Beating the Venture Squeeze: How Olaf Sakkers Builds an Emerging Fund Backing Physical Tech

Breaking into venture capital has never been easy for first-time fund managers, and current market conditions make fundraising harder than ever. Data from PitchBook reveals that established firms raising their fourth fund or later captured 86.2 percent of all U.S. venture fundraising dollars through the first three quarters of this year. Meanwhile, first-time funds captured just 4.5 percent of the capital pool, with only 81 inaugural funds closing during the first nine months of 2026. Those numbers put the market on track for the worst fundraising year for emerging managers in at least a decade.

Over the past five years, investor Olaf Sakkers has worked to prove that difficult market odds do not equal impossible outcomes. Sakkers founded his firm, RedBlue Capital, in 2021 and closed his first fund with roughly $5 million in capital commitments in 2023. He recently completed a first close on his second fund, which he expects will reach at least $30 million.

Sakkers took an unconventional path into Silicon Valley investing. Raised in South Africa, he studied anthropology at Princeton University, focusing on global health and writing his thesis on HIV in his home country. After graduating, he moved to Israel and served in the Israel Defense Forces, working a desk role coordinating with the U.S. military where he first developed an interest in autonomous vehicles.

An introduction led Sakkers to Michael Granoff, founder of the venture firm Maniv Mobility and an early backer of electric vehicle startup Better Place. Granoff hired Sakkers on the spot. Neither had worked as a traditional venture investor prior to teaming up, so they learned the investment process day by day. Together, they backed Israeli founders bringing cybersecurity skills into the automotive industry before expanding their focus to the U.S. and global markets.

By 2021, Sakkers wanted to build a more formal and scalable investment platform, prompting him to launch RedBlue Capital on his own. Today, the firm invests in what Sakkers calls the real economy, targeting startups across robotics, logistics, manufacturing, and energy.

Winning over institutional limited partners has tested his endurance as much as his sales skills. Endowments and pension funds remain difficult to land because RedBlue writes relatively small checks, and institutional risk models prioritize established brand names to avoid zero-return outcomes. Sakkers compares the dynamic to repeat startup founders who seem inevitable to investors, whereas first-time managers fight against the gravity of perception. To overcome that bias, he focuses on building long-term trust and letting portfolio results speak over time. While family offices and personal contacts backed his first proof-of-concept fund, his second fund brings in both family offices and institutional backers.

RedBlue writes checks ranging from $50,000 to $100,000, usually joining rounds led by larger firms rather than leading deals. Keeping check sizes small allows the firm to participate in more deals and deliver hands-on support, connecting founders with lead investors like Andreessen Horowitz and Thrive Capital while introducing them to enterprise customers.

That disciplined approach shows promising early numbers. Out of 28 investments in his first fund, 15 companies have marked up in valuation, generating a net internal rate of return well above 50 percent on paper. Public records back up his portfolio wins. HappyRobot, an early RedBlue investment, raised a $150 million Series C at a $1.2 billion valuation in August. Westmag, a motor maker for drones and robots backed at pre-seed alongside Nat Friedman, raised an $11 million seed round led by Andreessen Horowitz in June. Toma, an AI startup for car dealerships, followed its 2025 seed round with a $27 million Series A, and Humble Robotics secured a $51 million Series A led by Obvious Ventures earlier this month.

Sakkers credits operational discipline for his edge. RedBlue publishes detailed thesis essays on sectors like robotics and runs a custom internal database built with Claude Code to log every founder meeting, note, and introduction. Writing everything down allows Sakkers and his lone New York-based principal to work asynchronously and run internal AI agents effectively without forcing software to guess missing context. Even though physical-world startups often take longer to exit, Sakkers notes that a $30 million to $100 million fund can generate strong returns by selling stakes on the secondary market.

Industry data supports his strategy. Numbers tracked by software firm Carta show that smaller venture funds between $1 million and $10 million consistently outperform mega-funds of $100 million or more at the top end of net total value to paid-in capital. While navigating a tough fundraising climate requires constant hustle, Sakkers embraces the grind, betting that sharp focus and hands-on support will beat the emerging-manager squeeze.