Underscore VC Research
Overview
Underscore VC is a Boston-based early-stage venture capital firm co-founded in 2015 by Michael Skok and Richard Dulude. The firm backs bold B2B software entrepreneurs at the Pre-Seed and Seed stages, deploying from its third fund — a $58M vehicle closed in April 2024, with approximately $230M in total AUM across three funds. Underscore is headquartered at 131 Oliver Street, 3rd Floor, Boston, MA.
Investment Thesis
Underscore's thesis centers on partnering with mission-driven founders building transformational B2B software products in high-friction industries. Unlike most venture firms, Underscore employs a distinctive "open-source" investing model: they allocate profit shares from fund economics to a curated ecosystem of 18+ experienced operators called the "Core Community," who provide advisory support to portfolio companies at no cost to founders. This model creates a differentiated collaborative partnership between investors, operators, and startups.
The firm focuses on companies where software fundamentally reshapes established industry processes — from insurance communications to healthcare data, from cloud cost intelligence to AI workflow automation. They deliberately avoid biotech, medtech, and pure hardware.
Sector Focus
Underscore invests primarily across five sectors:
Enterprise Software & Vertical SaaS: Workflow automation, commerce experience management (Salsify), employee engagement (HelloTeam), supply chain visibility (project44), and vertical AI applications that replace legacy processes.
Developer Tools & Infrastructure: Cloud cost intelligence (CloudZero), R&D data cloud for life sciences (TetraScience), and AI-powered operational infrastructure.
Security & Cybersecurity: Offensive security with agentic AI (Terra Security), zero trust infrastructure access (BastionZero, acquired by Cloudflare), and AI-driven data protection (Orion Security).
Fintech & Payments: Payment infrastructure analytics (Pagos), embedded lending (Lendflow), commercial insurance infrastructure (Herald), digital finance data (Kaiko), and employee equity management (Vested).
Healthcare & Life Sciences: Insurance communications (Hi Marley), healthcare staffing (Apploi), clinical trial recruitment (Quilt Health, Trove Health), healthcare data analytics (H1), in-home care coordination (Darby), and healthcare workflow automation (Luminai).
AI is a cross-cutting theme across all sectors: Hypernatural (AI video), Slang (AI phone agents), Clockwork (AI FP&A), Ikigai Labs (AI operations), and Luminai (AI customer support workflows).
Stage Focus
Underscore exclusively focuses on the earliest institutional stages:
- Pre-Seed: First institutional check for founders with concept and early team
- Seed: Backing founders with early product-market fit signals
They aim to be the first institutional investor in a company and typically lead or co-lead rounds at these stages. They maintain follow-on reserves for breakout companies, as evidenced by follow-on investments in CloudZero's Series D, Luminai's Series B, and Slang's Series B.
Check Size
Based on fund sizes and portfolio composition (50+ companies across $230M in three funds), typical check sizes are:
- Pre-Seed: $500K–$1.5M
- Seed: $1M–$3M
Geographic Focus
Primarily Boston, MA and broader New England, with approximately half of investments outside Boston across the US and internationally. Fund II ($140M, 2019) was specifically dedicated to Boston-based or Boston-relocating startups, while Fund III (2024) takes a more geography-agnostic approach.
Fund Status & Recent Activity
Underscore closed Fund III at $58M in April 2024, marking a generational leadership transition with Michael Skok moving to Partner Emeritus. The fund is actively deploying.
Notable recent activity:
- April 2026: Luminai Series B $38M (partnership with Cleveland Clinic for healthcare operations)
- Early 2026: Slang Series B (AI virtual phone agents — follow-on)
- September 2025: Terra Security Series A $30M, led by Felicis (Underscore participated)
- July 2025: Hypernatural $9.2M seed for AI video creation platform
- May 2025: CloudZero $56M round for cloud cost management (follow-on)
Portfolio Highlights
Notable Exits (16 acquisitions):
- BastionZero → acquired by Cloudflare (zero trust infrastructure)
- Goldcast → acquired by Cvent (AI event marketing)
- Coda → acquired by Grammarly (December 2024)
- Wonderment → acquired by Loop (December 2024)
- Cazena → acquired by Cloudera (data as a service)
- AnyQuestion → acquired by WHOOP (fitness tech)
- IOpipe → acquired by New Relic (serverless monitoring)
- Mautic → acquired by Acquia (open source marketing automation)
- Zaius → acquired by Optimizely (customer data platform)
Active Breakout Companies:
- CloudZero — leading cloud cost intelligence platform, $56M+ raised
- Salsify — commerce experience management, major enterprise customer base
- project44 — supply chain visibility platform, unicorn-scale
- Hi Marley — insurance communications market leader
- TetraScience — R&D data cloud for pharma and biotech
- Luminai — healthcare workflow automation, Cleveland Clinic partner
Team
Richard Dulude (Co-Founder & Partner): Former Goldman Sachs quant, built P&G's D2C eCommerce division, founded a machine learning startup, early career at Founder Collective. Harvard MBA, Cornell Engineering (MS and BS). Focuses on crypto, extended reality, AI/ML, robotics, agentic AI, and security. Former US Ski Team member.
Lily Lyman (Partner): Former Facebook growth leader (100M+ new users in 4 years), co-founded an Agtech startup at Stanford. Harvard BA, Stanford MBA. Focuses on workflow automation, vertical AI, insurance, healthcare, and life sciences. Boston Globe 2024 Tech Power Player, Board Director at New England Venture Capital Association.
Chris Gardner (Partner): Nearly 30 years in technology with five consecutive exits. Co-founder of Paydiant (acquired by PayPal 2015), CMO at ExtendMedia (acquired by Cisco), SVP at m-Qube (acquired by Verisign), VP at edocs (acquired by Siebel). Focuses on fintech and payments.
Brian Devaney (Partner): Former First Round Capital (supported Looker, Flexport, Superhuman, Upstart, Verkada), former go-to-market lead at Strava Metro. University of Vermont. Focuses on vertical AI and B2B software.
James Orsillo (Partner, CFO/COO): Former CFO at Maxwell Health and Evariant, involved in $2.5B+ in equity and debt transactions. CFA charterholder, Brandeis MSF, Boston College BS. Provides operational and financial support to portfolio companies.
Michael Skok (Partner Emeritus, Co-Founder): Co-founded Underscore in 2015. Prior venture career at North Bridge Venture Partners; founded AlphaBlox (acquired by IBM), worked with Symantec UK. Board history includes Acquia, Demandware (Salesforce), Salsify, CloudZero, and TetraScience.
Core Community Model
Underscore's defining differentiator is its Core Community — 18+ experienced operators who receive profit-share allocations from fund economics in exchange for providing advisory support to portfolio companies. This includes:
- Dries Buytaert (Drupal creator, Acquia co-founder)
- Corey Thomas (Rapid7 CEO, Federal Reserve Bank of Boston board chair)
- Steve Fredette (Toast co-founder/President)
- Chad Laurans (SimpliSafe founder/chairman)
- Rana el Kaliouby (Emotion AI pioneer, former Smart Eye CEO)
- Dianne Na Penn (Anthropic product leader, former Amazon exec)
- Natalie Gibralter (Microsoft VP of Product AI Innovation)
- Sam King (Nasuni CEO)
- Mike Massaro (Flywire CEO)
Decision Process & Founder Access
Partnership model with 5 investing partners. Direct contact available at [email protected] or (617) 279-8272. Cold outreach is accepted. Underscore is known for founder-friendly terms and deep operational support through Core Community resources.
Anti-Thesis
Underscore explicitly avoids biotech, medtech, pure hardware, and consumer applications. They require strong founder-market fit with technical or product depth. They do not invest in early-idea-stage companies without a clear path to transforming an industry.