What is the dust-road thesis?

The dust road is the literal road outside Klerksdorp where Errol grew up: unpaved, unsignposted, only navigable by knowing where you wanted to go. The investing thesis has the same shape: back companies whose market has not formed a view yet, where the analysts are not covering, where the consensus has not arrived, and where the founder has already started walking. The cost of entry is low because nobody else can see what the founder can see. The cost of hesitation is high because by the time the consensus arrives, you are no longer the first cheque.

What does Dust Road Ventures invest in?

First cheques at seed stage in fintech, AI, health-tech and enterprise software. Cheques are small relative to the conviction behind them. The firm is kept deliberately narrow because the investments worth making are the ones nobody else wants to make yet, and that is a skill that does not scale by adding partners.

What does the Kalahari have to do with investing?

The terrain teaches a way of deciding that no amount of preparation replaces. Equipment and planning get you part of the way; after that you have to read the ground, know which ruts will hold, and know when to commit and when to find another line. Seed-stage investing is the same reading problem. The deck is the equipment, the founder is the terrain, and the decision has to be made on how well the founder already knows the ground they are standing on.

Why I Invest on Dust Roads

There’s a moment in every investment decision when you know less than you’d like to and more than you can afford to ignore. The deck is thin. The financials are a sketch. But the founder is sitting across from you, and something about the way they describe the problem tells you they’ve been living inside it for years.

That moment is what I mean by a ‘dust road’, and it isn’t a metaphor I invented for venture capital. It’s the actual road I grew up on. Klerksdorp, in what was then the Western Transvaal, sat at the edge of a country that was itself at the edge of something it couldn’t yet name. The roads out of town turned to dirt within a few miles. The wilderness backed onto the house. You knew where a road was going only by knowing where you wanted to go. There was no signage. The track didn’t announce itself. You had to read it.

I’ve spent the years since looking for that same condition in investments. The best ones share a shape: the path isn’t obvious yet, but the founder has already started walking it. The market hasn’t formed a view, the analysts aren’t covering it, and the consensus hasn’t arrived. The cost of entry is low because nobody else can see what the founder can see. The cost of hesitation is high because by the time the consensus arrives, you’re no longer the first cheque.

Conviction before consensus

I built two companies before I started writing cheques full-time, and co-founded a third after. Supply Chain Connect in 2000. Wonga in 2006. Tide in 2015. Alongside them, from 2011, the angel portfolio that grew into Dust Road Ventures.

Supply Chain Connect was hosted, cloud-based supply-chain software built from London during the dot-com bust, when European venture had virtually shut down and most of the people I respected thought the software-as-a-service premise was dead. Wonga was an automated, real-time consumer-credit decisioning system at a time when almost everyone I spoke to believed machine-driven credit was unworkable and that customers would never trust it. The early backers were the ones who could see past that.

Both businesses were started against a strong consensus that they wouldn’t work. Both did. I don’t say that to claim foresight. I say it because the pattern is the lesson. Every great company I’ve backed shares a version of it: a founder who sees a path the market doesn’t, with enough operating intuition to know which corners of the path are real and which are wishful thinking.

“Every great company I have backed was a dust road when I first encountered it. The road only looked obvious in the rear-view mirror.”

What the Kalahari taught me

I drive in the Kalahari most years: long, slow trips through Botswana, the Makgadikgadi salt pans, the Mopane woodland after the first rains. The terrain teaches a kind of decision-making that finance schools can’t. Out there the signal is sparse. There’s no map detailed enough to be useful. The weather can turn a track from passable to lost in a single afternoon. The animals aren’t background; they’re the foreground, and they aren’t curated for your visit. The vehicle either gets through or it doesn’t.

What the bush keeps teaching me is that the right vehicle, the right equipment and the right preparation only get you part of the way. After that you have to read the ground. You have to know the difference between a rut that will hold and a rut that will swallow the wheel, when to commit and when to back out and find another line. Most of all, you have to be willing to be uncomfortable for long stretches to get somewhere worth getting to.

Investing is the same. The deck is the equipment. The founder is the terrain. The investor is the driver who has to read both and decide whether the line will hold. The best founders I’ve backed have a quality that takes a while to recognise: they’ve already lived inside the problem long enough to know which ruts will hold. The pitch is just the language they’ve learned to put that experience into. The conviction is older than the deck.

I’ve written elsewhere about the three things those founders tend to share: a relationship with the problem that’s biographical rather than analytical; a decision already made before they walked into the room; and a high tolerance for being wrong about details alongside almost none for being wrong about the shape of the problem. Reading those three is most of the work.

Where the cheques have gone

The early cheques tell the same story. I wrote one of the first cheques into Wise, then TransferWise, in its first round in 2011, when it was a currency-transfer experiment a few months past launch. I co-founded Tide in 2015 and funded it from the start, before it had a single customer. And I’ve defended Bitcoin in public as a censor-resistant store of value for as long as the financial system has been deciding whether to ignore it or fight it.

Each was a dust road when the cheque went in. The valuations weren’t heroic, because the consensus hadn’t arrived. The diligence was constrained by the absence of data. The decision had to be made on the shape of the problem and the texture of the founder, because that was all there was to read.

Why permanent capital

Dust Road Ventures deploys permanent private capital. There’s no fund cycle, no LP committee, no deployment pressure. The structure matters because it’s the only one that lets me make these decisions the way I think they should be made. The best founders aren’t always ready to raise on the calendar a fund needs them to. The best companies often need an investor willing to sit through a quiet two-year stretch when nothing is working and nobody is paying attention. Permanent capital lets me be patient when the market wants me to be busy.

I write first cheques at seed stage in fintech, AI, health-tech and enterprise software. The cheque is small. The conviction is large. I keep the firm deliberately narrow, because the investments I want to make are the ones nobody else wants to make yet, and that’s a skill that doesn’t scale by adding partners.

How to find me

If you’re building something the market hasn’t realised it needs, if your path isn’t paved, if your conviction is older than your deck, if you’ve been living inside the problem long enough that the answer feels obvious to you and bewildering to everyone else; then we should talk. The road won’t be easy, and the cheque won’t solve the problem on its own. But it might be the signal you needed at the moment you needed it.

Email me directly: ed@dustroad.vc. I read every message that lands there.

Questions

What is the dust-road thesis?: The dust road is the literal road outside Klerksdorp where Errol grew up: unpaved, unsignposted, only navigable by knowing where you wanted to go. The investing thesis has the same shape: back companies whose market has not formed a view yet, where the analysts are not covering, where the consensus has not arrived, and where the founder has already started walking. The cost of entry is low because nobody else can see what the founder can see. The cost of hesitation is high because by the time the consensus arrives, you are no longer the first cheque.
What does Dust Road Ventures invest in?: First cheques at seed stage in fintech, AI, health-tech and enterprise software. Cheques are small relative to the conviction behind them. The firm is kept deliberately narrow because the investments worth making are the ones nobody else wants to make yet, and that is a skill that does not scale by adding partners.
Why permanent capital instead of a traditional fund?: No fund cycle, no LP committee, no deployment pressure. The best founders are not always ready to raise on the calendar a fund needs them to. The best companies often need an investor willing to sit through a quiet two-year stretch when nothing is working and nobody is paying attention. Permanent capital is the only structure that makes that kind of patience possible without compromise.
What does the Kalahari have to do with investing?: The terrain teaches a way of deciding that no amount of preparation replaces. Equipment and planning get you part of the way; after that you have to read the ground, know which ruts will hold, and know when to commit and when to find another line. Seed-stage investing is the same reading problem. The deck is the equipment, the founder is the terrain, and the decision has to be made on how well the founder already knows the ground they are standing on.