There is a pattern inside Harlem Capital’s investment philosophy that shows up everywhere: in the founders they back, the industries they target, and the market conditions they treat as opportunity rather than obstacle. Nicole Tommaso, a principal at the firm, put it plainly during a recent episode of VC Uncovered: “The best returns come from investing in market inefficiencies.” That single idea shapes how she reads a founder’s character, evaluates a company’s defensibility, and decides where the firm will focus its attention when everyone else is looking somewhere else.
Meet Nicole and Harlem Capital
Nicole joined Harlem Capital as an intern and fellow at the tail end of Fund One. Five and a half years later, she holds a principal seat at a firm that has since moved into Fund Two and grown into something that resembles, by her own description, a startup finding its growth stage. “Similar to a startup, everybody was doing everything in the beginning,” she said. “As you think about growth stage, everybody kind of has to focus on what they’re good at.”
Harlem Capital operates as a generalist, early-stage firm writing seed checks between $1 million and $2.5 million. The firm prefers to lead rounds because it wants to stay close to its portfolio companies and provide real operational support. Its recently launched tagline, All Winners Welcome, captures a founding principle that has not shifted even as the broader market conversation around diversity and inclusion has cooled considerably.
“We hate to see what’s happening,” Nicole said, referencing the retreat from DEI commitments across the industry. “But we stay steady. We’re going to do what we did from the beginning.”
Reading the Founder Before Reading the Business
Harlem Capital’s evaluation process at the seed stage leans heavily on character over financials, partly because early-stage companies often don’t have much in the way of financials to evaluate. Nicole described the firm’s approach as one that tries to understand a founder’s internal wiring before ever digging into the business plan.
“Markets are volatile and you need the person who is able to pivot and make things work regardless of the external factors,” she said.
The firm asks founders about their personal histories, how they grew up, and what shaped their thinking. One of its signature questions is deceptively simple: what is the earliest entrepreneurial endeavor you can remember?
“You’ll be surprised that people bring things back to being like 10 years old,” Nicole said. “They’re at recess and they’re selling candies. You know that it’s kind of innate and it’s in them.” The firm also tests for what she calls a “high slope of learning,” the ability to absorb new information quickly and do something with it. In a market where the relevant knowledge base shifts constantly, that quality matters more than any specific domain credential.
She was candid about the risk Harlem is trying to avoid: founders who have jumped onto a moment without a deep-rooted reason to see it through.
“This journey is a lot harder than you think,” she said. “We want to know that this is something that has been so deep in your bones that it’s inevitable.”
Where Software Never Landed
Harlem Capital has developed a formal investment theme it calls “leapfrogging legacy industries,” and it reflects a bet that some of the most durable opportunities in the current market sit inside sectors that traditional software never penetrated.
Nicole explained the logic directly. Many legacy businesses, from trucking to home services to skilled trades, never adopted enterprise software because the learning curve was too steep and the operational disruption too disruptive. They ran on relationships, paper, and phone calls. But AI tools, which generate outputs without requiring users to learn underlying systems, are now reaching these businesses in a way that software never could.
“They could have skipped over software, but now they’ll do AI because it does it for them,” she said. “It doesn’t need them.”
Harlem has already backed one company built around this thesis. Trash Lab is building an AI communications center for truckers, essentially a system that handles dispatch and route optimization through a phone call rather than a dashboard. “Truckers are never going to adopt software,” Nicole said. “They were never going to be on their computer inputting data. But now if they could just pick up the phone and call, AI comms does it for them.”
She also pointed to a broader generational shift. Baby Boomers are handing family-owned and small businesses to Millennials and Gen Z, who are far more comfortable with technology and more willing to invest in AI tools that produce measurable outcomes. That transition, she argued, opens a wide window for venture-backed companies to enter markets that were effectively closed to them a decade ago.
What Makes a Moat in a Zero-Cost Build Environment
Nicole was direct about how the economics of company creation have shifted. The cost of building a product has, by her description, fallen to near zero. Anyone can ship something. That reality changes what a defensible position actually looks like.
“What you have, ultimately, is speed,” she said. “Velocity of learning, velocity of shipping product. And you have data.” Proprietary data access, in her view, is one of the last remaining structural advantages a startup can hold. A competitor can replicate a tool but cannot replicate the training data behind it if that data came from years of specialized industry experience or exclusive partnerships.
The firm is also watching revenue per employee as a meaningful signal at later stages. Nicole cited Lovable as an example worth studying: the company reportedly scaled to $100 million in revenue in a single month with a staff that generated more than $1 million in revenue per person.
“We’re kind of making up new metrics to underwrite businesses now,” she said, “because the landscape has changed completely.”
On the ongoing debate between investing at the application layer versus the infrastructure layer, Nicole took a pragmatic stance. Foundation models will not solve every industry-specific problem on their own. Applications that fine-tune those models using specialized vertical data, she argued, serve a real purpose and deserve serious consideration. The deciding factor, as always, is the founder and whether they have done the customer research to know what they are actually building and for whom.
Building for the Long Game
Nicole closed the conversation with a few personal notes that illuminated how she operates day to day. She uses Claude as a thought partner and pairs it with GenSpark for presentations. Internally, Harlem is building custom Claude projects to automate recurring processes like deal memos, allowing anyone on the team to move through standard workflows without reinventing them each time.
Her wellness habit was equally straightforward: she reads for 30 minutes before bed instead of scrolling. “It turns off my brain,” she said. “It helps me fall asleep pretty instantly.”
The simplicity of that habit fits the larger approach she described throughout the conversation: clear inputs, disciplined habits, and a willingness to go where others are not. When asked what industry she would invest in outside of Harlem’s current focus, she picked consumer and pointed to beauty as a sector that is easy to underestimate and hard to time but powerful when it catches. “When consumer hits, it hits big,” she said.
That instinct, to see value where the math is harder and the outcome less predictable, is what runs through everything Nicole and Harlem Capital are building. The best opportunity, as she sees it, has always been the one that everyone else decided was not worth the effort.
This season is supported by SVB. Silicon Valley Bank, a division of First Citizens Bank. Member FDIC. SVB is a trusted collaborator for the founders pushing boundaries and the investors who back them. We’re proud to have them as our sponsor. Please note, this podcast is for informational purposes and is not investment, financial, or legal advice. The views expressed are those of the speakers and do not necessarily reflect the position of SVB.
Read Nicole’s VC Uncovered Profile
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