VC Shift: Why This Exec Backs Overlooked Founders Now

For years, Silicon Valley has been captivated by mega-rounds and the hype surrounding Artificial Intelligence (AI) deals. However, a significant shift is underway. Stacy Brown-Philpot, founder of Cherryrock Capital, is deliberately charting a different course, reminiscent of venture capital’s earlier days. She’s focusing on smaller Series A and B investments in founders consistently overlooked by larger firms – a strategy driven by a belief in untapped potential and a keen understanding of market gaps.

From TaskRabbit CEO to Venture Capital Pioneer

Brown-Philpot’s journey to Cherryrock Capital is rooted in a diverse and successful career. After a decade at Google and a successful tenure as CEO of TaskRabbit, culminating in its acquisition by IKEA, she took time to reflect on the venture capital landscape. “When I left TaskRabbit, I recognized a persistent gap in the market: access to capital, particularly for underinvested entrepreneurs,” she explained to GearTech. Her initial ambition, dating back to her Stanford Business School days, was to become a VC, and she’s now fully realizing that vision.

The SoftBank Opportunity Fund Experience

Prior to launching Cherryrock, Brown-Philpot served on the investment committee for the SoftBank Opportunity Fund, a $100 million fund dedicated to backing underserved entrepreneurs. This experience solidified her conviction that a wealth of promising founders were being ignored. The fund, unfortunately, was sold to its leadership team in late 2023 as SoftBank divested from the diversity-focused initiative. However, Brown-Philpot didn’t waver; she doubled down on her commitment and launched Cherryrock Capital.

Cherryrock Capital: A Focused Approach

By February 2025, Cherryrock had closed its debut fund, already boasting a pipeline of over 2,000 companies. This demonstrates a strong demand for the type of funding Cherryrock provides. The fund’s strategy is deliberately concentrated, targeting 12 to 15 investments – a stark contrast to seed funds making dozens of bets or massive funds writing nine-figure checks. Brown-Philpot, alongside cofounder Saydeah Howard (a nine-year veteran of IVP), is taking a measured approach, having backed just five companies a year after the fund’s announcement. This deliberate pace is a throwback to a more thoughtful era of venture capital.

Defining "Underinvested" Entrepreneurs

Cherryrock’s focus on “underinvested” founders is a carefully considered term, particularly in today’s socio-political climate. It signifies a commitment to backing entrepreneurs who don’t necessarily fit the traditional Silicon Valley profile. This includes founders from diverse backgrounds, geographic locations outside of major tech hubs, and those tackling problems often overlooked by mainstream investors.

Navigating the DEI Landscape

When questioned about the current political environment surrounding Diversity, Equity, and Inclusion (DEI), Brown-Philpot remains resolute. “It doesn’t change the pitch at all,” she asserts. “When we look at the investors who backed Cherryrock, like JPMorgan and Bank of America…these are financial institutions who expect a return. Our job as investors is to deliver just that.”

Cherryrock’s Limited Partner (LP) roster includes prominent names like Goldman Sachs Asset Management, MassMutual, Top Tier Capital Partners, and Melinda Gates’s Pivotal Ventures. While some of these investors have scaled back explicit diversity pledges due to external pressures, Brown-Philpot believes Cherryrock is positioned for success.

California’s New Diversity Reporting Law

A new California law requiring VC firms with a California presence to report demographic data on their portfolio companies’ founding teams is a significant development. The first reporting deadline is in April. Unlike some corporate diversity initiatives facing legal challenges, this law focuses on transparency, requiring reporting without imposing quotas. For a firm like Cherryrock, already prioritizing investments in diverse founders, compliance is “table stakes,” as Brown-Philpot puts it. “You accomplish what you measure.”

A Holistic Perspective: Boards and Academia

Brown-Philpot’s perspective is informed by her diverse roles beyond Cherryrock. She currently serves on the boards of HP, StockX, and Stanford University, providing her with valuable insights into both enterprise buyers and the next generation of founders. At Stanford, she observes students proactively addressing the impact of AI on employment. “What I see on campus is students charting their own paths and creating opportunities for themselves,” she notes.

Portfolio Highlights: Coactive AI and Vitable Health

Cherryrock’s investment thesis is reflected in its portfolio companies. One notable investment is Coactive AI, led by Cody Coleman, an MIT and Stanford graduate with degrees in philosophy and engineering. The company provides multimodal AI infrastructure to the media and entertainment industry, a sector facing increased scrutiny regarding AI-generated content. Cherryrock led Coactive’s Series B alongside Emerson Collective.

Another key investment is Vitable Health, founded by Thiel Fellow and Y Combinator alum Joseph Kitonga. Based in Philadelphia, Vitable Health offers on-demand, primary care-based health insurance to employers and hourly workers – a demographic Brown-Philpot became familiar with during her time at TaskRabbit. “He is the exact kind of founder that we want to back,” Brown-Philpot says. “He does what he says he’s going to do.” She initially invested in Vitable at the seed stage through the SoftBank Opportunity Fund.

A Pragmatic Approach to Exits

Brown-Philpot is refreshingly pragmatic about exits. “It’s very difficult to go public,” she acknowledges. “Most companies don’t go public; they get acquired.” This is a realistic assessment in an industry often prone to overpromising on IPO prospects. She points to TaskRabbit’s acquisition by IKEA as evidence that a strategic acquisition can create significant value.

Looking Ahead: Deploying Capital and Finding Great Founders

For 2026, Brown-Philpot’s priority is clear: “We are actively deploying capital.” She’s seeking Series A and B companies that have achieved product-market fit at scale, allowing founders to define what that means for their businesses. While the broader venture ecosystem debates the future of diversity initiatives, she remains focused on identifying exceptional founders, regardless of their background or location.

“I’m from Detroit,” she concludes. “Hard things are hard, but we know how to do hard things.” This embodies the resilience and determination that drive Cherryrock Capital’s mission to unlock the potential of overlooked founders and reshape the future of venture capital.

Key Takeaways:

• Shift in VC Focus: A move away from mega-rounds towards supporting overlooked founders.
• Cherryrock’s Strategy: Concentrated investments in Series A and B rounds, prioritizing underinvested entrepreneurs.
• Importance of DEI: Maintaining a commitment to diversity as a driver of financial returns.
• Transparency and Reporting: Leveraging new regulations to track and measure progress.
• Pragmatic Approach: Focusing on realistic exit strategies and product-market fit.