Crosscut Ventures — Investment Thesis & Preferences

Crosscut Ventures Research

Investment Thesis

Crosscut Ventures invests in early-stage frontier technology companies addressing humanity's most pressing problems. Founded in 2008 in Los Angeles—defying conventional wisdom about venture capital geography—the firm partners with visionary entrepreneurs building category-defining solutions in deep tech, hardware, and software. The investment philosophy centers on the belief that exceptional founders emerge from technical communities (particularly SpaceX, Anduril, Northrop, and Boeing in Southern California) and develop ambitious visions that transcend typical startup thinking. As Brian Garrett notes, "When they think about starting a company, they don't come with small ideas. They're thinking about big, hairy problems that humanity is facing."

Sector and Stage Focus

Crosscut's primary investment focus areas include:

Frontier Technologies:

Energy transition and power systems (including advanced nuclear)
Space economy and satellite technology
Climate and decarbonization solutions
Advanced manufacturing and materials science
Robotics and automation
Defense systems upgrade
Supply chain resilience and reshoring
Underwater exploration and marine technology

Business Models:

Hard tech and deep tech (hardware-centric)
Software companies serving frontier tech ecosystems
Blended portfolios combining hardware and software elements

Investment Stages:

Seed: $500K-$3M for companies with early product and founder credibility
Series A: $2M-$10M for companies with product-market fit
Occasional pre-seed investments for exceptional founders

Team and Leadership

Crosscut has established a deep bench of experienced operators and investors:

Core Partners:

Brian Garrett, Co-Founder & Managing Director: Former entrepreneur at StyleSaint, 20+ years in venture capital. Brings operational experience and founder empathy to investment decisions.
Jon Ylvisaker, Partner: Experienced investor focused on cost discipline and founder obsession. Recently joined from Yield Capital Partners. Strong background in identifying founders with relentless work ethic.
Rick Smith, Co-Founder & Senior Advisor: Legal background (Harvard Law), deep commitment to founder support and long-term partnership. Known for identifying grit and hustle in founders.
Felipe Alvarez, Sr. Manager of Strategic Finance: Economics background with UCLA MBA, expertise in financial strategy and investment structure.
Allie Dolido, Chief of Staff: Strategy and innovation background, brings operational excellence to firm management.

Extended Network: The firm maintains relationships with 7+ venture partners providing domain expertise across industries, including former CIA agents, experienced founders, and operators from SpaceX and other frontier tech companies.

Check Size and Capital Deployment

Typical Seed Investment: $500K-$3M
Series A Range: $2M-$10M
Fund Size: Most recent fund (Crosscut VI) is $100M, focused on frontier technologies
Total AUM: $300M+ across six funds
Annual Deployment: Actively deploying with 4+ investments in 2025 to date

Decision Process and Timeline

Crosscut operates as a partnership-driven firm with collaborative decision-making. Key characteristics:

Decision Model: Partnership consensus with strong operator input
Timeline: Typically 4-6 weeks from first meeting to term sheet for aligned founders
Due Diligence: Deep technical and operational diligence, founder background assessment
Board Seats: Standard practice; actively involved in portfolio company governance
Support Style: Hands-on partner involvement, operational expertise deployment, founder development focus

Lead Tendency

Crosscut leads early-stage rounds in areas of conviction and co-leads with strategic partners. The firm maintains:

Lead position in seed rounds where they have thesis alignment
Co-lead participation in series rounds with complementary investors
Strong follow-on investment discipline (reinvest in successful portfolio companies across multiple rounds)

Evidence from portfolio: Pearl and Gumgum are backed across multiple rounds; Aalo Atomics received follow-on capital; Umbra Space received participation in multiple financing rounds.

Recent Activity and Portfolio Performance

Fund Status: Actively deploying from Fund VI ($100M, closed October 2024)

Recent Notable Investments (2024-2025):

Aalo Atomics (August 2025): Advanced nuclear company, Series funding
Solestial (2025): Space-based solar technology
Umbra Space (2024): Space-based radar technology
Proteus Space (2024): Autonomous satellite bus design
SoloPulse (2024): Advanced sensor technology
Haxion (2024): AI-powered synthetic data
Cambium Carbon (2024): Regenerative supply chains

Portfolio Exits and Highlights:

Pacaso: IPO candidate (real estate secondary homes), $1B+ valuation
Narvar: Exited via acquisition (part of Zendesk family)
GumGum: Continued growth, multiple founder repeat investment
Pearl: AI dentistry, scale-up from founder Ophir Tanz (second Crosscut backing)
Branch: Series C+ trajectory, employee financial services
BuildOps: Real estate tech platform, strong growth

Portfolio Size: 160+ companies invested since 2008

Founder Development and Support

Crosscut commits at least 1% of all invested capital toward founder development programs, including:

Leadership coaching and executive development
Founder mental health and wellness support
Operational guidance and best practices
Network access to customer acquisition and growth resources
Government/commercial sector strategy for deep tech

Geographic Focus

Primary: Los Angeles and Southern California (local advantage thesis)
Secondary: San Francisco Bay Area, Austin, Seattle
International: Selective investments in London, Japan, South Korea
Rationale: LA has abundant space, 90+ SpaceX spinouts, highest engineering graduate density in US, and emerging deep tech ecosystem

The firm emphasizes that Los Angeles is uniquely positioned for frontier tech with 10x the geographic area of SF, world-class engineering talent, and intersection with North America, Asia, and Latin America trade routes.

Portfolio Company Network and Syndication

Crosscut maintains strong relationships with:

Co-investors: Bonfire Ventures, Act One Ventures, Addition, and other frontier tech-focused firms
Strategic Partners: SpaceX ecosystem participants, government contractors, industry leaders
Venture Partners: Network of operators available for company guidance

Investment Philosophy and Values

Founder-Centric: "We put founders first" is a core value. The firm invests in multiple rounds with founders who prove execution capability, often reinvesting across companies' lifecycles.

Long-Term Partnership: Crosscut's 2008 founding—one month before Lehman Brothers collapse—established that the firm survives economic cycles and maintains steady support through company growth phases.

Operational Excellence: Unlike traditional financial investors, Crosscut partners bring 20+ years of startup and operational experience, enabling hands-on support beyond capital.

World-Changing Ambition: Focus on "big, hairy problems" rather than incremental software features. Portfolio reflects commitment to solving climate, defense, space, and manufacturing challenges.

Market Positioning

Crosscut is positioned as:

LA's Most Established Seed Fund: Operating since 2008, proving regional venture ecosystem viability
Frontier Tech Specialist: Deep expertise in hardware, deep tech, and complex manufacturing challenges
Founder-First Partner: Known for following founders into new markets and supporting them through challenges
Full-Stack Platform Builder: Developing growth and project finance capabilities to support portfolio companies beyond traditional venture capital lifecycle