The Best Investors Aren’t Pattern Matchers. They’re Exception Spotters.
How I’m evolving my lens—and why Stresswood will be built on exception recognition
Early in my venture investing career, I used to think in simple archetypes.
I’d tell people there were three types of founders I loved to back:
The humble outsider—someone from another industry who could earn trust and buy-in from stakeholders in a new domain.
The innovative insider—someone deep in an industry who could see how an outside analogy or technology could be applied to create new value.
The bridge—the rare founder who combined technical talent with generational domain expertise.
That framework served me well through my first decade in venture. Many of my best investments came from spotting these types before they looked obvious. But recently, a conversation reframed how I think about this work—and how I want to sharpen my eye for the next 20 years.
An allocator friend told me about a fund manager who’s been on the Midas List multiple times. When asked about his pattern recognition, the manager stopped him and said: “It’s not pattern recognition. It’s exception recognition.”
That landed hard for me.
In today’s venture market—where AI accelerates both innovation and noise—you don’t win by chasing patterns. You win by spotting the outliers: the founders, ideas, and dynamics that don’t yet fit a known template, but will reshape one.
Looking back, my best investments were exactly that:
Founders who could overlay software onto the messy realities of the physical world or the complexities of the changing labor market—whether in supply chains, healthcare services, commercial insurance, or remote work.
Founders who weren’t trying to be the next someone else. They were trying to be the first them.
Founders who combined grit and curiosity with a deep human understanding of the systems they wanted to change—able to forge new partnerships or flip business model paradigms on their head.
As I build Stresswood and our GP-only team, this will be part of our culture. We’ll each have different domains of expertise and personalized founder ICPs (ideal customer profiles). But the core skill we’ll all cultivate is exception recognition—personalized, evolving, and grounded in deep listening, hidden insight finding, and the learning velocity we expect in founders.
Because in this business, you don’t want to be average.
Patterns are just the averages of the past.
The future belongs to those who can see the exceptions—first.
—eiv