Paige and Leura Craig aren’t looking for product-market fit, a Stanford degree, or a Zuck-esque hoodie. They are looking for entrepreneurs with supernatural forward drive.
“Basically, we’re looking for these monsters who can make decisions in chaos, constantly bring things to the table, constantly make decisions and just keep going,” said Paige, founder and managing partner of Outlander VC Assets.
Yes, that’s a particularly colorful way of saying, more or less, what all early-stage VCs are looking for: entrepreneurs who can persevere, adapt, and ultimately succeed.
The Craigs — who are married and run Outlander VC and back companies like SpaceX, Scale, Flock and Gusto — have tried to codify something investors have long wanted to understand: How do you recognize early on that someone has the potential to be a generational entrepreneur? The Craigs have used their experience and Paige’s military background—he served in the U.S. Marines and built and sold the private intelligence firm Lincoln Group—to create a 38-point framework against which they judge each founder. (Outlander currently has 18 unicorns and a “baby on the way,” as Leura jokes, while drone software maker Havoc is raising $750 million.)
“It’s not just about adding or removing attributes,” Leura said. “It’s also about the way the attributes are assessed and the way the process works… Above all, the framework serves to ensure that the investment team has a common vocabulary about what excellence really means.”
The 38-point framework consists of four areas – Vision, Intelligence, Character and Execution – with a strong emphasis on character and execution. The number of items or characteristics on the list has increased or decreased over time (at one time it was up to 43; in 2014 it was 14 for the first time). Her core belief: Who someone is can ultimately determine who survives.
“We do a short call, a long call and a deep dive,” Paige said. “You may spend 15 to 20 hours going through a founder’s entire life, asking about life, church, temple, death, parents and babies. For some people these calls are therapeutic, for others they may be painful.”
Comprised of a team of six, Outlander teaches each 21 intelligence-gathering-inspired elicitation tactics—conversation methods like reverse chronology and intentional relationship building—to go beyond canned answers and find out how potential founders actually behave under stress.
The Craigs are a bit reticent about naming specifics, but I managed to pick a few out of them: The qualities they look for include obsession, fortitude, irrational optimism, and a clear sense of what motivates them, be it their mission or their money.
“For me, the character is probably the most deterministic,” Paige said. “Character is essentially summed up for us as people with incredible fortitude, who can endure anything, survive, and see others through. People with weak character give up too soon… And that’s probably the number one killer in the early days.”
The “irrational optimism” they seek is prismatic in what it reveals about entrepreneurship in the 2020s: It’s a tightrope walk. On the one hand, you have to be irrationally optimistic to believe that you could actually build a multibillion-dollar company in a decade or less. On the other hand, you also have to recognize failures and know when to change the plan. Outlander tracks where founders fail, and it’s easy to be too delusional or too risk-averse.
“Deciding to be a founder is like deciding to wake up every day and get punched in the face,” Leura said. “And just when something is going well, something else is going badly.”
See you in the morning,
Allie Garfinkle
X: @agarfinks
E-mail: alexandra.garfinkle@fortune.com
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RISK CAPITAL
– Oratomica Pasadena, California-based developer of fault-tolerant quantum computing architectures for utility-scale systems, has raised $300 million in Series A funding. BOW Venture partner, spark Capital cityAnd Khosla ventures led the group and were accompanied by them Bezos Expeditions, index ventures, Generally catalystand other.
– standard Aia New York City-based platform for embedding law into AI agents, has raised $120 million in Series C funding. Khosla ventures led the lap and followed suit Blackstone, Bain Capital Ventures, Crafts venturesand other.
– Tangosa Tel Aviv, Israel-based developer of risk and financial crime investigative intelligence, has raised $20 million in seed funding. Red Point Capital city partner led the lap and followed suit management Fund, Clarim, Dare Israeland other.
– Luffy AIan Abingdon, UK-based developer of neuroplastic AI for real-time adaptive control of physical machines, has raised £8.1 million in Series A funding. BGF led the lap and followed suit MIG Capital city and existing investors.
– Adaptive Insurancea Hartford, Connecticut-based provider of climate resilience insurance products has raised $5 million in funding IAG Fire emblem ventures, Sunnah ventures, Space & Columnand other.
PRIVATE EQUITY
– Arlington Capital city partner acquired AMP Uniteda Dover, NH-based provider of marine preservation, structural and scaffolding services. Financial details were not disclosed.
– Kanawha Scale And systemssupported by Investcorpacquired Strack scale servicean industrial scale calibration and maintenance service provider based in Cincinnati, Ohio. Financial details were not disclosed.
– Long ridge Equity capital partner acquired a majority stake GoChartinga professional order flow charting and trading platform based in Middletown, Del. and Tamil Nadu, India. Financial details were not disclosed.
– Unit partner acquired a majority stake in the consulting services business of Meaden & Moorea professional services firm based in Cleveland, Ohio. Financial details were not disclosed.
EXITS
– EQT agreed to acquire the biosurgery business of Corza Medicala Boulder, Colorado-based biosurgery unit focused on GTCR surgical sealants. Financial details were not disclosed.
– Halma acquired Dream path diagnosisa Strasbourg, France-based provider of automated workflow solutions for anatomical pathology laboratories, by summit partner. Financial details were not disclosed.
IPOs
– Standard nuclear powerA nuclear fuel company based in Oak Ridge, Tennessee, plans to raise up to $384.3 million through an offering of 18.3 million shares priced between $18 and $21. The company had revenue of $3 million in the fiscal year that ended March 31. Decisive Point, Bigger Cross partner, standard Nuclear Trust, Welara Capital city partner, FundomoAnd Washington Harbor Triso support the company.
– Syntiantan Irvine, California-based semiconductor and software company has filed to go public on the Nasdaq. The company had revenue of $270 million in the fiscal year that ended March 31. Knowles electronics, Intel CompanyAnd Microsoft support the company.
FUND + FUND OF FUNDS
– Arctosa private equity firm based in Dallas, Texas, New York City and London, UK, raised $6.2 billion for its first Keystone Partners Fund, focused on providing finance to asset managers.
– Bregal milestonea London, U.K.-based private equity firm, has raised 915 million euros ($1 billion) for its third fund focused on European software, AI and cybersecurity companies.
– b Capital citya San Francisco-based venture capital firm, has raised $500 million for its third Ascent Fund, focused on companies developing next-generation technologies in healthcare, enterprise, energy and other sectors.
PEOPLE
– Bridge growth partnera New York City-based private equity firm, has been promoted Thrive Vignone as a high school principal.