Why We Read Papers

Why our sourcing runs through the lab, not just the accelerator

Some of the most valuable companies in the world, Google and Databricks among them, started as research projects in university labs, years before they had a name, a brand, a deck, or a fundraising round. They start as the work a small group does at the niche edge of a field most of the market is unaware of. That is where we spend a disproportionate share of our sourcing energy, and this week gave us a great proof point of that strategy.

Arena announced a $100M annual revenue run rate, eight months after launching its evaluation product. It started as a research project at UC Berkeley, with one mission: to measure AI progress through real-world use. The company is barely a year into commercialization, but that research began back in 2023. By the time the revenue showed up, the hardest part was already done: earning the whole field’s trust as the neutral scoreboard for AI.

That gap is what we keep coming back to. Arena’s team figured out how to measure model utility before it was even recognized as a central problem by industry. The research was the moat, and the revenue is the market catching up to a bet placed long ago in a lab. We would rather get to know these people while they are still publishing than compete for them once every fund has the same warm intro.

This is why our focus on academics is so deliberate. At the frontier, in AI, robotics, energy, and cryptography, the durable edge tends to be technical depth and being early to a paradigm. Academics live there by definition. They often see the shape of the next S-curve before it has a name, and they carry conviction that is hard to reverse-engineer from a competitor’s launch.

It also shapes where we look. We think the best technical founders are spread far wider than the target-school shortlist suggests, so we put as much energy into the research groups at UIUC, UT Austin, and Georgia Tech as we do at Stanford or MIT. The work coming out of the less-trafficked programs is world-class, and the founders behind it are often the least contested. Getting to know them early is one of the most underrated edges we have found in venture.

So we try to treat the lab as the top of the funnel. We map research groups, we read the papers, and we build relationships years before anyone incorporates. Arena is a good reminder of why that patience compounds. The company was there for anyone paying attention, long before it printed a nine-figure run rate. The best companies are often visible on paper first. Our job is simply to be reading.