Level Ventures

Level Ventures Research Investment Thesis Level Ventures is a New York-based technology investment firm founded in 2021 by Albert Azout and Sari Azout. The firm describes itself as "the capital partner to outlier managers and entrepreneurs" and operates a distinctive hybrid model: a fund-of-funds that backs emerging VC managers combined with direct co-investment into those managers' most promising portfolio companies. Albert Azout's foundational insight was observing that family offices achieved strong returns by backing small VC funds and co-investing alongside them — and institutionalizing that strategy with proprietary data infrastructure. Level uses systematic, data-driven algorithms to identify top-quartile emerging managers by assessing board seat density, network connections, and investment patterns. This gives the firm both a structural advantage in manager selection and privileged deal flow into the underlying companies. Structure & Strategy Level Ventures operates a two-track investment approach: Track 1 — Manager Investments (Fund of Funds): Level backs emerging VC managers, typically funds under $150M in size. These are often early-stage specialists building in deep tech, enterprise software, AI, and life sciences. The firm has also invested selectively in institutional funds (Fund II/III stage) with strong differentiated networks. Managers in the portfolio include Air Street Capital (AI-focused), Emergent Ventures, Heavybit (developer tools), Root Ventures (hardware/deep tech), Work-Bench (enterprise NYC), Sunflower Capital, and Topology. Track 2 — Direct Co-Investments: Level co-invests directly into portfolio companies of the managers it backs, as well as directly backing exceptional entrepreneurs. This creates a flywheel: LP relationships generate deal flow, and the firm deploys again at the company level alongside trusted GPs. Fund I targeted 50% allocation to fund investments, 50% to companies. For Fund II, the planned allocation shifts to 75% funds / 25% companies, reflecting growing conviction in the manager selection model. Fund Status Fund I — Level Ventures Core Fund: Closed at $104.1M in April 2023 with 94 investors. Fund I has been deployed and is in portfolio management mode. Fund II — Level Ventures Core Fund II: Filed with the SEC in January 2025. The firm anticipated completing fundraising within twelve months. Fund II is currently being raised/deployed. Stage Focus Level Ventures operates across the early-stage continuum, primarily participating in: Pre-Seed and Seed rounds through their LP relationships with emerging managers Series A and occasionally Series B for direct co-investments into portfolio breakouts Follow-on rounds for strong performers (e.g., Enveda's $150M Series D in September 2025) Sector Focus Albert Azout's thesis strongly favors sectors where AI is applied to hard scientific or technical problems — not horizontal infrastructure. His view: "I think it is close to impossible to build a horizontal AI infrastructure in today's market." He instead focuses on application-layer opportunities with proprietary data, network effects, and defensible moats. Core sector focus areas: Life Sciences & Biotech: Azout is most excited about AI applied to scientific discovery — gene sequencing, synthetic biology, drug discovery, high-throughput manufacturing. Portfolio evidence: Enveda Biosciences (AI-driven drug discovery, unicorn in 2025, $150M Series D). Defense & Aerospace: Deep tech investments in national security-adjacent markets. Portfolio evidence: Shield AI (autonomous AI for defense), True Anomaly (space domain awareness), Quantum Source (quantum photonic computing with potential defense applications). Enterprise Software & Automation: Future SaaS embedded within marketplaces with AI as a differentiating intermediary. Covered through manager investments in Work-Bench and direct companies. Developer Tools & Infrastructure: Through manager investments in Heavybit, Root Ventures, and Air Street Capital. Investment Philosophy Albert Azout published a March 2025 essay "Smart Alpha vs Beta in VC" applying Andrew Lo's Adaptive Markets Theory to venture capital. His framework distinguishes three VC archetypes: Smart Beta (large platforms): Deploy capital across legible signals into breakout companies Sub-Scale Beta ($150M-$500M funds): Vulnerable — squeezed by Tier 1 firms and seed managers Smart Alpha (small, emerging VCs): Win through "signal arbitrage" — pre-legible access to founders before consensus forms Level's manager-selection model operationalizes this: they use KL Divergence analysis to measure a manager's portfolio distance from larger, consensus-driven competitors. Managers who maintain high divergence — who are truly contrarian — are more likely to generate alpha. This quantitative edge is what differentiates Level from traditional fund-of-funds. Portfolio Highlights Enveda Biosciences — AI drug discovery from plants. Became a unicorn in 2025. Level participated in the $150M Series D alongside Baillie Gifford, Lux Capital, and Premji Invest (September 2025). Shield AI — Autonomous AI piloting system for military aircraft. One of the most prominent defense-AI companies. True Anomaly — Space domain awareness and space defense platform. Quantum Source — Photonic quantum computing. Level participated in the $50M Series A alongside Dell Technologies Capital, Eclipse, and Grove Ventures (September 2024). viaPhoton — Fiber connectivity infrastructure. Level invested in October 2025. Route — E-commerce package protection and tracking. Over $321M raised. Team Albert Azout, Co-Founder & Managing Partner: Background as software engineer and ML practitioner, went on to found startups with successful exits, then transitioned to venture capital. Previously at Cota Capital (Venture Partner) and Lehman Brothers. Holds a BA in Finance and Economics from Babson College. Publishes research on AI market dynamics and VC strategy. Sari Azout, Partner: Focuses on consumer startups and serves as a strategic advisor to portfolio companies on storytelling, brand positioning, and digital product design. Previously CEO and co-Founder of Bib + Tuck (sold 2015). Founder of Sublime (knowledge/productivity tool). Background in investment banking at Lehman Brothers (consumer and retail division). Studied sociology and economics at Brown University. Originally from Barranquilla, Colombia. Jake Kupperman, Principal: Joined Level Ventures in June 2021. Previously Principal at Revel Partners. Education at Columbia Business School and University of Georgia. Background includes Director roles at Levelset (LienWaiver.com) and operations at Rocket Internet. Decision Process Level operates as a partnership with Albert Azout and Sari Azout as the primary decision-makers. The data-driven screening process narrows the funnel before partner-level conviction is applied. The firm's emphasis on systematic processes suggests structured investment committee reviews before committing. Geographic Focus Level Ventures is headquartered in New York City and primarily invests in US-based managers and companies across Silicon Valley, NYC, and select international markets (including Israel through some of the managers they back). Their manager network spans the US coasts. Founder Preferences Level backs founders who operate at the intersection of science/technology and business — technical founders with domain expertise, often working in regulated or complex markets (healthcare, defense, deep tech). Through their LP relationships, they access founders at the earliest stages before consensus forms. They value entrepreneurs with demonstrated prior success or unique scientific credentials.