Why We Invested: Circuit Mind

🌐 Hardware Runs Our World, But Moves Slowly

From the A/C unit in an office to the Oura ring on your finger, our world is increasingly inundated with electronics and the systems they underpin. Physical hardware systems are inextricably linked to our daily lives in ways that we sometimes fail to realize. Developing hardware products is an incredibly complex cross-functional process that has remained largely unchanged for the last 45 years. Teams take months-to-years of careful planning and thousands-to-millions of dollars to successfully launch new products; lagging behind a world that increasingly moves at the speed of AI.

In electronics, all hardware product development starts at the atomic unit: the printed circuit board (PCB). In spite of their importance, the design process has remained obstinately manual, with engineers designing, testing and ultimately debugging their boards by hand. At the same time, even the slightest inaccuracy can translate to months in delays and lost revenue.

⚡ How ACE Accelerates Circuit Design

Circuit Mind’s Assistant to Circuit Engineers (ACE) engine enables these same engineers to iterate and generate design options hundreds to even thousands of times faster than the traditional process. Developing these capabilities is a non-trivial technology problem. Each component’s characteristics from cost, size, power or availability has to be encoded within the system at a high fidelity to generate accurate results. Circuit Mind’s proprietary, domain-specific algorithms provide the level of physics-based grounding that general purpose LLMs cannot reliably replicate.

🤝 Our Journey with Circuit Mind

We first invested in Circuit Mind back in 2022 when we led the Seed round and have continued to invest through the just-announced Series A that was led by Norwest Ventures. That first investment came before the ‘GPT moment’ and, as time marches on, and the rhetoric around super intelligence and AGI persists, our conviction in Circuit Mind has only strengthened.

📈 The Original Thesis and the Market Today

Our original thesis was that Circuit Mind’s approach to building ACE would earn them the right to win large enterprise contracts with global organizations that set an incredibly high bar to clear in order to deploy software in their environments. Specifically, Circuit Mind’s approach to amassing a large dataset of component specs coupled with proprietary, physics-based models, and integrations built into existing systems sets them apart from other competitors that would only be able to serve the lower end of the market. At the time, we estimated the Electronic Design Automation (EDA) software market to be approximately $10.4 billion with the Enterprise segment representing ~$3.6 billion across 9,000 potential customers. The small customer segment was slightly larger at $3.8 billion but spread across 190,000 potential customers, making for an extremely fragmented sales motion. According to Pitchbook research, the EDA market is now estimated to be $14.5 billion and is expected to reach $25.3 billion by 2035.

🤖 What’s New: The Agentic Verification Engine (AVE)

Circuit Mind’s new product offering, the Agentic Verification Engine (AVE), leverages the power of the existing ACE system paired with the advantages offered by AI agents to drive even more value to their customers. They do this by verifying designs against sources of truth to identify potential issues prior to prototype development and avoiding expensive manufacturing respins. We have always been believers in using the most appropriate set of tools available to solve big problems so the combination of 1) accuracy attained by using proprietary, physics-based models and 2) LLMs’ fluidity, embodies our perspective on deploying dynamic-AI systems.

👥 Betting on the Founders

Finally, the bedrock of any seed-stage investment is the quality of the founding team. We spent a lot of time with Tomide and Basilio leading up to the point of issuing them a term sheet. It was very much a bilateral process of getting to know one another before embarking on, what we all hoped and expected, would be a 10+ year journey of building a company that would transform an industry that hasn’t changed all that much since 1981 when Daisy Systems, Mentor Graphics, and Valid Logic Systems first commercialized workstation software for electronic design, schematics, and verification. What stood out to us went beyond the obvious complementary skillsets that Tomide and Basilio possessed. The other intangibles - the things that don’t necessarily make it into a diligence memo - were what made this a definitive ‘yes’ in our investment committee meeting.

🔑 Four Attributes That Stand Out

Four attributes come to mind when I reflect back on building the case to make the investment in Circuit Mind and are still the points I focus on when taking reference calls about the company.

1. 🎓 Deep Expertise

   Both founders are a wealth of knowledge about the industry and the profession. They were patient with us and taught us about the intricacies of a market where we had limited operating experience.

2. 🔥 Passion & Commitment

   They both have an obvious passion for the problem they are solving and a commitment to building an outlier product and company. These guys have lived on the road and, on multiple occasions, left their lives in London behind to set up shop in New York or SF for 4-6 weeks at a time to take investor and customer meetings.

3. 💼 Capital Discipline

   They treated the (at that point, limited) company money with the same care as they would their own. They shared AirBnB’s in parts of the outer boroughs of NYC or New Jersey that I’d never heard of and stayed in hotels that had the word “Inn” in the name. But they worked non-stop and I think actually had fun living those experiences. [Note: as a member of the board for the last 4+ years I am very pleased to share that they are still cost-conscious but also stay in hotels where I don’t fear for their safety].

4. 🧠 Thoughtful Decision-Making

   Finally, they’re incredibly thoughtful about every key decision. They listen. They research. They debate. Sometimes they debate some more… They decide. Both Tomide and Basilio possess the critical skills of being able to admit when they don’t know the answer to something and an openness to changing their opinion on a topic as new information presents itself. From my perspective, they have always arrived on the best decision for the company at each critical juncture.

🏁 A Milestone Worth Celebrating

Raising a Series A from a superb firm like Norwest doesn’t mean it’s time to declare success but it is an important milestone to celebrate on the long journey of building a transformational startup. It’s also an inflection point that validates the hard work of the team to-date and gives them the opportunity to continue building out their vision - a validation that only ~15% of companies which raised a seed round get to experience. Most importantly, it’s a great time to reflect on the journey of the company so far and appreciate the personal growth we have witnessed in each of the founders over the last several years.

Looking forward to continuing the journey!