Heuristics for Backing Repeat Founders in ConTech

July 28, 2025

Why repeat founders aren't always better bets: Success can kill the unreasonable edge that drives breakthrough outcomes. Experience ≠ better investment.

Shub Bhattacharya

Patric Hellermann

Heuristics for Backing Repeat Founders in ConTech

We had a thesis three years ago: There will come a point where high-quality founders with previous experience will start building in construction tech. We're seeing this everywhere now - from Silicon Valley to Europe. But there's something that doesn't get enough discussion in our opinion: being a repeat founder doesn't automatically make you a better investment.

This Week On Practical Nerds - tl;dr

When success makes founders more conformist, not unreasonable

When previous fundraising can create shortcuts in due diligence

Why true unreasonability gets diluted with experience

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When success makes founders more conformist, not unreasonable

Does winning your first round kill your edge?

We're witnessing something in construction tech: Repeat founders are slowly flooding the space. These aren't just any founders, we're talking about people who've built companies that went public, reached $50 million ARR, or raised hundreds of millions.

When we dig deeper into these repeat founders, many seem to have lost that unreasonable edge that made them successful in the first place.

Let's break this down into two layers - personality and experience. Your personality gets shaped primarily during your formative years. Childhood, teenage years, early twenties. Major traumatic events can alter it too - losing a loved one, going bankrupt, parents getting laid off. But starting a company and even failing? That's rarely personality-altering in the way people think.

The experience layer is different. Going through multiple company-building cycles gives you valuable experience. You learn the VC dance. You avoid silly mistakes. You know how to structure rounds and manage boards. This experience has value, but it's not as valuable as most people assume.

Here's why: if you're truly a high-quality founder - one in 10,000 - you'll figure out those stumbling blocks anyway. Even as a first-timer, you'll have the network and intelligence to avoid basic mistakes. So the value of repeat founder experience is actually quite limited.

But there's a darker side to this experience accumulation. Society has this effect on all of us - it makes us conform. The more experience you gain, the more you learn what's "normal" and "acceptable." You start following patterns that worked before.

We challenged one repeat founder recently: "Look through everyone you've ever met in your life. How many would you describe as truly unreasonable?" Try it yourself. You'll struggle to find more than ten people. Unreasonable people are incredibly rare.

This matters because unreasonability is often what drives massive outcomes. The willingness to do things that seem insane to everyone else. To persist when logic says quit. To zigged when everyone else zags.

The more successful your first venture, the more likely you are to become reasonable and conformist in your next one in ur opinion.

When previous fundraising can create shortcuts in due diligence

Why does past success blind us to present risks?

We've seen this pattern repeatedly in our observations. A founder raises $50 million and fails. Or they build a company that goes public but crashes later. But they can still raise money incredibly easily for their next venture.

Even founders who previously burned through massive amounts of investor capital find VCs lining up. There are exceptions of course - those who ended up in prison - but even some of those have managed to raise again.

This creates a dangerous dynamic. The signal of previous success or previous fundraising becomes a shortcut. Investors start skipping the hard work of understanding who this person really is. Instead of digging into personality, traits, preferences, and quirks, they rely on the lazy heuristic: "This person raised money before, so they must be good."

This shortcut actually makes you more susceptible to backing the wrong people. You're essentially gambling that past performance predicts future results, which we know is dangerous in any context.

We experienced this firsthand at Foundamental. A founder from a unicorn company that went into administration started a new venture. For months, no VCs paid attention. Then the original CEO of that failed unicorn joined as co-founder. Suddenly, over a weekend, VCs were buzzing. Term sheets flew. Nobody had done proper due diligence on the market, competition, or even the original founder's capabilities.

The power of the signal was so strong that rational decision-making went out the window. VCs were making investment decisions based purely on association with previous funding rounds, not on the fundamentals of the business or the quality of the founders.

But here's the problem with this approach: you can't sell at the next up round. Even if this temporal arbitrage works and the company gets an up round based on hype, you're still stuck with the investment until exit. If the fundamentals aren't there, if the founder isn't the right person, the business won't become timeless.

Using previous fundraising as a primary signal creates more risk, not less, because it prevents you from doing the deep work of understanding who you're really backing.

Why true unreasonability gets diluted with experience

How do we spot founders who've kept their edge?

The founders we're most interested in aren't necessarily the ones with the most experience. They're the ones who've maintained their unreasonable edge despite their success.

We've developed a specific filter for this in our observations. We look for repeat founders who can clearly articulate what truly matters to them and what trade-offs they're willing to make to protect it. Not generic VC-speak about "working hard" or "building great products." We mean specific, earned insights

For example, a founder might say they won't raise from certain categories of investors, even if it means excluding high-quality names. Or they'll choose to raise less money than their reputation might allow because they understand valuation pressure. Or they'll insist on specific round structures based on hard-learned lessons.

But if a repeat founder can't articulate what they want to protect from their previous experience, that's a red flag. If they haven't learned what matters most to them, have they really learned anything?

We also look for founders who internalize blame and responsibility. First-time founders get some latitude for mistakes made out of ignorance. But repeat founders? They should hold themselves to a higher standard. If they're still externalizing blame - "the board wasn't supportive," "competitors raised more," "the market moved against us" - that's problematic.

The ability to say "here's what I did wrong, here's how I contributed to the failure, here's what I learned about myself" is crucial. Not just tactical learnings about market timing or product features, but deep self-awareness about their own decision-making patterns and blind spots.

Reference calls can help reveal some of this, but they're not sufficient. References tend to sharpen blurry contours rather than reveal fundamental personality traits. You still need direct conversations with founders about specific incidents and decisions.

The formative years remain crucial. We spend significant time understanding founders' earliest experiences because those shape core personality traits more than professional experiences do. The preferences and traits that make us who we are come from our earliest and deepest experiences, not from our latest startup.

The rare repeat founders worth backing are those who've gained experience without losing their unreasonable edge - and that combination is incredibly difficult to find.

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Conclusion: The Unreasonable Founder Filter

Most investment decisions around repeat founders are sometimes based on lazy heuristics. Previous success, previous fundraising, or previous experience become shortcuts that prevent deeper evaluation. But these shortcuts can sometimes lead to backing founders who've become too reasonable, too conformist, too willing to follow patterns that worked before.

The framework we use focuses on personality over experience. We look for founders who can articulate what they've learned to protect, who internalize responsibility, and who've somehow maintained their unreasonable edge despite their success. We spend time understanding their formative years because those experiences shape core traits more than professional ones.

This approach might cause us to miss some outcomes. But we believe it's more likely to identify founders who can build truly transformative companies rather than just successful ones.

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