How to Build, Invest and Buy in ConTech: Patric Hellermann’s Founder Framework
Patric Hellermann from Foundamental shares what he actually looks for in ConTech founders and why most founder pitches miss the mark. AI on a slide means nothing without execution proof. The real VC problem: mid-market ConTech is underfunded because it requires capex but VC expects software margins. Construction needs systems integrators, not more point solutions. And corporate buyers should use a simple “elevator test” – can a vendor demonstrate working software in the time it takes to ride an elevator?
Founders pitch AI. Corporate buyers ask about integration. VCs want billion-dollar outcomes. Somewhere between these three parties, the ConTech market is working, but not optimally. The gap isn’t just frustration – it’s capital allocation inefficiency.
In a fireside chat with Owen at Contech Connect Paris, Patric Hellermann of Foundamental broke down what he’s looking for as an investor, what’s actually working in founder pitches, and what’s broken about how construction evaluates vendors. The conversation reveals structural problems that no amount of AI-generated marketing can fix.
What Foundamental Actually Looks For in a Founder
It’s not about the idea, it’s about the founder understanding their bottleneck
Founders pitch. VCs listen. Most of the time, they’re talking past each other.
Hellermann’s bar for a founder is specific: Do they understand the actual bottleneck they’re solving for, and can they credibly explain how they’re going to address it? Not in five years, not “at scale” – right now, with the resources they have.
This sounds straightforward but it’s surprisingly rare. A lot of founders show up with beautiful market opportunity slides. The market is $100 billion. Growth is accelerating. Competitors are vulnerable. None of that matters if the founder can’t articulate what specific constraint they’re removing and by how much.
“You need to have your feet on the ground about how you’re doing it this year,” Hellermann said. This means knowing your first customer, understanding their specific workflow, and being able to show what you’ve built works for that constraint in that workflow.
Too many pitches skip that step. They jump from “This problem is big” to “We’re going to be the platform” without the middle ground – the specific, credible path from day one to customer one.
- Understand the bottleneck. Can you articulate specifically what constraint you’re removing, not broadly what market you’re addressing?
- Show working software. Demoing something in a real workflow beats pitch deck promises every time. Founders who can show execution win credibility.
- Identify the path to customer one. Not customer one thousand. Customer one. How do you get it this year with the resources you have?
- Be credible about reaching $1B. VC needs to believe a billion-dollar outcome is plausible, but that credibility comes from understanding your bottleneck and customer one first, not vice versa.
Why AI on a Pitch Deck Means Nothing on Its Own
Execution beats hype, always
Every founder in ConTech has AI on their slide deck now. Every one. The word appears in pitches for project management, site monitoring, design, procurement, scheduling. AI is everywhere. But AI on a slide tells you nothing about whether the founder can actually build something that works.
Hellermann’s pragmatic take: AI is a tool, not a differentiator. What matters is whether the founder can use it to solve a real constraint faster than someone else. If three companies are all building “AI-powered scheduling for construction,” and they can only explain the AI part (large language models, training data, inference speed), but not why their approach to scheduling is better, then the AI is just noise.
The founders winning right now aren’t talking about AI in the abstract. They’re talking about what they’ve built, what they tested with customers, and how it performs against the constraint they’re solving. AI is the mechanism, but the mechanism isn’t the story.
This distinction matters for investors because it separates hype from execution. It also matters for corporate buyers because it means you can’t just evaluate vendors based on how much they talk about AI. You need to see working software solving your actual workflow.
You need to tell a grand story, but you need credible ability – not just ‘here’s my error’ but actually credible. Reverse engineer how you get there, identify the bottlenecks, and both feet on the ground how you’re doing it this year.Patric Hellermann, Foundamental
The VC Funding Gap Killing Mid-Market ConTech
Why CapEx companies can’t raise venture capital
There’s a structural problem in ConTech funding that doesn’t get talked about enough: The middle market is underfunded, and it’s not because the opportunity isn’t there. It’s because venture capital and capital-intensive businesses are mismatched.
Hellermann addresses this directly. Ninety-nine percent of founders who need capital expenditure (hardware, 3D printing, robotics, manufacturing equipment) won’t find venture capital as the right asset class. VC expects software margins and a path to billion-dollar outcomes. A founder building a 3D printing system for modular construction can’t achieve software margins, even if the market opportunity is enormous.
This creates a funding gap. The founder can’t build on pure venture capital. Banks won’t underwrite the risk. Corporate venture capital might, but that’s a smaller pool. Strategic customers could fund it, but they have to be educated and willing to take risk. And many aren’t.
The result: Capital is concentrating in pure software (which VC loves) and materials (which have steady customer demand and don’t rely on venture). The middle – robotics, automation, custom manufacturing – is starved for growth capital.
So how do you solve for this as a founder? Hellermann’s answer is to make the story so compelling and credible that venture capital says yes anyway. That requires reverse-engineering the billion-dollar outcome: What do you need to build, what are the specific bottlenecks you need to solve, and how do you get there with the capital you have access to? Then you sell that story to VCs, corporate venture, and your customers simultaneously.
It’s harder than pure software. But it’s doable if the founder is clear about the path and credible about the execution.
Why Construction Needs Systems Integrators, Not More Point Solutions
The market is solving for depth, not breadth
Construction is drowning in point solutions. An app for this phase, a tool for that workflow, another platform for a different stakeholder. Every vendor is trying to own one problem.
But construction doesn’t need more single-use tools. It needs platforms that can talk to each other, exchange data, and reduce the coordination overhead between fragmented systems. That’s what a systems integrator does.
Hellermann sees this as an underserved opportunity. Founders focused on one workflow might find customers, but they’re competing on feature set and UI. Systems integrators compete on integration capability and data interoperability. One market is horizontal (everyone building slightly different versions of the same thing). The other is vertical-integrated depth (solving for the whole process).
This frames the opportunity differently for founders. Instead of asking “How do we own this one workflow?” the better question is “How do we become the integration layer that makes multiple workflows talk?” That’s a different product, a different sales motion, and a different value proposition.
For corporate buyers, this is equally relevant. You’re not just evaluating individual tools anymore. You’re evaluating whether a vendor can integrate with your existing tech stack and reduce the cost of moving data between systems. That ability matters more than any single feature.
The Elevator Test: How Corporate Buyers Should Evaluate Vendors
Working software in a 30-second workflow demo beats any pitch deck
Corporate buyers often get caught in a trap: Vendors send polished decks, reference architecture diagrams, customer lists, case studies. Somewhere in the middle of that material, the buyer is supposed to decide if the tool actually works for their workflow.
Hellermann’s rule is simpler. Ask the vendor to walk you through their software solving your specific workflow in the time it takes an elevator ride – roughly 30 seconds to 2 minutes. Can they do it? Or do they need to explain the architecture, the theoretical benefits, and the market opportunity first?
Vendors with actual working software can usually do this. They pull up the tool, show a workflow, demonstrate a specific output. Vendors with nice roadmaps and promising futures usually can’t – they end up explaining what the software will do rather than what it does.
This test is harsh but revealing. It filters out a lot of noise. And it forces vendors to care about actual usability and demonstration capability, not just marketing narrative.
- Request a live demo. Not a recorded walkthrough, a live demo. Live reveals hiccups, hidden complexity, and workarounds.
- Use your actual workflow. Don’t let the vendor choose an idealized use case. Show them your messy, real workflow and ask if their software works.
- Set a time limit. 2 minutes maximum to show value. If they need more, the value proposition isn’t clear.
- Ask about integration points. Where does your data go? How do other systems access it? Can it talk to your existing tools?
How to Think About Billion-Dollar Outcomes in ConTech
Credibility and bottleneck identification come before the billion-dollar narrative
Venture capital needs to believe in billion-dollar outcomes. For ConTech founders, this creates a constraint: How do you build something big enough to interest a VC, but small enough to actually get a first customer?
Hellermann’s answer is to flip the logic. Don’t start with the billion-dollar story. Start with the specific bottleneck, the customer willing to pay to remove it, and the credible path to get there. Then work backwards. If you can solve this bottleneck for one customer, can you solve it for a thousand? If yes, and the unit economics work, then you have a billion-dollar business.
This approach filters for founders who are thinking clearly about causation, not just dreaming about scale. It also makes it easier for VCs to believe in the outcome because they can see the path, not just the potential.
For corporate buyers, this is useful context too. A vendor claiming to be “the platform for the future of construction” is less credible than a vendor saying “We solve X constraint for Y type of project, and we have three customers proving it works.” The latter founder is thinking like someone who’s going to build a defensible business. The former is thinking like someone who’s hoping for a miracle.
Frequently Asked Questions
Hellermann looks for founders who can: (1) articulate the specific bottleneck they’re solving, not just the market opportunity; (2) show working software or a credible prototype, not just a pitch deck; (3) identify a real customer willing to pay, and explain how they’ll acquire it this year; (4) reverse-engineer the path to a billion-dollar outcome based on bottleneck removal and unit economics, not wishful thinking. The key is combining grand vision with ground-level credibility about execution and customer acquisition. (Source: Contech Connect fireside chat)
Because every ConTech founder now mentions AI, but most can’t explain what problem their AI approach solves better than alternatives. Saying “We use large language models for scheduling” is different from “We use LLMs to reduce scheduling rework time by 40% on projects like yours.” The AI is a mechanism, not a differentiator. What matters is whether the founder can show the mechanism improving a real constraint in a real workflow. Vendors who lead with AI in the abstract are usually trying to create excitement rather than solve problems. (Source: Contech Connect fireside chat)
For 99% of founders needing capital expenditure, venture capital is not the right asset class. VC expects software margins (70%+) and a path to billion-dollar outcomes with small capital raises. A 3D printing company or robotics manufacturer can’t achieve software margins, even if the opportunity is large. Better options for CapEx founders include corporate venture capital (which has more latitude for different unit economics), strategic customer investment (if the customer is willing to fund development), banks (if they’ll underwrite the risk), or a different capital structure altogether. VC is viable only if you can reverse-engineer a credible, specific path to a billion-dollar outcome. (Source: Contech Connect fireside chat)
Construction has many point solutions – tools for scheduling, design, procurement, site monitoring, etc. – but they don’t talk to each other. Systems integrators are platforms that solve for data interoperability and workflow integration across these fragmented tools. Instead of competing on feature depth in one workflow, integrators compete on the ability to make multiple workflows talk and reduce data re-entry overhead. This is less crowded than point-solution competition and more defensible because switching costs are higher once integration is in place. (Source: Contech Connect fireside chat)
The elevator test asks: Can the vendor demonstrate their software solving your specific workflow in 30 seconds to 2 minutes, the time it takes an elevator ride? If they can, they have working software and usable design. If they need to explain architecture, market opportunity, or roadmap features instead, the product probably isn’t ready for what you actually need. Corporate buyers should request live demos using their actual workflows, not vendor-selected idealized scenarios. This filters out vendors trying to sell potential and focuses attention on vendors with actual working solutions. (Source: Contech Connect fireside chat)
Instead of starting with a billion-dollar vision and working backwards, start with a specific bottleneck, a customer willing to pay to remove it, and the execution plan to get customer one this year. Then ask: If this works for one customer, can it work for a thousand? If the unit economics scale, then you have a credible billion-dollar story. This approach creates confidence in VCs because they can see the causation (bottleneck removal -> customer acquisition -> scale) rather than hoping for it. It also ensures the founder is thinking like a builder, not just a dreamer. (Source: Contech Connect fireside chat)
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Join 3,000+ ReadersTrusted Sources
Contech Connect Paris Fireside Chat. Patric Hellermann and Owen, February 2026. Covers founder evaluation criteria, AI in pitches, CapEx funding gaps, systems integration opportunities, and corporate buyer evaluation frameworks.
Foundamental Investment Philosophy. Investment approach focused on the “project economy” – capex-based markets with standardized demand. Background available in broader Contech funding analysis and market data.
ConTech Vendor Evaluation. Corporate buyer perspective on evaluating construction technology vendors. More context on adoption and buyer behavior in “You Can Only Go As Fast As Your Customers”: The Quiet Brake on ConTech AI.
CapEx and Hardware Funding. Discussion of why venture capital is mismatched with capital-intensive construction businesses. References to 3D printing, robotics, and manufacturing-based solutions that require different funding structures than pure software.
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