Leura Craig is the founder and managing partner at Outlander VC, a venture capital firm specializing in pre-seed and seed-stage investments. A former operator turned investor, Leura brings her entrepreneurial experience to venture capital, having previously bootstrapped and scaled two startups, including L&W, which raised $30M from top investors like CRV and Benchmark. Leura is passionate about discovering diverse founders from unconventional markets, and her current focus includes sectors like AI, hardware/robotics, and the future of work. Recognized as a Forbes 30 Under 30 and named one of Goldman Sachs’ “100 Most Intriguing Entrepreneurs,” Leura is reshaping how early-stage venture is done.
Here’s a glimpse of what you’ll learn:
- 00:00 Introduction to Laura Craig
- 00:17 From Designer to Venture Capitalist
- 00:52 The Value of Operator Experience in VC
- 03:24 Outlander’s Unique Founder Framework
- 05:36 Outlander’s Impressive Track Record
- 07:01 The Origin Story of Outlander Ventures
- 12:55 Ruthless Prioritization for Founders
- 14:43 Fund 3 and Investment Strategy
- 20:32 The Importance of Trust and Honesty
- 24:06 Conclusion and Future Outlook
In this episode…
How does operational experience transform a venture capitalist’s approach to investing? Leura Craig, founder of Outlander VC, shares her journey from a successful founder to managing a venture capital firm that focuses on early-stage startups. With a reputation for identifying and nurturing high-potential founders, Leura emphasizes the importance of understanding the founder’s mindset and building long-term trust. Leura explains how Outlander VC uses a proprietary 38-point framework to evaluate founders, going beyond traditional metrics to focus on human attributes like resilience, vision, and adaptability. In this conversation, she discusses how trust and open communication are central to Outlander’s philosophy and shares lessons from investing in 18 multibillion-dollar companies. The episode also delves into why the next few years represent a unique opportunity for first-check investors, particularly in sectors like AI, hardware, robotics, and the future of work. Leura stresses the importance of disciplined investing, prioritizing ownership, and focusing on building diverse portfolios that reflect the changing landscape of venture capital.
Resources mentioned in this episode:
- Brian Smiga on LinkedIn
- Leura Craig on LinkedIn
- Outlander VC
Quotable Moments:
- “Being an operator gives you an edge as a VC. You’ve been in the trenches, and you know what it takes to succeed.”
- “We prioritize high conviction, low velocity investments, meaning we’re highly selective but deeply committed to the founders we back.”
- “Founders need honest feedback—that’s how trust is built, and that’s how companies grow.”
- “AI will be in everything, and if companies aren’t leveraging it, they’re falling behind.”
Venture Tips from Leura Craig:
- Build long-term trust with founders by being transparent and providing honest feedback.
- Focus on identifying founders with the right human attributes—they are more important than the initial product.
- Practice disciplined investing to secure meaningful ownership stakes in your portfolio.
- Prioritize diversity when investing—unconventional backgrounds often yield the most innovative solutions.
Episode Host: Alpha Partners
This episode is brought to you by Alpha Partners, an NYC-based growth equity firm managing $300 million. Alpha co-invests in top-tier growth equity companies led by the world’s best investors. We focus on scaling and late-stage tech investment opportunities primarily in the essential technology sector, including e-commerce, enterprise software, fintech, edtech, and health IT. To learn how we can help you with your funding goals, visit www.alphapartners.com, or email us at vc@alphapartners.com.
Sponsor Host: Affinity
Affinity is a relationship intelligence platform that empowers dealmakers in relationship-driven industries to find, manage, and close more deals. With the most automated relationship intelligence insights and technology, Affinity enables leaders to drive deals and ensure their teams can take action with confidence, knowing the context and history of every relationship. The Affinity platform, including Affinity CRM, is used by over 3,000 relationship-driven organizations worldwide. Founded in 2014, Affinity is headquartered in San Francisco and backed by leading investors, including Menlo Ventures, Advance Venture Partners, 8VC, and MassMutual Ventures. Learn more at affinity.co/drivingalpha.
Episode Transcript
Brian Smiga
I’m your host, Brian Smiga, co-founding partner of Alpha Partners, here with Leura Craig, partner, founder at Outlander Ventures. Laura, welcome to the show.
Leura Craig
Thanks so much. So excited to be here.
Brian Smiga
We’re excited to have you. I’ve been getting to know you over the last couple of years, and I’m intrigued by your journey. Starting at McGill University, which is a place I would have loved to have gone to university, you had an early career as a designer. And I would suspect that was informative and that design has continued to be important to you. Is that true?
Leura Craig
Of course, design will always play a very important part of my life. I think that our analog and digital spaces impact how we think and how we feel and how we operate. At heart, I’ll always be a designer.
Brian Smiga
Absolutely. And then like me, you were an operator, a business creator, a founder before you became a VC. For me, for most of my career. I only started in VC about 12 years ago. Do you think operators make better investors?
Leura Craig
I would say generally speaking, yes. And I think one of the reasons I decided to go full -time into venture capital post my founder journey, which a lot of people ask me… “How did you make the decision to not start another company, not be a founder, and how did you make the decision to become a venture capitalist and be on that side of the table? It was fueled by my frustration of constantly meeting with and taking advice from people who had never even attempted to open a lemonade stand, let alone try and build a multi-billion dollar business in 10 years. So I think that the people that I respect the most in venture capital and who I’ve learned from, most of their background was they were founders themselves. They bootstrapped and then raised venture and scaled up their businesses and really were in the trenches themselves.
As a result of that, we former operators understand company building and the journey in a fundamentally different way. And I don’t know that that always yields better venture returns, but I think that it allows you to at least be a more active participant in working with your portfolio companies and hopefully gives you a more realistic and grounded view on what success really looks like.
Which I think matters a lot in the world of venture. There’s a lot of hype. There’s a lot of frothiness, whether it’s a particular sector, particular product. People in our industry, like other industries, love to follow each other. And I think that when you’ve been a founder operator, and you’re assessing these companies more honestly, more authentically, looking at it from the lens of having been an operator yourself, I think that you are generally less likely to get caught up in the hype and chaos of the excitement of something that’s going on at a particular moment. I know that there are exceptional investors who have never had that founder operating experience, but I do think overall it’s a massive value add.
Brian Smiga
So as a “first check VC” and a phenomenal one, your experience as a founder yourself and as an “outlander”, and we’re going to get to that, how does it help you assess the founding team or the founder themselves, herself, himself? What kind of insight or X -ray vision do you have, do you think, because of your background?
Leura Craig
Well, I think that it’s not just because of my background, but what we do at Outlander is very unique. Every early stage venture capitalist on the face of the planet says that they invest founders first. But my question to them is always, what does that mean? And we see a lot that it’s traditional pattern matching. “So where did you go to university? Where did you work? Who do you know?” Most of venture works via warm referral.
So most venture capitalists are missing a lot of the best and most interesting deals because the founders that are creating the biggest businesses who are willing to take the biggest risks don’t always come from, you know, that MIT, Goldman Sachs meta-background, right? They’ve had different experiences, whether they’re college dropouts or, you know, worked at lesser known places, have been hacking things on their own. So at Outlander, we actually have our own founder framework. It’s a 38 point founder framework.
We’re looking for 38 key human attributes in every single founder. So instead of saying, “Hey, this is a pre-product, pre-revenue business.” There’s nothing to judge on from a sector or product or even market viability perspective. It’s a hundred percent about the founding team. And we at Outlander have a very specific lens of what that means. Things like being a risk taker, having fortitude, someone who’s an infectious evangelist. So we, as a team, not just myself, but are really trained in learning who these people are. I think if you were to poll a hundred founders on what their experience was like to pitch Outlander, they might tell you it felt a bit more like therapy than pitching business.
Brian Smiga
Yeah, how do you gather these 38? Do you, Paige and your team score them? Is it on like a 4 .0 scale? How do you do the 38?
Leura Craig
I’m not going to tell you how it works because we’re not going to give the secret sauce away, but…
Brian Smiga
I it’s worked for you, right?
Leura Craig
18 multi-billion dollar companies later. We know that it works.
Brian Smiga
OK, can you give us some high level numbers without being a VC brag, like how well it’s working for you?
Leura Craig
Well, there’s not a lot of venture funds who have invested in 18 multi-billion dollar companies. We have top 1 % performance in our fund one, which is a 2015 fund, top Decile in fund two, which is a 2020 vintage fund, maturing well. Fund three is our newest fund. We just started deploying out of that fund this year.
Already two of our early investments have just closed new rounds of capital at significant markups.We consider ourselves to be venture capitalists who are realists, meaning that markups can be a leading indicator of later term success, but definitely not definitive. So, but when you’re in these early days, you have a pre-seed company that has nothing, we’re watching some of the momentum of these businesses and saying, hey, there’s something really special here. So, we have top decile performance, have invested in 18 multi-billion dollar companies, that is extremely unusual. I think the other stat that we look to that shows the overall impact of what we do and how it impacts our funds’ performance is the fact that according to Crunchbase and PitchBook average seed fund, that is a top quartile seed fund, about 2 % of their deals become multi -billion dollar companies. And at Outlander, we’re a little over 10%.
Brian Smiga
My God, that’s great. Fivefold increase. All right, let’s get back to the beginning. I think the audience must be really interested on how you and Paige got started, why the name Outlander? Why do you consider yourselves Outlanders? And maybe that’s one of your 38 criteria. Maybe you could tell that origin story.
Leura Craig
Sure. Well, I’ll start with a little bit about Paige and my personal backgrounds, because it lends itself to the name, which is that we both have had atypical journeys. I always joke that it started with me growing up as a Jew in South Alabama, which is already extremely unusual. And then I always joke as much as I love my Southern roots and have come to appreciate them as I’ve grown older, I literally fled the country in order to create something new and different for myself when I went to McGill. Having grown up Jewish in the South, living as a person from South Alabama and French speaking Canada, you know, starting my career in interior design, my first job was working with this design firm, and I literally decorated billionaires houses all over the world to then becoming a venture-backed founder to then becoming a venture capitalist. It’s a very unusual and windy path getting to where I am today. Paige similarly had a very complicated and maybe unusual background. He grew up, a lot of people don’t know this about him, but he publicly will talk about it, which is why I will share this, which is that he grew up extremely, extremely poor. He lived in a car until he was five. He grew up in an abandoned house without running water or electricity until he was 13. Drug addict mother, to absentee father, but school was his refuge. He did really well in school, and he did really well in sports. Basically, when he was a teenager, he started taking college courses at a local community college, started to volunteer with various political people who changed his trajectory forever when they sponsored him to go to West Point. And when he went to West Point, that’s not so unusual, but dropping out your junior year at West Point to enlist infantry Marine Corps, a little less common. He wanted to be in the action.
Brian Smiga
Wow, he dropped out of West Point to get into the action. That’s a greatThat’s great statement of character.
Leura Craig
Totally. so, you know, I think then serving in the military, serving within the US intelligence community, then building up a successful private defense technology business, and then deciding to become an angel investor, right? That is a really long and windy path towards ending up in venture capital. He did finish his college degree and then he did a remote MBA while he was deployed as a Marine, which is also very admirable. But, you know, it’s not that typical. Stanford MBA to then working at Meta to then getting a job as an associate at Sequoia would be your more typical path. So both of us think of ourselves as people who are outsiders, people who have unusual paths, unusual experiences, and who are very comfortable in that space. There’s no place and no area where we can be where we don’t feel comfortable, right? So outlanders are people who are comfortable on the outside, comfortable exploring foreign lands and foreign concepts. And when we look back at the portfolio of founders that we’ve funded and the people who’ve been the most successful, they are very similar to that. Not necessarily that they had as complex experiences to getting to where they are professionally, but more so that they have that in their DNA that they’re very comfortable in the unknown, comfortable pushing the boundaries, comfortable exploring things that have never been explored before. So for us, even though venture is not typically an industry where brand matters, we felt like having a name that really embodied who we are as people, as well as our founders was something that was important.
Brian Smiga
Agreed. I think it’s authentic. To tease out some of the advantages I think you capture are, you know, people who are alien, who are immigrantsimmigrant, who are poor and making it into the founder’s world. They just have that extra grit and cannot afford to failafford fail the first time. And I think that’s really important. And then the flip side, I think, is that founders feel really comfortable with you and Paige. You know, you’re cut from the same cloth. And I think, you know, for first check funds, you want to get the deal, but you need to win the deal. And I really think that’s got to be part of your success is that founders can identify and feel comfortable with you and Paige. That’s really excellent. I want to move on to an outlier thing here, which is you were one of Goldman Sachs’Sach’s most – what was it? – Controversial entrepreneurs
Leura Craig
No, maybe they publish a separate list that I’m unaware of.
Brian Smiga
One of the hundred most intriguing entrepreneurs! Just playing with you a bit. But tell me what that was all about?
Leura Craig
You know, when you’re a founder, depending on what kind of founder you are and what your business is, but I was running a consumer marketplace company. So an important part of us building momentum in terms of how we got a lot of our early growth was through social media and working with influencers. And then we were able to structure these really large corporate partnerships. And, a lot of that was tied to me as the CEO being out there and building our brand. You know, the Forbes 30 under 30 and I was in this Goldman Sachs class of the most intriguing entrepreneurs where I got to meet founders of almost every brand name company you can imagine. It was a really exceptional experience. But a lot of that, I tell founders today, having had the opportunity to have those experiences,definitely does not ultimately impact the course of your business. Those are nice to haves not need to have, as much as I respect those organizations and I’m so proud to have been a part of, some of the things that I’ve been able to be a part of- that is not what ultimately creates success. And I think founders must find what works for them. And what we talk a lot about at Outlander, especially in terms of our support philosophy is what we call “ruthless prioritization.”
I definitely did this as a founder. Every founder on the face of the planet does it, which is that you’re thinking long -term, you’re thinking short -term, you’ve got a billion things you want to do, a billion things you’re trying to get out the door. And you don’t realize because you’re so deep in the weeds that sometimes you think you’re making progress, but at the end of the day, you may be running in circles or even worse, you may actually be running backwards. And so, you know, when you look at that really, really long list of things to do and you start getting obsessive over certain things like I have to work on this. I have to fix this. What we really focus on with our founders is helping them take that step back and being like, North Star metric is X, right? Let’s say we had five paying customers. We want it in the next quarter, get to 10 paying customers. How is this very mission critical thing that you want to spend a lot of time and potentially money on?
How is it going to help you achieve getting from five to 10. And almost 100 % of the time, the answer is that, somethings are not that important. We can probably figure out how to optimize what we’re doing in these other ways and really focus our time and energy. So, it’s always like, what can you deprioritize? What can you delegate? As the founder, you have to be ruthlessly prioritized on moving the North Star metric in that business because founders always overestimate how much time and money they have. In reality, you have very little time and very little money to accomplish really a lot.
Brian Smiga
Yeah, once again, scarcity constraint is kind of one’s friend for ruthless prioritization. Let’s prioritize the present now. You are at the tail end of raising your fund three. I think it’s a $150 million fund. What are you going to invest in at fund three and why is 2024 to 2026 an attractive time to be a “first check fund” in these sectors, which mostly are around deep tech, like future of work, future of commerce, future of health. Tell us about your fund three and why now?
Leura Craig
Sure. Fund 3 is a really exciting fund for us. We have brought on board some really tier one institutional LPs that we’re really excited to build long -term relationships with. I think that they’ve backed us because of the fund’s prior performance in the last two funds, as well as seeing this really interesting opportunity to become that tier one pre -seed fund. I hear a lot of funds talk about investing at pre -seed, investing at seed, but
those stages mean very different things to different funds. And there’s not many funds that will go in pre-product, pre-revenue and lead the round, right? On average, we’re writing about a million and a half dollar check. We’re taking probably 80% of that round in exchange for 15 to 20 % ownership. We’re happy to collaborate with other VCs, with other smaller managers, with angels, strategic investors, et cetera. But what we see is really common is that founders at this stage are able to wrangle some small amount of capital from various groups, but they need someone with a real track record and real reputation to come in and anchor it, right? Just like you need anchors for funds, to really set the signal that smart people have decided to back you. We do a lot of what I call, with founders, helping them to herd the cats, which is, okay, you’ve got a couple hundred thousand kind of committed here and there, but we’re going to come in, we’re going to take, you know, $1.5 of your $2 million round. We set the terms, set the structure and help get this thing closed out so you can actually start to use that capital and build. So that’s what we really focus on. 2024 to 2026, obviously an extremely interesting time for investment because the market overall is still in what we would consider more bearish territory and especially for those earlier stage companies.
Series A’s are starting to come back a little bit. Growth is still pretty stalled out, and people are still pretty conservative. At the height of the chaos, I would say, where we saw the most variation was in places like Silicon Valley and New York. All of a sudden, the average pre -seed round was being done at a $25 million post -money, which is outrageous. And so many of those companies are struggling now to raise follow on capital because they put in so much money too early on. They raised it way too high of a price, too early on. And that becomes a much bigger hurdle to get over in a market like today’s market. Prices are significantly cheaper. We’re seeing average pre-seed price just across the country is five to ten, depending on the level of the founders and how far along they are. So you’re getting obviously great ownership from day one, which is really critical to creating those phenomenal returns. We’re definitely a fund that, you know, ownership matters. Other funds have different philosophies, but the ownership matters. So that’s what we’re focused on. Sectors for us are not something that we focus on. I know it sounds ridiculous, but we are generalists as long as it’s software or software enabled hardware.
What’s special about what we do is that our ability to see the potential in a team and their connectivity and skillset in regard to a particular problem category. That’s how we think about it. We think too many VCs, and especially in the early stages, not just Pre-Seed, but even Seed, focus too much on the product that exists today, but the product is going to change.
You know, our perfect example of how you miss these things if your sector focused, and especially when you invest very early stages, Scale AI. Outlander was the very first investor in scale AI at a $3 million valuation before they even went to Y Combinator. And they were pre everything and it wasn’t scale AI. What they were pitching at the time was I think what most funds would have considered a consumer health tech company.
It was an AI layer kind of on top of a Zocdoc where it was going to help consumers find doctors in a more efficient manner. But when you met Alex and Lucy, what they really were passionate about, what they were talking about is, and keep in mind this is early 2016, is you have two deeply technical, talented founders who are obsessed with AI and how it was going to transform everything.
What to a lot of VCs would have seemed maybe a bit scattered because there was an idea around AI for dating, and then there was AI for medical, and there was AI for a couple of other things. Really what Outlander and Paige Craig saw in them is that, “Hey, here’s two brilliant founders. have all these attributes that I’m looking for. They are particularly suited from a technical ability perspective to build something in AI. We just d know what.” So, I think if you’re a sector focused investor, and you only invest in B2B SaaS, you would have missed Scale AI because they were a consumer health tech company. That was what was pitched. That was the deck. And we have countless examples of multi-billion dollar companies in our portfolio where maybe on the outside it seems like an extreme pivot, but it wasn’t an extreme pivot. It was an adjustment of the product to solve what was really the problem that they wanted to participate in solving.
Brian Smiga
And do you think it helps you and Paige and your team see and trust and understand the founders pivot because you’re so close to begin with and you’ve really built this layer of trust?
Leura Craig
Yeah, trust is everything when it comes to working with founders overall. But, you know, I think that one of the most important things that we can do as VCs, something that I’ve seen now, over and over again, a lot of venture capitalists are not willing to do… is to be honest with founders. And the most important honest conversation you can have with founders is like, this is not working. We’ve built a product, we’ve tried to put it out in the market. The world does not want it or does not want to pay for it.
So it’s time to make an adjustment. I tell our founders all the time, I’ve been a founder. I know what it’s like to sit in your shoes. I’m not going to sit here and tell you what direction to go in. I can brainstorm ideas, have thoughts and opinions as a relatively intelligent human being, but I’m one person. This is not my company, this is not my industry, and it’s not my vision. I’m here to support you and you guys figuring out what you need to adjust and what you need to pivot into. But what is critical is that you have to know that you need to adjust or pivot because what you are doing is not working. And I think that’s the conversation that so many VCs just don’t want to have. I sit on these boards, and I have VCs who want to show up. They want to hear good news. They want to hear all’s going according to plan and they’re not maybe always as dialed into the business as they should be. And I think that then when things don’t go well, which inevitably they don’t in every single company,how do you add value? How do you also have that trust with the founders when you’re surprised or disappointed or whatever that things are not going well, right?
Brian Smiga
I think this is the best of family relationships, siblings, best friends, is being able to face the tough news and say unpleasant things. Because in the big picture, you love the person, you love the founder, you love what they’re after. And the truth is your friend. And sometimes tough love is important. But I found this with my own partner, Steve, that this has just brought us closer when we’re brutally frank with each other. And that’s been over 25 years. Okay.
Leura Craig
Right. That radical transparency, right?
Brian Smiga
Winding up here. Outlander Fund 3, a fresh $150 million preeminent pre-seed fund. Congrats on the close! All right, sorry to tease everyone. Okay, wait for Fund 4. Same with Alpha, wait for Fund 4. When I think of your way of evaluating founders, I think of great firms that are well known, like SignalRank.co, that use data analytics to assess founding teams as well as markets, or an emerging firm like 212angels.com. And I think you guys are squarely in the middle as a proven, preeminent first check fund. And I think it’s going continue to serve you well in this market. The other thing we heard is that if you’re interested in first check, pre -seed investing, you’re getting in at a huge discount from where we were in 2020 to 22. And so that makes a very attractive case. God, I wish I was in your fund. So, we still have to wait for your Fund 4.
Leura Craig
For sure. Even when the markets are insane, there’s always good deals to be done. once again, if you know what you’re looking for, if you know what’s special in a deal, and you’re not going to get caught up in the nonsense of it, there’s always the right way to get into a deal and to maintain that ownership and get the economics that the fund should get. And so even at the height of the 2021 insanity, we were still hitting our ownership target because we believe that discipline really matters when you’re doing this for the long game.
Brian Smiga
Final question, when you look ahead, and I know you have no crystal ball, and you think about the portfolio construction of your fund three, when you’re going out to raise your fund four, which we’re all going to await with eager anticipation, what does it look like? I mean, are there a lot of bets in AI? Do they all have a piece of AI in them? How much is future of work? How much of future of work? And maybe you can’t say. I’m just curious how large a portfolio you’re trying to build in this time.
Leura Craig
Yeah, I mean, we’ll have 45 portfolio companies in this fund. Based on our previous track record, we anticipate four to five of those over the next 10 years will become multi-billion dollar companies. It is way too early to tell, right? We have eight portfolio companies so far and some really good early signals from those companies, but it’s definitely too soon to tell. In terms of the sector, I don’t know. You know, I think we have certain hypotheses around what sectors are going to have a lot more movement and a lot more momentum in the next few years, which will lead to some of those companies getting bigger faster. But, you know, to your question about AI, this is the conversation we were having about mobile a decade ago. You know, it was everything was “mobile first”, it’s just, it’s going to be in everything.
Brian Smiga
“Intelligent first” for both for public as well as mature growth and early stage companies. Absolutely.
Leura Craig
AI is going to be in every single company and if they’re not using AI, then there’s something wrong with that company.
Brian Smiga
Yeah. Well, let’s leave it there. That’s a great note to finish on. Intelligent first. I really enjoyed this intelligent conversation with you, Leura, and getting to know you better. So, we look forward to working with Alpha. Alpha, of course, is a growth fund that works with early stage and first-check funds like Outlander to be their growth capital reserve when they have great companies that are getting to series B, C and D. Laura, we’re both in New York. I can’t wait to see your home. I know you host a lot of events there. I bet it’s beautiful.
Leura Craig
We do host a lot of events, that’s for sure. We’re looking forward to having you over again soon.
Brian Smiga
Likewise, we’ll look forward to seeing you at oneyou one of our events. Bye for now.
Leura Craig
Thank you. Bye bye.