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Adversity Capital

01 / 06  ·  An early-stage investor

Adversity is a form of capital.

The resilience, judgement and resourcefulness you earn the hard way is real capital — the one kind that cannot be inherited, bought or faked. The market keeps under-pricing it. We are an early-stage investor backing founders whose edge was earned under pressure.

What it means for founders

We are a small early-stage investor, and this site sets out the one idea at the centre of how we look at founders: that coming through real difficulty can build things that matter for building a company. Not always, and not romantically. But often enough, and clearly enough, that we think it deserves more attention than it usually gets.

Definition

adversity capital

noun · not transferable

Resiliencethe capacity to take a hit and keep going
Judgementsteadier decisions when information is short
Resourcefulnessmaking a little do the work of a lot

01

It starts with something you cannot buy.

Hard experience, worked through and learned from, leaves behind resilience, judgement and resourcefulness. We treat that as a form of capital in its own right.

What it is
The capital stack
Financial
priced
Human
priced
Social
priced
Cultural
priced
Institutional
priced
Adversity
unpriced

02

Five kinds of capital get priced. One does not.

Founders are backed on money, skills, networks, polish and industry knowledge — all visible, all valued. This one is invisible, so the market rarely pays for it.

Types of capital
Selected evidence
Seery, Holman & SilverJPSP, 2010

Some lifetime adversity beats none — and beats a lot.

Baker & NelsonASQ, 2005

Under constraint, founders recombine what is at hand.

Tedeschi & CalhounAPA

Growth comes through the struggle, not the event.

Maier & SeligmanPsych. Review, 2016

What is learned is control, not helplessness.

03

The evidence is real, and it has limits.

Decades of work link difficulty, met with some control, to resilience. The same work shows too much does lasting harm. We hold both.

The research
What we look for
Finds a way with almost nothing
Changes course without falling apart
Does not quit a week too early
Steadier when the pressure is on
Reads people, earns trust
Runs toward the unglamorous problem

04

What that looks like once someone is building.

A founder's week is setbacks and decisions made without enough information. People who have done hard before are prepared for it in a way that is difficult to fake.

In business
Where it comes from

Chosen

ImmigrationServiceSportA first ventureGoing it alone

Unchosen

IllnessCaring for familyGrowing up with lessDisplacementBeing underestimated

05

It arrives in many forms.

Some people chose theirs; most did not. What matters to us is the person it shaped, not the category they fit.

Many forms

What we do

We are an early-stage investor. We keep a low profile and mostly work by introduction. When we meet a founder, we try to understand what they have lived through and what they learned from it, alongside everything else an investor normally looks at.

If some of this sounds like your story, you are welcome to write to us. We read every note ourselves.

Write to us