Also Capital closes $50M Fund II backing hard tech founders who 'play to win' from day zero

Summary

Also Capital closed its second fund at $50 million, focused on early-stage hard tech investments at inception, pre-seed, and seed stages. Founder Mike Annunziata announced the close and outlined the firm's thesis on what makes hard tech defensible in an era of AI commoditization.

Annunziata's path to the fund is nontraditional. He spent seven years running a hard tech manufacturing company, then over a decade in venture, including time at the Cornell Endowment and as an angel investor before raising Also Capital's first $22 million fund in 2023. His early checks went into Radiant Nuclear, Varda Space, K2, Any Signal, Northwood Space, and Mesh. The portfolio tracks closely to the wave of founder-led hard tech companies, with most founders coming from SpaceX and similar firms before spinning out to pursue new market opportunities.

HALO thesis

Annunziata frames the fund's strategy around what JPMorgan calls "heavy assets, low obsolescence." Hard assets like chemical plants or aerospace manufacturing capacity are harder to replicate than software products that cloud infrastructure can clone. But the real moat is not the assets themselves. It's the ability to integrate complex systems at speed.

Annunziata pushes back on the idea that "the factory is the product" as a blanket principle. Vertical integration should serve a specific competitive advantage, usually speed or hitting cadence targets, not become an end in itself. SpaceX built manufacturing capacity because it faced demand it had to meet at a unit price no third party could deliver and needed speed. Varda built in-house capabilities because cadence is everything for space manufacturing. Northwood did the same for ground stations. The pattern across these companies is founders executing at rate in markets where speed unlocks economic opportunity.

When hard tech companies have genuine contracted revenue or multi-year backlog, debt becomes viable. Annunziata is direct: the right amount of debt at Series A is zero. Debt makes sense in two cases. First, buying long-lived assets tied to actual contracts with real revenue and cash flow. Second, as a bridge to a higher revenue multiple when you have visibility into hitting a specific growth milestone. Pandora took venture debt to buy servers, knowing streams would grow and create higher revenue multiples, which made refinancing equity cheaper than the debt's implied cost. The trap is using debt to extend runway on speculative capacity.

Founder signals

Also Capital looks for founders who have fun and play to win. Varda is the canonical example. The team treats the work seriously but maintains a cultural vibe, illustrated by the L.K. 99 midnight side project. The real tension is that founders can over-index on fun and lose competitive edge, or lean so hard into execution that they burn out. The firms Annunziata backs thread that needle.

On talent, Annunziata sees an opportunity for hard tech companies to absorb workers displaced by AI. Varda and Northwood already run internship programs that become talent pipelines post-graduation. The model inverts the old narrative. Instead of individuals retraining through formal education, corporations build recurring education into their operating cadence. Student debt is a structural bottleneck. People constrained by loans can't take lower-wage entry roles that lead to reskilling.

The moment

Annunziata credits departures from companies like SpaceX for creating a cohort of serious founders willing to tackle adjacent hard problems. Jared Isaacman went from payments to space and is now NASA's administrator, telling stories that inspire others. The inflection is not just that capital is flowing into hard tech. It's that founders spinning out have authentic drive and the platform to inspire others to do the same work.