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Episode 08 The Investor Series
Max von Poelnitz on why selling at token cost is not product market fit
Max von Poelnitz, General Partner at Foothill Ventures, a US$300M seed stage deep tech fund in Los Altos, California, on backing technical founders in AI infrastructure, physical AI and enterprise AI with US$2M to US$5M seed cheques, why the fund passes, why real product market fit needs an acceptable gross margin, and why founders should build for their customer, not their next fundraise.
The mandate
Technical founders at the frontier, from seed
Max is based in Los Altos, California, and joined Foothill Ventures as a General Partner earlier this year, one of three partners. The fund was started in 2017 by his two partners, who studied at Tsinghua University before doing their PhDs in the United States and staying on. The founding idea was to back exceptional, often immigrant, founders in the United States building at the frontier of technology, in software and hardware alike. Max, who came to the US from Germany as a child, says that thesis has only grown stronger, with the semiconductor boom bringing a wave of electrical and mechanical engineers into startups.
deep tech fund
US$2M to US$5M at seed
companies
and growing
You don’t build for the investor. You build for your customer.Max von Poelnitz, Foothill Ventures
Key takeaways
How Foothill Ventures decides
What the fund backs, why it passes, and what Max tells founders about growth, margins and investors.
Three areas, US$2M to US$5M at seed
Foothill writes about US$2M on average, anywhere from US$2M to US$5M at seed and sometimes at Series A. The focus is unchanged across its funds: AI infrastructure (photonics, data centre efficiency, thermal and cooling, advanced packaging, chip design), physical AI (robotics and smart manufacturing as the United States reindustrialises) and vertical and agentic AI for the enterprise, with the security, observability and efficiency engineering that comes with it.
Why Foothill passes
At seed the fund looks at the founder archetype: at least one technical founder, a team that understands the problem it is solving deeply (often through a go to market co founder), and integrity. Many of its most successful companies look nothing like what they built at seed, so how founders handle pivots and customer demands matters. Every deal goes through reference checks and a clear checklist on the founders and the dynamics between them.
Gross margin is part of product market fit
Max sees many companies building without solving a customer problem someone will pay for at an acceptable gross margin. Selling at token cost with a tiny margin on top is not real product market fit, even with exceptional revenue growth; one portfolio company reached US$60M ARR in six months. Compressed early margins, common in robotics, are fine with a credible path up. Foothill looks two to three years out to judge whether revenue is durable.
Build for your customer, not your fundraise
Ask whether you need venture capital at all: a tier one Silicon Valley investor brings real intensity. Go and see great first, through accelerators or time with successful founders, to learn what it takes to scale. Too many founders build for their next raise, and the best investors see through it. A VC is one voice on your cap table and your board; the decision stays with the founder, and good VCs help you narrow your go to market and focus.
Max's closing advice to founders: if you are an exceptional technical founder building in Foothill's areas, check whether you match the fund's stage and thesis and reach out. Foothill Ventures is at foothill.ventures, and Max is on LinkedIn.
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