Gale Wilkinson | VITALIZE
Venture Wishlist shares ideas and themes VCs want to fund. Brought to you by Purpose Built venture studio.
Gale Wilkinson is founder and managing partner at VITALIZE, a venture firm focused on work tech. VITALIZE manages $40 million across two funds, writing $250k to $750k checks at the seed stage, and previously created a 500+ person angel community.
Gale’s venture wishlist at VITALIZE:
💼 Horizontal Work Tech: B2B software for horizontal applications relevant to any industry, like customer success, operations, and data.
📊 Proprietary Data Models: Companies leveraging proprietary data as a core differentiator.
🏠 Verticalized AI: AI-enabled solutions tailored to particularly sleepy industries. Built Right, for example, serves home services providers with integrated tools for lead generation, operations, and marketing.
Gale’s venture wishlist personally:
🌍 Sustainability: Innovations in sustainable materials, replacing Styrofoam and plastic with eco-friendly alternatives.
🐾 Pet Tech: Advancements in animal nutrition, pet health, and other services in the rapidly growing pet market.
Other insights:
🤖 AI Hype: Generic AI companies are not compelling. Without strong differentiation and proprietary data, AI startups are commoditized and overvalued.
💰 First Principles Valuation: Valuation is a math problem, aimed at ensuring 30x returns are realistic given traction, potential scale and multiples at exit, and capital requirements to get there.
📈 Shifts in Pricing Models: Enterprise is more reluctant to buy SaaS subscriptions, and is shifting toward transaction-based pricing models that align with customer behavior.
🌐 Community as a Driver: Community is increasingly attractive component to B2B business models, given the role of influencers in shaping adoption.
💡How to Find Ideas: Don’t brainstorm what you think people want. Figure out something in your life that genuinely interests you. Research, talk to people, and see what rises to the top.
🧤Founder-idea fit. Founders have to do what they love. A strong fit between personal interests, background, and the problem they choose to work on trumps anything else.
Full Interview
Tell me about Vitalize.
Vitalize is a venture firm that invests in work tech. I define work tech as B2B software that dramatically improves work outcomes. These are big ideas that create huge gains for companies and/or their employees. This includes horizontal applications relevant to any industry, like customer success, operations, and data, as well as vertical applications within sleepy but very large industries. There are often opportunities to dramatically transform how work is done today, and we look at those as well. Our fund, Fund II, is $23 million. We write checks of $250k to $750k at the seed stage.
How did you get interested in that area?
I've been investing since 2012 across many different sectors. When I look at my track record and the founders I've backed, I've found the most success within software. Specifically, the people element of work tech is interesting because we want to improve lives—whether at the employee, client, or executive level. The companies we gravitate towards are doing meaningful work to improve the lives of those groups along with company outcomes.
Are there any concepts or mental models you use when thinking about investing in this area?
Many companies fit within our work tech definition, and it’s intentionally broad. My approach to investing is about finding a magical mix: an interesting concept in a big and growing market, led by a founder with great experience and the passion to take the business forward for however long it takes to succeed. We also love to see a proprietary data element in the models we back.
For example, I’ve said for many years, I don’t invest in AI itself—I invest in platforms, big ideas, and data. In my opinion, data holds much more value than AI, which is becoming increasingly commoditized. I’m not looking for features, "me too" products, or slight improvements over what exists. That’s why I focus on ideas that are dramatically transformative. AI is often a part of what we invest in, but I’m not interested in companies that position themselves as “AI for X.” That’s not compelling to me.
So that sounds like maybe a non-consensus belief. You see AI companies getting markedly higher valuations?
Yeah, I think this is going to play out like the recent crypto bubble. What I see coming across our desk is tons of the same thing. For example, generating sales leads using AI—lead gen with AI. It’s so easy now with off-the-shelf tools, and yes, it makes sense compared to how things were done 5, 10, 20 years ago. But now, there are so many of them, and people are inundated with content—they just don’t work. There’s not enough differentiation in those models.
Any other non-consensus beliefs you want to highlight?
This was interesting—it just happened this morning. After I said our firm would pass on the investment, the founder mentioned, “Every single woman I’ve talked to that runs a VC fund has told me that we don’t have enough ARR or our valuation is too high, whereas men are much more interested.” I told her I don’t really think this is gendered, but it does bring up a non-consensus view. Maybe women are more likely to have it, I don’t know, but I’m basically underwriting a math problem.
What is the state of the business today? The valuation today? How much capital do they need to raise in the future? How much revenue can they get to, and at what revenue multiple can they exit? I bring that math back to today and ask, can I 30x my investors’ capital realistically? The higher the valuation today, the harder that becomes.
I don’t believe I should throw money at a company just because I like it if the terms today don’t make sense. I don’t have to always be under a $10 million cap or anything like that—some VCs are very strict around terms. But if something is crazy hot and everyone wants in, that doesn’t make sense to me unless all pieces are in place. I need to believe in the founder, the market, and the business model, and it has to make sense when I do the math.
So what is the last investment you made that you were thrilled or excited about?
Our latest one is Built Right. I don’t often invest in SMB, but I did this deal in the home services industry. Built Right provides a solution for small providers like landscapers, roofers, and drywall contractors to manage their business. It covers lead generation and managing their operations.
What sets them apart is their AI element. They can create a website in seconds, but it’s different from Squarespace or other existing tools because they integrate with Google Business, Yelp, and other platforms these owners need for marketing. There’s a data layer underneath that makes everything seamless, connecting the tools these providers are already using. It’s automatic but also very smart, and that’s the differentiation—the secret sauce.
They’ve grown their ARR extremely fast. It’s been a really fun business to watch. The founder is very focused on the home services industry and plans to continue building solutions specifically for these providers. I think this focus is a trend we’ll see more of, especially with AI solutions. We’re moving away from horizontal applications toward more vertical solutions tailored to specific industries as the tools get better and better.
So customers want something customized for their industry?
I think so. This is a good example—it’s not just a lead gen tool. I see so many generic lead gen solutions that don’t really work. Built Right is relevant because it integrates with the tools and systems these providers already use, which are specific to their business. It wouldn’t necessarily work for someone in a different industry.
I’ve also seen lead gen solutions specific to the legal space and other industries. Verticalization within AI tools is becoming more common because it’s so easy to get them off the ground. I think this trend will continue.
Are there any other trends you're watching that represent big opportunities?
This is more of a contrarian view, but it’s also a trend I’ve noticed. The buying behavior at companies has dramatically shifted in the last couple of years. Companies are more hesitant to buy software with recurring models, even though VCs historically have preferred those. Going forward, I think there’s less certainty that these contracts will remain. Businesses are moving toward transaction-based pricing models.
For example, the one we invested in together, Miles, is a great example. In hiring, subscriptions don’t work—they want to pay per hire. What Twill is doing is brilliant, both for its focus on community and network, and for its transaction-based pricing. It’s not 100% a service model; it’s a productized transaction that buyers can access at a reasonable price. I think more companies will adopt that pricing model.
And you mentioned a trend around community. Is that something else you’re investing in?
Yes. People are at the core of much of how I think about investing. Historically, brand has been about pricing, product, and packaging. Those things are still important, but the people-side is now even more critical.
Who are the influencers buyers are paying attention to? Who are the thought leaders in a community? Who’s managing that community? What are the community members doing for each other? These dynamics are shifting how people interact with solutions, both at the consumer and business levels.
I’m seeing a lot of community-based plays right now. I might not invest in a pure community business, but a business with strong community elements is very smart.
You see tons of deals and have for years. You’ve mentioned seeing lots of “AI for X.” But what’s missing? What do you wish someone would create?
In the software world, what buyers and executives are ready to adopt is a key factor. Companies need time to evolve and keep up with technology because there’s a human element to software adoption.
Personally, I think we’re ripe for the next stage in a lot of areas, especially sustainability. For example, why are we still using Styrofoam and plastic when better materials already exist? It’s beyond me why companies aren’t embracing that. I think we’ll see a lot of progress there in the coming years.
I’m also passionate about the animal space. As an animal lover, I believe we’ll see advancements in areas like animal nutrition, pet health, and products and services for pets. It’s a huge market, and I think we’re still in the early stages. These are the two areas I’m most excited about—sustainability and pets.
Are there any customer profiles or problems you’d direct founders towards? You mentioned sustainability and pets—anything more specific or anything within Vitalize’s focus?
I always think founders should pursue something they love. It’s going to take at least three years of running a business before you feel like you really have something, and there are so many ups and downs in the journey. You know this, Miles. I’m in year 12 of building and learning VC funds, and it’s a lot.
You have to love what you do because there will be tough days. I don’t advocate sitting down and brainstorming what you think people want. Instead, figure out something in your life that genuinely interests you. Start researching, talking to people, and see what rises to the top. Follow that, rather than forcing an idea—it hardly ever works.
So you’re advising founders to ensure there’s a strong fit between their personal interests, background, and the problem they choose to work on?
Definitely. That should trump everything else.
This interview has been edited for length and clarity.