S2E12: Beyond the Multistage Trap – Will Lehmann on Building a Solo Fund with Precision

Before launching Step Function, Will Lehmann spent years at Bain Capital Ventures, cutting his teeth on enterprise software deals. Now he’s charting his own course with a $12M fund that’s small by design, early on purpose, and built to back edge cases before they become power laws.

Most managers who spin out of multistage platforms make the same mistake. They raise big because they can, then wonder why the quality of founders drops off. It’s a common pitfall where they’re suddenly exposed to the truth that those founders were there for the brand of the firm, not the individual GP. Will is betting on something more durable: being the right size to matter.

"$250k is meaningful to the founders, and small enough that you can be collaborative," Will explains. It's the sweet spot where you get "the support of a multistage investor but with the look and feel of a super angel."

Step Function's focus is backing technical founders building infrastructure software. Developer tools, data infrastructure, AI infrastructure, security, monitoring, observability. Will sees two forces at work here that most miss.

First, the density of power law outcomes. “I struggle to think of any other area of software where you so reliably get multiple multi-billion dollar outcomes every year.” The enterprise software data on exits backs that up: Snowflake ($3.4B), Confluent ($828M), Rubrik ($752M) on the public side. Plus huge acquisitions like Databricks’ billion-dollar-plus bet on Neon.

Second, the practitioner's advantage. Infrastructure software attracts founders who are users first, builders second. They've lived the pain, understand the gaps, and have prescriptive points of view on what needs to exist. "That was me," Will reflects. "I have a very prescriptive point of view on what the product is and how to build it. That true authentic mission-driven founder…I just don't find it quite as common in other spaces."

This matters more than most realize, and as he puts it “Incremental improvements at the infrastructure layer create step function changes at the application layer.” It's systems-level thinking that compounds across the entire software stack.

Will acknowledges the comfort of being at a large fund. A dedicated IR team, teammates, institutional support. But he's betting that being small, nimble, and specialized gives him the best shot at delivering returns to LPs. In a world where venture is splitting between early and late, Step Function plants its flag firmly on the early side, where the big guys have left cracks of opportunity.

The infrastructure software wave isn't slowing down. If anything, it's accelerating as AI reshapes how we build, deploy, and scale systems. Will's positioning Step Function right in the path of that transformation, backing the technical founders who will architect the next layer of the stack. We just hope that he stays small ;)

Special thanks to Evan for the intro to Will 🙏

To hear more, visit slicefund.substack.com