1. Headline & intro
Cherryrock Capital looks almost out of place in 2026’s AI-fueled, mega‑round‑obsessed venture market. Modest fund, concentrated portfolio, slow deployment, and a thesis centered on founders that big Sand Hill Road firms routinely ignore. Yet this is precisely why Cherryrock — led by former TaskRabbit CEO and Google veteran Stacy Brown‑Philpot — is worth paying attention to. In a cycle defined by hype and political backlash against diversity, she is quietly running a classic venture play with a modern twist: treat overlooked founders as an underpriced asset class. In this piece, we’ll unpack what Cherryrock’s strategy signals about where returns may actually come from in the next decade — and what European founders and LPs should learn from it.
2. The news in brief
According to TechCrunch, Stacy Brown‑Philpot launched Cherryrock Capital about a year ago to back what she calls “underinvested entrepreneurs” at the Series A and B stages, primarily in software. Instead of spraying dozens of tiny seed checks, Cherryrock’s first fund plans just 12–15 concentrated bets.
By early 2026, the firm has backed five companies, putting it roughly one‑third of the way through the debut portfolio. The pipeline is anything but thin: TechCrunch reports more than 2,000 companies had engaged with Cherryrock before the first fund even closed in February 2025.
Cherryrock’s limited partners include large financial institutions such as JPMorgan, Bank of America, Goldman Sachs Asset Management, MassMutual, Top Tier Capital Partners and Melinda Gates’s Pivotal Ventures. Many of these organisations have come under political pressure in the US to tone down explicit diversity pledges.
The firm also sits at the intersection of a new California law that forces VC firms with a state nexus to disclose demographic data on portfolio founding teams — a reporting obligation that aligns neatly with Cherryrock’s existing focus on tracking who gets funded.
3. Why this matters
Cherryrock is interesting not because it’s a “diversity fund”, but because it’s a sharp strategic response to how broken the mid‑stage funding market has become.
For years, capital flooded into seed rounds and late‑stage “unicorn” deals, while the A/B corridor — especially for non‑hyped sectors and non‑stereotypical founders — quietly starved. Many great businesses get stuck exactly there: post‑product‑market‑fit but pre‑hype, not flashy enough for billion‑dollar AI narratives, and led by teams that don’t match the pattern‑matching instincts of traditional partners.
Brown‑Philpot is effectively saying: that is where the mispricing lives.
Underinvested founders are not a moral category in her framing, but a financial one. If structurally biased systems keep high‑potential teams from accessing growth capital at fair terms, a fund that moves into that gap can buy into strong companies at rational valuations and with far less competition. That’s not philanthropy; it’s arbitrage.
The deliberate pace — five investments in a year — is also a quiet indictment of the “deploy fast, raise bigger” model that dominated the 2018–2021 bubble. In a world where AI infrastructure, compute and talent are expensive, operational help and careful selection matter more than ever. A 12–15 company portfolio forces a partner to actually show up.
The losers, if Cherryrock’s thesis works, are the mega‑funds that insisted there was no trade‑off between chasing the same 50 hot AI companies and delivering outsized returns. If overlooked founders start generating meaningful exits, LPs will ask some uncomfortable questions about how much of past “alpha” was just access, networks and bias.
4. The bigger picture
Cherryrock sits at the confluence of three powerful trends.
First, the hangover from the 2021 peak. Since the market correction of 2022–2023, growth capital has become more selective. Many crossover and hedge‑fund‑style tourists exited, leaving a mess of down‑rounds and flat‑lined unicorns. In that environment, smaller, focused funds with realistic exit expectations — including trade sales, not only IPOs — look increasingly rational. Brown‑Philpot openly acknowledges that most startups will sell rather than list, which is a much more honest base case than the industry’s IPO fantasy.
Second, the retreat from explicit DEI branding. TechCrunch notes that SoftBank offloaded its Opportunity Fund — where Brown‑Philpot previously served on the investment committee — and some large institutions have softened public diversity commitments under renewed political pressure. Capital hasn’t lost interest in returns; it’s lost appetite for culture‑war headlines. Cherryrock’s language of “underinvested” founders is both accurate and strategically savvy: it focuses on the market failure, not the identity politics.
Third, the re‑emergence of classic venture craft. Five investments in a year is a throwback to a time when partners sat on boards, knew their markets and underwrote real business fundamentals. With AI narratives making it easier than ever to raise money on vague promises, there’s growing value in investors who understand messy, regulated sectors like healthcare or media, where Cherryrock is already placing bets.
Compared to the scale‑at‑all‑costs strategies of firms like a16z or Tiger Global earlier in the decade, Cherryrock represents a shift back toward depth over breadth. If this model gains traction, expect more experienced operators — especially women and people of colour who’ve exited companies — to raise their own focused funds rather than slotting into legacy partnerships.
5. The European / regional angle
For European readers, Cherryrock’s thesis should feel uncomfortably familiar — because “underinvested founders” is almost a definition of the continent’s ecosystem.
Europe chronically underfunds entire categories of entrepreneurs: women (who still receive a tiny single‑digit percentage of VC capital), founders from Central and Eastern Europe building from their home markets, immigrant and first‑generation teams, and companies outside the usual hubs of London, Berlin and Paris. The gap between strong technical talent and available growth capital is exactly where a Cherryrock‑style fund could thrive.
Regulation in Europe is pulling in a similar direction to California’s disclosure law, albeit more slowly. The Sustainable Finance Disclosure Regulation (SFDR) already nudges funds to articulate how they consider social factors. The coming Corporate Sustainability Reporting Directive will push larger companies — and, indirectly, their investors — to report more on workforce and governance diversity. The Digital Markets Act and Digital Services Act may not be about diversity per se, but together they create a more rules‑driven environment that tends to reward companies with real governance and compliance muscles, not just growth hacks.
There are promising European examples — from Ada Ventures in the UK to several women‑led micro‑funds in the Nordics and DACH — but they remain the exception. For LPs in Europe, especially pension funds and sovereign vehicles, the Cherryrock story is a useful case study: diversity‑oriented strategies can be framed as exploiting a market inefficiency, fully compatible with fiduciary duty.
6. Looking ahead
If Cherryrock executes well, expect its playbook to be copied on both sides of the Atlantic.
In the US, more experienced operators are likely to spin out of big firms and raise specialised, sub‑$300m vehicles focused on a stage, a sector, and explicitly on founders who fall outside the standard pattern. They will market themselves not as DEI champions but as disciplined allocators in under‑served markets. The language will be about mispriced risk, not representation — even if the underlying portfolios look far more diverse.
Regulatory momentum is also unlikely to reverse quickly. California’s demographic reporting requirement may become a de‑facto standard for LP questionnaires globally, just as GDPR shaped privacy expectations beyond Europe. EU policymakers, watching the US diversity backlash unfold, could choose the same path: focus on transparency and data rather than quotas, which is harder to attack in court and easier for investors to operationalise.
For founders, the message is more pragmatic than political: in a capital‑scarce environment, you need investors who are structurally motivated to work with you, not merely to tick a box. Funds with concentrated portfolios and a thesis built around your “underinvested” status are more likely to fight for your follow‑on rounds and exits.
For LPs, the key question over the next five to seven years will be whether funds like Cherryrock demonstrably outperform vintage‑matched peers on a risk‑adjusted basis. If they do, “overlooked founder” funds stop being niche and become a standard allocation bucket. If they don’t, the industry will wrongly conclude that the problem was the founders, not the structures that starved them of capital.
7. The bottom line
Cherryrock is not nostalgia for old‑school venture; it is a bet that the next wave of returns will come from founders and markets the last wave ignored. In a cycle where AI hype and political theatre dominate the headlines, quietly backing “underinvested” entrepreneurs at the messy, mid‑stage part of the journey may be the most contrarian move of all. The real test will be whether LPs — in the US and Europe — are willing to treat diversity not as charity or compliance, but as a disciplined search for mispriced opportunity. The question for readers is simple: where do you think the next €1 billion exit is more likely to come from — the 50th buzzy AI platform, or the founder who never got a fair first look?
