This Q&A is taken from the full podcast episode we recorded with Omar.

Q: Can you tell us about Euclid Ventures and your investment focus?

A: Euclid Ventures is a first-check fund focused on investing in vertical software and software-enabled platforms in large, underserved industries. We lead $1-3 million rounds and generally invest at the first institutional capital stage. Construction is our largest investment area, making up about 35% of our deals and 40% of our dollars invested.

Q: How important is it for founders to have domain experience in the industry they’re targeting?

A: We believe that having founders or founding teams with domain knowledge and industry connections is crucial for early success in vertical SaaS. It allows them to truly understand the market problem, build credibility with potential customers, and acquire early adopters. In fact, our analysis showed that 84% of successful vertical SaaS exits had at least one industry founder on the team.

Q: What are some of the challenges and opportunities in the construction industry for vertical SaaS companies?

A: Construction is a highly fragmented market with numerous sub-markets, each with its own set of challenges and opportunities. The industry has a low technology adoption rate (around 1% of spend), indicating significant room for growth and disruption. However, selling to the construction industry can be challenging due to long sales cycles, multiple stakeholders, and limited software budgets.

Q: What is your advice for vertical SaaS startups when it comes to go-to-market strategies in construction?

A: Go-to-market strategies in construction can vary depending on the target customer and the specific sub-market. Some successful approaches include targeting the top 100-500 companies with enterprise sales, focusing on specific subcontractor niches, or adopting a bottoms-up approach with inbound marketing and self-serve onboarding. Building strong relationships and establishing local presence are often key to success.

Q: How do you evaluate potential investments, and what do you look for in founding teams?

A: We look for exceptional teams with unique insights into the market and a clear path to building a category-defining company. We care about the combination of a strong team and a compelling market insight. We also evaluate the urgency and velocity of the problem they’re solving, as nice-to-have solutions often struggle to gain traction in construction.

Q: What role do you think AI and machine learning will play in transforming underserved industries like construction?

A: AI and machine learning have the potential to transform underserved industries, but the specific applications and paradigms are yet to be discovered. We believe that the key is to focus on applying these technologies to solve specific, urgent problems within the industry rather than trying to “AI-ify” an entire market. As the technology matures, we expect to see more compelling use cases emerge.

Q: What sets Euclid Ventures apart from other VCs, and why should founders partner with you?

A: At Euclid Ventures, we bring decades of experience in supporting founders and helping them scale their vertical SaaS businesses. We have a strong track record of backing successful companies and helping them reach product-market fit and achieve long-term success. Additionally, we offer access to a network of over 70 vertical software founders who can provide guidance and support to our portfolio companies.