nic Poulos shared thisAI "software" vs. AI "services" is the wrong debate. The real question: are you building a defensible AI business? Over the last few weeks, AI services have been top of mind in the VC world. If you haven't seen them, check out the stellar manifestos from Jake Saper at Emergence Capital, and Julien Bek at Sequoia Capital (linking to them below). △ Pros: easier adoption, faster customer ROI, higher % of TAM. ▽ Cons: margins, defensibility, commoditization, retention. How should founders gauge where they stand? We asked Deepak Chhugani, the founder of Nuvocargo. He's built a thriving AI Services business in freight, raising $85M to date. We went deep on business model integrity in our latest Verticals pod. The takeaway: 4 questions every AI Services founder should ask. ----- The Four P's of Vertical AI Services 1) Performance Can you deliver measurably better outcomes than the incumbent solution? Not cheaper alone — faster, more accurate, or more consistent. If you can't point to a significant, concrete delta on performance your customer already measures, you're selling novelty. 2) Profit Can you structurally lower your cost to serve through AI? The best vertical AI companies don't just automate tasks at the margins — they redesign the delivery model so margins expand as they scale. Understand how your approach makes each unit of work structurally cheaper. 3) Pricing Can you price in a way customers already understand? Novel pricing models create friction. Innovate on what the customer gets for that price, not on how they pay. And resist the urge to capture every dollar of value upfront — it kills deals and discounts your ability to expand over time. 4) Partnership Can you embed deeper than a vendor to drive stickiness? The goal is to become infrastructure, not a line item. Startups that remain external vendors competing on cost will watch margins compress as AI commoditizes. The ones that become the orchestration layer have a shot at compounding moats. Performance. Profit. Pricing. Partnership. Four tests. If you pass all four, the distinction between "services" and "software" is semantic — and you have a path to a defensible AI business. ----- 💬 See comments below for: → Links to the AI Services guides mentioned above → More on the 4P framework at The Verticalist → Full podcast episode with Deepak @ Nuvocargo
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Nic Poulos shared thisWhat verticals are seeing the most formation activity? We tracked $1–5M deals last year as a proxy and ranked each vertical's share by quarter. In 2025, Automotive jumped six ranks. Education collapsed from 4th to 15th. Energy & Climate climbed steadily. Legal rose from 11th to 9th. If you care about formation trends, the headlines are years behind. ✨ Get the full data in our 2026 Vertical Report — link in comments.
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Nic Poulos shared thiseveryone's trying to use AI to remove humans but the opposite mindset might be key to success in vertical AI services. Not only humans deliberately in the loop, but as a key customer-facing aspect of the product... ...rather than as a begrudging necessity + a margin problem. Chris at Hanover Park is one founder taking this mindset. He recognized that human fund admins were one of the most important members of his team. Not only to help guide automation, but to build trust and capture tribal expertise — on an ongoing basis. So far, that approach is yielding some killer results for him, which we just discussed with him on the pod last week. $15B in assets on the platform, "raving fan" customers, a Series A led by @emergence-capital-partners. If you're interesting in how founders are implementing human-centric AI approaches: We pulled together a playbook based on Chris' learnings + posted it over at The Verticalist Here's a summary (and check out the full writeup below)
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Nic Poulos shared this57% of Manufacturing startups funded in 2025 were AI-native. how is one of the toughest categories for SaaS now the most AI-forward? we covered this in our Vertical Report, dropped last week. Of 2025 funded startups, we looked at the % that were founded 2022+... ...using "post-ChatGPT" as a proxy for AI-native. Here's the top 4: - Manufacturing & Industrials (57%) - Public Sector (56%) - Legal (53%) - Real Estate (52%) Compare that to the average of 46.3%, across all vertical software / AI. Certainly, this could just represent founders and investors recognizing, increasingly, that Vertical AI has incredible potential across the entire economy — even historically, less popular industries for VC backing or startup formation. and for Manufacturing, we can't count out the current hardware / robotics boom as a driver. That said — it's interesting to consider that some of the industries in which SaaS struggled the most might be producing the greatest greenfield opportunity for new AI-native solutions. ✨ Get the data in our 2026 Vertical Report below the fold
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Nic Poulos shared thisStop calling it an agent. Your buyers don't want a digital co-worker — they want a result. In our latest essay, "We Need to Talk About Agents," we tell a story of two innovators who did things differently — and their lesson for AI founders. In the mid-80's, GM argued that automation would help the company compete with increasingly formidable Japanese competitors. CEO Robert Smith bet his tenure on automation: he would invest $45B+ in factory robots. His premise was simple: replace costly, unionized labor with tireless machines. Better, cheaper, faster! They placed robots exactly where human workers had been. Job roles stayed the same. The pace and sequence of the assembly line were unchanged. GM’s implementation was widely panned as a disaster. Toyota, working with similar robotic technologies, asked a fundamentally different question: what becomes possible when a new capability is introduced into the system? That shift in perspective changed everything. Plant layouts were redesigned. Work cells were reorganized. Human workers moved from task execution to overseeing the system. The factory transformed into a coordinated human-machine environment. Success in Vertical AI requires a similar mindset. Winners will be those that, like Toyota, understand the moving parts of the system + potential of the tech, not those selling a shinier robot for the same assembly line. You must know the work, so you can re-imagine the work. Founders pushing "agents" risk creating tools that sound great in a pitch deck but are ultimately misaligned with the actual process being automated — and incapable of realizing the full, transformative potential of AI. If we can leave you with one idea: Toyota never sold a robot — they just shipped a better car. https://lnkd.in/eAN3eDMX
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Nic Poulos shared thisChris Hladczuk at Hanover Park scaled to $15B on platform in 12 mo... and closed a Series A led by Jake Saper at Emergence Capital. This week on Verticals, Luke Sophinos and I sat down with him to talk Vertical AI Services, in one of our best eps of the podcast yet. Hanover Park is the AI-native fund administrator. You may not think it's the sexiest market. But Chris might just change your mind. Fund admin is BIG, underlying $100T in global assets. But to replace $20B behemoths like SS&C, this couldn't be a SaaS play. You need the ability to provide high-touch trust. AND you need a zero-fault-tolerance offering. No CFO or manager cares about software does the job. They care that the job gets done well, and fast. And 1 bad review could poison the referral well of multi-$B funds. Sound familiar? Chris shared his playbook for high-fidelity Vertical AI Services: 1) Build the ERP, but internally — customers don't touch it. 2) Experts are critical — outcomes & learning trump everything early on. 3) ICP as a strategy — be selective and ensure "raving fans" only. The line between software, AI, and services is blurring incredibly fast. Those who get stuck in traditional conceptions of SaaS, margins, product delivery, UI, etc... risk obsoletion (Jake Saper wrote a great post on this too). If you're a Vertical AI founder, Chris' story is one you need to hear: 🔗 to the full episode below!
Nic Poulos commented on a post
3d
They zero priced an infra provider. That’s a boon for app layer companies imo! But couldn’t agree more defensibility should be top of mind for everyone, especially companies reselling tokens
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Full episode with Camber here. Thanks again for joining us, Christophe Rimann!https://www.youtube.com/watch?v=gXf8FsxLg1g
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Nic Poulos liked this😂Nic Poulos liked thisThe ANA, 4As, and IAB announced the findings from their joint task force, the General Unified Estimation and Standards Subcommittee (GUESS), which was convened to reconcile how the industry defines its core metrics versus how it uses them in practice. What follows is GUESS's inaugural report with eight important redefinitions, published on April 1, 2026. ROAS (Return on Already-Shopping): This reflects the industry's admission that we've all been juicing our ROAS number by simply retargeting people already likely to buy the product. We assumed CFOs would figure this out after a couple of decades, but…here we are. This beat out the close runner-up, Return on Ad-Stealing, in acknowledging ROAS has been a "steal someone else's credit" game for years. MTA (Multiple Theories of Attribution): After all, it's always just several competing models explaining why the same sale should be credited to different ads. MMM (Mostly Marketing Myths): Also jokingly called "Many Mathematical Maybes” by light-hearted wonks, like those who waste time on April Fools jokes, this is a sophisticated statistical model designed to explain the past while confidently disagreeing with other models. CTR (Curiosity Tap Rate): A begrudging acknowledgment that the true measurement is how often someone accidentally clicks an ad while trying to close it. CPM (Cost Per Maybe): Someone was shown your ad. Was that person paying attention? Perhaps? LTV (Loosely Theorized Value): The lifetime revenue projection marketers confidently quote in pitch decks, praying there isn't a follow-up question. KPI (Kind-of Performance Indicator): Updated to mean a metric everyone agrees is important until the bad results come in. CDP (Customer Data Pile): A system that receives customer data from everywhere, often without knowing exactly what to do with it. So it is just...there. The organizations stress that none of these redefinitions should affect campaign reporting; the numbers will remain exactly as inflated as before. These updates will be valid until April 1 of the following year.
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Nic Poulos liked thisOne in three healthcare providers switching to Camber swap their EHR, just to access this AI-native payments layer. That's insane. EHRs are known as some of the stickiest incumbents in SaaS. Yet Camber Health — an AI-native claims engine trained on expert-labeled data, backed by a16z, now processing ~25% of daily claims volume in their beachhead of behavioral health — is unseating them. The secret? A unique combo of highly vertical fintech + outcomes-based AI. In this week's episode of Verticals, Luke Sophinos and I sat down with Camber co-founder Christophe Rimann to unpack the strategy (link in comments). In payment-heavy verticals, the company that owns the financial workflow may end up owning the customer... system of record or not. Learn how in our case study here: "Payments as a Shadow System of Record." https://lnkd.in/g26PhKhR
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Nic Poulos liked thisNic Poulos liked thisIt's been 12+ years (4,399 days to be exact!) since Drew DeWalt and I co-founded Rhumbix, and today I'm excited to share that we have signed a definitive agreement for Autodesk to acquire Rhumbix! Drew and I started this company because we lived the problem: managing thousands of workers on large construction projects, tracking everything on paper and Excel. We shared a strong conviction that the people who build our world deserved better technology. That conviction became Rhumbix, and for the past 12+ years we've been on a mission to empower the construction workforce with technology that delivers value to #workersfirst. To our team, your grit and dedication over the years built something truly special. To our customers, you trusted us to change the way you work, and pushed us to be better every step of the way. To our board and investors,: you saw what this could be before anyone else did, and your belief made all the difference. We're excited to continue our mission on a new, global scale, and put the Rhumbix platform in the hands of hundreds of thousands of new users around the world! More in our blog post: https://lnkd.in/gzd3qPb4 The list of people to thank is way too long for a single LinkedIn post, but thanks for your belief and support over the years Jack Fuchs, Raymond Levitt, Darren Bechtel, Brick & Mortar Ventures, Eric Chen, Jerry Chen, Sarah Guo, Greylock Partners, Trevor Zimmerman, Blackhorn Ventures, Scott Lynn, Susan Heystee, Jigisha Desai, QRD®, Brandon Shelton, TFX Capital, Kaushal Diwan, Atul Khanzode, Eric Lamb, WND Ventures, David Glynn, Glynn Capital, Joyce J. Shen, Vlad Lukashevsky, Dan Levine, Tenfore Holdings, and most importantly...to all of our employees and customers who've been along for the ride. While the chapter of Rhumbix as a standalone business is coming to an end, it's the beginning of the next chapter of scaling our technology globally!
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Nic Poulos liked thisNic Poulos liked thisOne piece of cognitive dissonance between Silicon Valley and most vertical buyers is that they don't automatically associate "AI" with "better." A survey of software buyers found that labeling a product "AI-powered" actually lowered performance expectations, didn't increase willingness to pay, and had almost no effect on trust. There was a flurry of "what's my AI strategy" panic buying over the last 24 months. I think that era is long over. Today, that customer — the fleet manager, the underwriter, the clinic administrator — is neutral at best about AI. They care about whether you can help them make more money. The best Vertical AI companies already get this. They sell the outcome, not the technology. Nobody walks into a restaurant and asks what brand of oven is in the kitchen. They ask if the food is good. Stop leading with "AI-powered" or "AI-enabled." Start leading with the problem you actually solve.
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