Emerging Manager Files: Ashley Smith…

1. Key Themes

Theme 1: Fund structure is a deliberate strategy: the hard cap and no-reserves model

Capping fund size preserves collaboration and lets a solo GP stay a non-lead

Smith capped Fund II at $25M, above its $20M target, specifically to avoid the pressure to lead rounds.

"I did not think I was ready to build a competitive lead fund, nor do I want to. I like working with others and when you become the lead, the collaboration with other funds can start to deteriorate."

Concentrated, one-shot checks with no reserves, and rising ownership targets

Fund II raised check size and ownership targets versus Fund I, and still holds no follow-on reserves.

"Checks got bigger too, in the range of $500,000 to $750,000, and since she keeps no reserves, each company gets just one. As the first money in, she aims to own 5% to 7.5%."

"Fund I made 35 investments at pre-seed and seed. Checks averaged $200,000 to $400,000, for 1% to 2% ownership."

Price discipline matters at the top of the check range, not at pre-seed

"At a $60M valuation, 5% would cost $3M, an eighth of the fund, and in this case she thinks that 'the math doesn't work.' At pre-seed she doesn't put much weight on price. Whether a round is priced at $8M or $12M, it all comes out in the wash."

Next fund scales modestly, driven by check size ambition

"The fund would be slightly bigger at $30M to $35M and would still have no reserves. Ashley explains the motivation as wanting to write a higher check size of $1M to $1.5M at pre-seed."

Theme 2: The portfolio is moving toward selling to AI hyperscalers and scalers, for speed

Sales cycle compression is reshaping the thesis

"Vermilion's bet has moved toward the companies that sell to the hyperscalers. Ashley points out that delivering to the enterprise takes a year or two, and delivering to the AI scalers takes a day."

A "speed filter" now sits on top of founder chemistry

"She also adds a speed filter, leaning toward companies that can earn money almost right away, and the shortest path to that is through the hyperscalers."

The AI-adjacent infrastructure layer is where the winners are emerging

Both flagship Fund I names are "tools that sit around AI," and Fund II extends that into infrastructure, memory, observability and versioning.

"Aranya... turns ordinary servers into ready-to-go AI clusters in less than two days... In less than a year, Aranya began managing GPUs worth more than $500M."

"Cognee, which builds memory for AI agents... Atomic, a replacement for Git for the AI era... Lemma, which catches silent failures in AI agents running in production."

Theme 3: Network-driven sourcing and a specific, early-stage edge

Access before the big funds is the pricing advantage

"Getting in ahead of the big funds, she says, is how she gets a valuation that fits a pre-seed, and what keeps her early is a network that's so specific."

Deal flow migrated from other VCs (Fund I) to founders and pre-founders (Fund II)

"In Fund I, other investors introduced her to deals. In Fund II, most of her deals came through friends and her own portfolio founders, and increasingly through people who still have jobs and are just considering founding a company."

Her network turned out to be "the entire job"

"Her network turned out to be much stronger than she had thought, and she calls that 'the entire job.'"

Theme 4: Emerging manager fundraising playbook (what LPs actually do)

LP relationships are built 1-2 funds early; fundraising never really stops

"The reality is, you're fundraising the moment you close your last fund. I'm taking LP calls now for Fund 3 which is 18 months away."

"To myself: start the relationship two funds early. Every fast check in Fund II came from someone who had been watching before there was anything to invest in."

Fund I vs. Fund II diligence shifted from access to judgment and performance

"With Fund I there was no track record, so investors looked at her and decided whether she had access to deals that were hard to get into. This time the LPs came with 15 questions and an already modeled portfolio, which saved about 6 weeks."

Reference-checking is the real diligence

"For diligence, they called her Fund I founders, other investors in the market, and infrastructure investors at funds she had not worked with, and asked those investors why they had never worked with her before."

Top reasons LPs said no

"No real DPI yet because the investments are 1-2 years old... Fund size against their minimum check. A $25M fund can't absorb a $10M check without a concentration problem... Solo GP. Key-person risk with no succession answer."

Theme 5: Operator-GPs provide differentiated value through hands-on GTM

"My investments come with someone who ran go-to-market at GitHub, GitLab, Parse, and Twilio and will do the positioning, the launch, and the first GTM hire with you."

"Even though we're a two person fund, we behave like a 50 person fund in some ways, because we provide a lot of support."

2. Contrarian Perspectives

Staying small and solo is a feature, not a limitation

Against the common emerging-manager push to scale AUM and build a partnership, Smith deliberately caps fund size and rejects bringing in partners. The tradeoff is explicit: LPs cite solo-GP key-person risk as a top reason for passing, yet she holds the line because of brand concentration.

"I think that the fund brand is so closely aligned to me that it will be hard for someone to come in and have to work underneath that brand."

"Above that, she believes, a fund has to start leading rounds, and she wanted to stay collaborative with founders."

Pre-seed price barely matters, but ownership matters only at the extremes

Contrary to valuation-obsessed models, she argues pricing noise washes out at pre-seed, while ownership differentials matter only in multibillion-dollar outcomes.

"Ownership matters mostly in a company with a multibillion-dollar exit, where the gap between 5% and 7.5% becomes huge."

"At pre-seed she doesn't put much weight on price. Whether a round is priced at $8M or $12M, it all comes out in the wash."

Enterprise is slow; sell to AI scalers instead

The conventional dev-tools playbook assumes enterprise sales; Smith argues the fastest path to revenue now runs through hyperscalers and AI labs.

"Ashley points out that delivering to the enterprise takes a year or two, and delivering to the AI scalers takes a day."

Don't fear a thin pitch: the network does the underwriting

Her anchor LPs said yes on the same day despite an imperfect first impression, driven by third-party vouching rather than the pitch itself.

"She was coming from a 14-hour conference and was exhausted, and when it was her turn to talk about herself, she 'didn't nail that.' Fortunately, there was an investor at the table who spoke up for her."

3. Companies Identified

Vermilion Cliffs Ventures

Description: Solo-GP seed/pre-seed fund focused on developer tools, infrastructure and security with an AI bet. Fund I $13.1M, Fund II $25M.
Why mentioned: The subject of the interview and case study in emerging manager fundraising.
Quotes: "Fund I closed in August 2024 at just above $13.1M and backed 35 companies. Fund II closed in July 2026 at $25M, and her anchors and most other Fund I investors came back."

Keycard

Description: Builds identity for AI agents; founded by Ian Livingstone, Matthew Creager and Jared Hanson.
Why mentioned: Flagship Fund I portfolio win, a "big one" for Smith.
Quotes: "In October 2025 the company announced an $8M seed co-led by Andreessen Horowitz and Boldstart, then a $30M Series A led by Acrew. It has since acquired Anchor.dev and Runebook."

CopilotKit

Description: Framework for in-app AI copilots.
Why mentioned: Fund I seed investment that Smith is proud of.
Quotes: "has since raised a $19M Series A, led by Glilot, NFX and SignalFire."

Aranya

Description: Turns ordinary servers into AI clusters in under two days.
Why mentioned: One of the most remarkable Fund II deals.
Quotes: "In less than a year, Aranya began managing GPUs worth more than $500M."

Cognee

Description: Memory layer for AI agents.
Why mentioned: Fund II portfolio.
Quotes: "closed a $7.5M seed in February 2026, led by Pebblebed with Vermilion and 42CAP."

Atomic

Description: "A replacement for Git for the AI era," founded by Lee Faus (ex-GitHub and GitLab).
Why mentioned: Fund II portfolio, tied to her GitHub/GitLab network.
Quotes: "closed a $2.5M pre-seed with Slow Ventures and Irregular Expressions."

Lemma

Description: Catches silent failures in AI agents running in production.
Why mentioned: Fund II portfolio.
Quotes: "closed a $2.3M pre-seed in August 2026 with Matrix, Y Combinator and Liquid 2."

Smol Machines

Description: Portable Linux virtual machines for developers.
Why mentioned: A Fund II company she specifically loves.
Quotes: "is a company Ashley says she loves."

Baz, StarSling, East River Source Control, Fiveonefour, RadiantOps, Osmosis

Description: Fund I portfolio companies at various stages of growth.
Why mentioned: Evidence of follow-on rounds from top-tier funds.
Quotes: "Baz a $9M seed in June 2026, again co-led by Battery and Boldstart, which brought its total to $17M." / "Fiveonefour raised a $10.8M Series A in July 2025." / "RadiantOps and Osmosis each raised $6.3M."

Acquired Fund I companies: Argilla, Sequin, Delightapp, Sutro

Description: Four portfolio exits.
Why mentioned: Early liquidity signals despite the DPI concern.
Quotes: "Four companies have already been acquired: Argilla by Hugging Face, Sequin by Notion, Delightapp by Simpro Group and Sutro by Lovable."

GitLab

Description: Developer platform; Smith was 10th employee and CMO.
Why mentioned: Origin of her operator credibility and VC exposure.
Quotes: "VCs would tell you, you can't build that… we're gonna prove you wrong."

GitHub

Description: Developer platform; Smith led a ~150-person marketing team pre-Microsoft acquisition.
Why mentioned: Core part of her operator and network moat.
Quotes: "a late-stage company, 18 to 24 months from its acquisition by Microsoft, and a marketing team of 150 to rebuild."

Screendoor (Homebrew/Hunter Walk and Satya Patel)

Description: Large LP vehicle.
Why mentioned: One of two anchor LPs, with a diligence process triggered by Graphite founder references.
Quotes: "Later on, the Graphite founders emailed him to vouch for her, and Screendoor put her into its process."

Sapphire (now part of LGT)

Description: Institutional LP.
Why mentioned: Anchor LP that said yes the same day as Screendoor.
Quotes: "both firms said 'yes' over the phone on the same day."

February Capital, GEM

Description: Additional institutional LPs.
Why mentioned: February helped reach Fund I's target; GEM joined as a new Fund II LP.
Quotes: "February Capital, referred by her existing LPs... Caroline Dallas of GEM, a new LP in the fund, was already asking when Ashley was going to start."

OpenView

Description: Venture firm where Smith was Venture Partner.
Why mentioned: Her on-the-job training in deal flow and term sheets.
Quotes: "It taught her about deal flow and due diligence, how to negotiate a term sheet, and it told her which stage she wanted."

Legion, Harmonic, Rings AI, Cura, Wonderstruck

Description: Newsletter sponsors serving emerging GPs and LPs.
Why mentioned: Partnership placements.
Quotes: "Legion is a high-signal marketplace matching emerging GPs with relevant LPs, featuring seamless fund admin, built-in secondary liquidity, and over $300M in investor capital flows."

4. People Identified

Ashley Smith

Description: Founder and GP of Vermilion Cliffs Ventures; former CMO at GitLab and marketing leader at GitHub, Twilio, Parse and Google Maps.
Why mentioned: Interview subject.
Quotes: "I think I've learned more in the last three years than my entire life."

Zach Holman

Description: One of GitHub's first engineers; Smith's co-ideator and first LP.
Why mentioned: Wrote the first $50,000 check and co-runs deadangels.com with her.
Quotes: "Zach Holman, one of her tech friends, wrote the first $50,000 check."

Satya Patel (Homebrew) and Hunter Walk

Description: Run the Screendoor LP vehicle.
Why mentioned: Anchor LP relationship.
Quotes: "He gave her 90 minutes on the questions every allocator asks: her fund model, portfolio companies, check size, and deal flow."

Beezer Clarkson and Laura Thompson (Sapphire)

Description: Sapphire LP team members.
Why mentioned: Ran diligence that led to the anchor commitment.
Quotes: "together with Laura Thompson at Sapphire they started doing their own due diligence."

Sid Sijbrandij

Description: GitLab CEO.
Why mentioned: Let Smith participate in the Series A and B raises, her first fundraising experience.
Quotes: "She joined the fundraising meetings and helped raise the Series A and B."

Chris Wanstrath

Description: GitHub founder.
Why mentioned: Recruited Smith to rebuild GitHub's marketing team.
Quotes: "Now its founder, Chris Wanstrath, wanted to talk to her."

Meghan Murphy

Description: Vermilion's Head of Platform and Chief of Staff; Smith's former Twilio colleague.
Why mentioned: First hire, running portfolio GTM, fund marketing and the AGM.
Quotes: "Now Meghan is Head of Platform and Chief of Staff, helping to put everything in order."

Aryamika Bhatia Ondaatje

Description: Founder building Aranya.
Why mentioned: Publicly credited Vermilion as an investor, showing founder-investor closeness.
Quotes: "Funny how investors go from a list of names on a spreadsheet to the people you brainstorm with, and message when something works or breaks."

Lenny Pruss (Amplify)

Description: Amplify Partners investor.
Why mentioned: Co-invested in East River Source Control.
Quotes: "having generated a lot of buzz since Vermilion did the deal with Lenny Pruss at Amplify."

Ian Livingstone, Matthew Creager, Jared Hanson

Description: Keycard founders; Livingstone and Creager previously sold a company to Snyk.
Why mentioned: Example of repeat technical founders in the portfolio.
Quotes: "with Livingstone and Creager having already sold a company to Snyk."

Lee Faus

Description: Atomic founder with GitHub and GitLab background.
Why mentioned: Exemplifies sourcing from her operator network.
Quotes: "Its founder, Lee Faus, worked at both GitHub and GitLab."

5. Operating Insights

Pre-qualify LPs before spending time on them

Match fund size, thesis and style up front rather than chasing every meeting.

"Talking to investors that will never back you because your fund size, thesis, style, etc don't match their own thesis. Get the basic answers about a potential LP before spending a lot of time with them. A lot of them window shop but will never write a check because it just isn't a good fit."

Treat quarterly LP updates as the fundraising pipeline, and let existing LPs open doors

Her August LP update triggered anchor diligence before the formal raise; Fund I LPs also pointed her to wealthy tech friends and made intros for new capital.

"In August Ashley sent LPs her quarterly update and said she'd start raising soon, and LGT and Screendoor began their process immediately."

"Fund I LPs did the heaviest lifting: More than 95% of Fund I dollars re-upped, and several of them made the intros that turned into new commitments."

Add concrete operator value to founders pre-round

Support at the earliest stages (spreadsheets, introductions, incorporation) is what earns early access.

"For one she put together a fundraising spreadsheet and made close to 40 introductions... For another she's helping with a name and walking the founders through incorporation."

6. Overlooked Insights

Seed pricing has inflated while Series A access has tightened, squeezing the seed-stage thesis

This helps explain the rationale for staying pre-seed and capping size, and the "speed filter."

"Seed rounds are now priced at $30M to $50M post-money, and a Series A for companies like hers is very hard to get."

Geographic constraint is a pragmatic, not ideological, choice

Despite her remote-work background, density of network and events at pre-seed and seed drives a Bay Area/New York-only focus.

"I hate that, because I've worked remotely so much of my career, but right now, it's just easier."