Michael Scott, Venture Capitalist?

Let’s take a minute to imagine the founder journey—but not through Elon, or Zuck, or some sleepless YC grad. Nope. We're going full Michael Scott, Regional Manager turned startup icon.

So picture this: our guy Michael stumbles into a business that’s actually selling. Paper, of all things. But hey, it’s working. He's got customers, he’s got revenue, and somehow the numbers are going up. Time to raise some cash.

Dilution, Baby

Here’s where the fun begins. Michael starts raising money. First a little, then more, then a full-blown Series C. But what happens every time he takes on that sweet VC funding? New shares get issued. That means Michael’s percentage ownership in Dunder Mifflin gets diluted.

And guess what? That’s okay.

Because while the percentage of the pie he owns shrinks, the pie itself keeps getting supersized. Like, Costco-level supersized. That’s the startup math no one puts on the T-shirts:
Smaller slice × Bigger pie = More money.

From 90 Cents to $41.75

By the end of the journey, Michael’s holding onto his original million shares. That’s right—he never sold. But thanks to growth, each share now clocks in at $41.75. What used to be worth lunch money is now worth a beach house and a boat named “That's What She Said.”

Total payout? $41.75 million.

Not bad for a guy who once grilled his foot on a Foreman.

Growth > Ego

Too many founders chase valuations like they’re trophies—big numbers that look good in TechCrunch but fall apart when revenue doesn’t catch up. Michael (accidentally?) did it right: he focused on selling. He grew revenue. He made that pie bigger with every round.

And when it came time to exit? He didn’t just cash out. He feasted. 🍕

So what’s the moral of the story?

Forget owning 100% of a sad little microwave pizza. You want a mega slice of a New York-style, 5-topping VC-funded pie (just not Sbarro’s). You want growth, and you want the kind of scale that turns early sweat equity into late-stage champagne problems.

Growth is money. Growth is power. Growth is how Michael Scott went from selling paper to pocketing $41.75 million.

Be like Michael. But maybe… don’t open a café disco.

So You Built a Claw Machine — Now What?

By Scott Henderson, Managing Principal, NMotion powered by gener8tor

Imagine the claw machine you invented in the previous post in this series is earning a few thousand bucks a month, and people are lining up with their loose change. Congrats, you’re making money. Now the question is: Do you keep it small, or do you go big and raise capital?

There are three good reasons to raise venture capital. And none of them are "because some blog told you to."

Reason 1: You Found Something — And Now Everyone Wants a Bite

You spotted something the market didn’t. Maybe it’s a weird little niche. Maybe it’s the next Uber. Doesn’t matter. What matters is, now that people see you making money, they’re coming for it.

Startups attract competitors like buzzards to a fresh carcass. It’s not personal. It’s just how markets work. Amazon? They live for this. Jeff Bezos literally said: "Your margin is my opportunity." That’s not a metaphor — that’s a business model.

So you raise capital to defend your ground, move faster than the copycats, and build moats while the wolves are still circling.

Reason 2: You’ve Got IP, and It’s Actually Worth Protecting

If your claw machine isn’t just a gimmick — if there’s real tech under the hood — you might be sitting on something worth locking down. Patents, proprietary code, custom hardware… these are more than bragging rights. They’re leverage.

Think Tesla. Think Harley-Davidson’s iconic engine sound. These are not just products; they’re defensible positions. And capital helps you hold them.

VCs love startups that don’t just build, but own something unique.

Reason 3: You Need to Get Customers — Fast

This is where it gets real. Most early-stage startups don’t die because they have a bad product. They die because no one hears about it fast enough.

So you raise money to buy time — and customers. Literally. You use that capital to lower your CAC (customer acquisition cost), and you keep those customers around long enough that their lifetime value (LTV) makes it all worth it.

It's math. Ugly, beautiful, spreadsheet math.

Let’s say Spotify pays $30 to get you in the door, and they make $10/month from your subscription. If you stick around for a year or two, that’s a win. If you bounce after two weeks? Not so much.

Venture capital bridges that gap. It helps you survive the “we’re not profitable yet” part — long enough to actually get profitable.

Why Growth Matters More Than Looking Good on Paper

Let’s get honest. When investors look at your claw machine, they don’t care how polished it is. They care how fast it’s growing.

A startup pulling in $5K/month is fine. One pulling in $50K/month is fundable. One growing 20% every month? That’s a rocket ship waiting to happen.

Yeah, you’ll probably lose money up front. But those who keep growing 20% every month win because they figured out how to bend the curve up.

Founders who can prove:

• low Customer Acquisition Cost (CAC),

• high Lifetime Value (LTV), and

• a path to compounding growth

…those are the ones investors throw money at. Not because they’re lucky. Because they’re prepared.

The Point

Raising venture capital is not about cashing in — it’s about buying time to win. Time to defend your turf. Time to scale your moat. Time to turn customers into a movement. And yes — time to grow like hell.

So if you’re building your version of the claw machine, ask yourself:

• Do I have competition breathing down my neck?

• Do I have something worth protecting?

• Do I need to grow faster than my bank account allows?

If yes, then maybe it’s time to raise. Just don’t forget: the money doesn’t make your company valuable.

The growth does.

What did we miss? What would you challenge? Let us know in the comments.

🕹️ Claw Machines, Rocket Fuel, and the Venture Capital Game

By Scott Henderson, Managing Principal, NMotion powered by gener8tor

Imagine, just for a second, that you’re the first person to ever come up with the idea for a claw machine.

You know the ones — drop a couple quarters in, maneuver the joystick, hope the claw doesn't drop your prize like it’s made of cooked spaghetti. We’ve all seen them at arcades, pizza joints, gas stations, wherever nostalgia and neon lights intersect.

But now picture this: you’re the inventor. And your invention? It’s actually making money.

Steady money. People are lining up to play. The thing prints quarters like it's the Federal Mint. In short, you’ve built a business.

So here’s the question: Why on earth would you take outside investment?

Because You're Not Selling a Claw Machine. You're Building an Empire.

That claw machine — it’s not just a game. It’s your prototype. Your proof of concept. Your foothold. And maybe it’s pulling in $5,000 a month. Not bad, right?

But what if someone came along with the resources to help you install 100 of them across the country? What if you could go from $5K to $50K to $500K in monthly revenue?

That’s where venture capital comes in.

Venture Capital Is Rocket Fuel

There are only two things you need to remember from this post if nothing else:

1. Your startup is a claw machine.

2. Venture capital is rocket fuel.

Venture capital is what happens when people with big checkbooks bet on people with big ideas. But unlike banks — who like tidy spreadsheets and proven revenue — venture capitalists invest in uncertainty.

They don’t care if your business model is still half-baked. In fact, they expect it. What they want is the potential. The possibility that, given the right conditions, you’ll turn your claw machine into the next Apple. Or the next WhatsApp.

A Quick Reality Check on Risk

Let’s be real: most startups fail. Most rockets don’t leave the launchpad. Some explode on takeoff. Others drift off-course and flame out quietly.

Venture capital knows this. It’s baked into the model.

These investors are placing dozens, sometimes hundreds of bets, hoping that one or two claw machines will hit escape velocity — and stay there. Those outliers? They more than cover the cost of all the others.

So Why Raise Venture Capital?

Because the traditional path is slow.

You could keep your business small and steady. Nothing wrong with that. In fact, that path — bootstrapping, linear growth, staying private — can be great for a lot of people.

But if your ambition is scale, if you're swinging for the fences, then you need fuel. Not a gallon of gas. Rocket fuel.

Venture capital isn’t for everyone. But for those who take it on, it’s a commitment: not just to growth, but to reinvesting every dollar back into the business. No dividends. Just forward momentum.

Growth = Value

Let’s go back to your claw machine.

I'm gonna tell you something that will blow your mind. The world of finance is nothing more than a ritualized process for determining the present value of future revenue.

That's easy when you have a proven business model like a pizza shop in a college town, but startups are organizations in search of a scalable, repeatable business model. How does one even start to figure out the present value of future revenue when your startup is so early?

It'll about betting on those startups who are growing their revenue month over month. Even if the actual revenue number is small. It's all about growth.

If it’s making $5,000/month, that’s something. But if it’s making $5,000/month and growing 20% month over month? And you keep that growth rate up consistently? Now you’ve got something people want to buy — or take public.

This is what investors mean when they talk about an exit or liquidity event. It’s the day your shares — and theirs — become real money. Through an acquisition. Or an IPO.

That's when your little claw machine turns into a serious payday.

Need Proof?

When WhatsApp took a $60 million investment from Sequoia Capital, they didn’t just pocket the money. They poured it into growth. In less than five years, they went from scrappy startup to 450 million users.

And then Facebook bought them for $21.8 billion.

The founder walked away with over $10 billion. Sequoia made $3 billion on that one deal. That’s venture capital at work — high risk, yes, but eye-watering reward if you pull it off.

Final Thought: What Is Venture Capital, Really?

It’s not a loan. It’s not a grant. It’s not magic.

It’s rocket fuel.

It’s the belief — and the bet — that your claw machine can change the world.

So the next time someone asks you what venture capital is, tell them this:

It’s high-stakes belief. It’s shared risk and reward. It’s money with a mission: growth.

Now, go build your machine.

Applications are now open for the NMotion Accelerator Fall 2025 cohort, which comes with a $100K investment, twelve weeks of working shoulder to shoulder, and lifetime access to the NMotion powered by gener8tor network.

Learn more at www.nmotion.co today.

Jeff Tezak, Tiiga

Jeff Tezak from Tiiga is 2x NMotion alumni having completed the pre-accelerator gBETA Lincoln with co-founder Harrounda Malgoubri and the NMotion Accelerator 2022 program with co-founder Katy Tezak.

Katy Tezak, Harrounda Malgoubri, and Jeff Tezak

After Tiiga completed the NMotion Accelerator, the team graduated from a food tech accelerator in Tasmania, Australia. That’s when they began to experiment with go-to-market strategies and product framing.

This past fall, Tiiga unveiled a refreshed collection of products to help supercharge your gut health using the baobab superfruit.

Originally, Tiiga was all about hydration, but they listened to consumer feedback and data to realize they were more than that. Tiiga is really a gut health powerhouse. 

With the new focus, they created a new formula that increases the fiber from the baobab fruit, took out the sugar, lowered the sodium, and added coconut water powder. It’s quite tasty and refreshing.

Knowing how much the team has kept driving forward despite setbacks especially in the challenging consumer product good sector, we caught up with Jeff to ask him to share his perspective and learnings. If you know Jeff, you know he has takes.

If you could teleport back to when you started Tiiga, what advice would you give yourself?

Find revenue first, then make a product. Or figure out a solution to a problem that can give you the revenue to break even quickly. Have the confidence to do things on your own for as long as possible. I don't think I'd take my advice on these things as I think a lot of the time it's just time and effort that eventually gives you perspectives on things that happen in your life. No advice will work.

What has been the toughest decision you have had to make?

Letting people go when times were tougher. 

Who do you lean on to help refuel and recharge your mind/body/spirit?

Family, Religion and Sports. Having kids while building a business has been pretty incredible. I find myself excited about each part of my day, spending time with my family and getting to build a business. Religion, understanding that we're always taken care of and that it's as much as we want something it's out of our hands which is reassuring. Both watching and playing sports allows me to think strategically and feel pressure along with the physicality of the experience helps me to feel more alert and ready to work.

What hacks and tricks have you developed to connect with customers?

I like people and am interested in what they do, how they live and what they go through daily and in life. Basically, I find something that connects us on an interest level or between them and me. Could be people, places, things. This is easier for me as I'm interested in just about everything. 

Learn more and stock up on Tiiga here.

Devon Seacrest and Hunter Dorhout, Codebuddy

After working together at Penlink, Devon Seacrest and Hunter Dorhout decided to launch their own venture, CodeBuddy.

Billed as the “Ultimate Software Development Experience”, CodeBuddy helps you go from concept to launch and build scalable software like the pros with CodeBuddy rIDE. It's fast, it's code you can trust, it's yours.

A seasoned startup founder with experience raising capital, Devon decided to take the accelerator route especially considering this was Hunter's first time as a founder. Since completing the NMotion Accelerator 2023 cohort, Devon and Hunter have continued to grow the company's revenues at a brisk pace.

They have raised two additional investment rounds and just closed on a $872K Seed round. Devon took the time to share what he's learned. 

If you could teleport back to when Hunter and you started CodeBuddy, what advice would you give yourself?

Make sure to apply to NMotion and every other opportunity to connect with mentors, customers, advisors, investors, and advocates.   

Actively listen to what everyone has to say, but then throw it away and do what is best.  Don't over-inflate or under-inflate your ego.  Friction is good as long as you are open, honest, and respectful in your communication.  Be intense whenever you can but take care of yourself and family when time calls.  Invest in your people to take risks and learn from either outcome.  Make sure relationships have mutual value.  A lot of these messages became our core values.  

What has been the toughest decision you have had to make?

In business, the toughest decisions I've had to make are to decide when to stick with an idea or move on to the next.  Mostly because of the impact it has on other people.  

There are some ventures that I've worked on that I regret leaving to0 soon and some that I'm glad I timed-out because it led me to CodeBuddy.  Or having to make changes when people aren't in the right spots or aren't working well with other people.  

Who do you lean on to help refuel and recharge your mind/body/spirit?

Co-founder friends. Non co-founder friends. My family. Therapists. My Swedish YouTube yoga lady. My faith and church family. My surfboard.

What hacks and tricks have you developed to connect with customers?

Usability testing individuals who closely match our ideal customer profile. It's a true win-win on multiple levels.

We gain valuable feedback on bugs, user experience issues, and overall product/company direction. They get to voice their frustrations about similar tools on the market and shape a product they might actually use.

We build genuine relationships with potential future customers, not just by selling to them but by listening to them. They get a chance to experience the product in a low-pressure, collaborative environment—without feeling like they're being sold to.

Learn more about CodeBuddy here.

Teresa Friesen, SheMate

In 2021, Teresa Friesen joined the NMotion Venture Studio to build a company from scratch. Even though she came from a family of entrepreneurs, Teresa Friesen hadn’t thought of herself in that way up to that point. 

Instead, she was drawn to the field of social work and solving highly complex people issues. In addition to working in the clinical setting, she returned to the classroom as a professor to teach aspiring social work professionals.

But in the hazy days of the COVID era, she felt the urge to do something different. Through the StartupLNK Jumpstart Challenge, she came upon the opportunity to help women athletes leverage new NIL (Name Image Likeness) rules to create meaningful income sharing their knowledge and insights on a wide range of topics. 

Today, SheMate helps connect young women with Olympic, professional, and amateur athletes to learn and grow through virtual group mentoring sessions. SheMate is a partner of Hudl and the Dallas Wings professional basketball team. 

1. If you could teleport back to when you started SheMate, what advice would you give yourself?
Making your business work is going to take longer than you expect, and certainly longer than you would like. That's okay. That is a reflection of truly understanding your customers, understanding your market, and trying to determine the best next step to intersect it all. Dive into the data and keep pushing forward. 

2. What has been the toughest decision you have had to make?
Every time we have to course correct feels really tough. It's hard for me to not feel guilty or like we wasted time or money on things that did not end up going as expected. I can recognize that going a different direction is a reflection of new data and a smart move, but it's hard to let those past steps go without fixating on them.

3. Who do you lean on to help refuel and recharge your mind/body/spirit?
First and foremost, myself. I do not believe that I can fully refuel or recharge if I'm depending on things outside of myself to feel good. I start with mindfulness and reflection to bring myself deep awareness of my thoughts, preoccupations, and goals. If I find that I'm needing connection, I make quality time with wonderful people. If I find that I need a mental reset, I spend time moving my body outside. And if I find that I need rest, I let myself rest unapologetically.

4. What hacks and tricks have you developed to connect with customers?
Stop thinking about sales and instead foster relationships. Know your people, ensure they know you, and make what you are building mutually beneficial, authentic, and aligned with goals and purpose.

Learn more about SheMate here.

Kent Campbell and Victor Rivas, Quantum Qool

Kent Campbell (left) and Victor Rivas (right) are the co-founders of Quantum Qool and alumni from the NMotion Accelerator 2023 cohort. This duo have navigated the past two years by leveraging their respective strengths. 

Quantum Qool helps advanced electronics manufacturers battle their number one enemy, heat, using patented femtosecond (ultrashort bursts) laser structuring technology developed by Rivas. The technology creates more surface area, which significantly improves power and heat management by factors of 10 times or more.  

 As advanced electronics become faster, smaller and more powerful, heat and power issues with components inside of batteries, CPUs & GPUs, solar arrays and spacecraft have become a glaring problem in terms of thermal management. 

 Higher power means higher operating temperatures, which causes performance issues, operation failures, shortened lifecycles and even direct dangers, such as fires and thermal runaway, costing billions of dollars in losses. 

 Without real innovation in manufacturing, components such as heat sinks, heat spreaders, heat pipes, electrodes, solar cells, and thermal radiators will not be able to sustainably handle more heat, along with diminishing energy capacity as we electrify our future.

To overcome the challenges of a hardware-driven startup, Quantum Qool has leveraged Victor’s longstanding relationships in the field and Kent’s experience building industry collaborations to make significant progress. Industry partners have contributed in-kind equipment and services, not only reducing development costs but opening up the opportunity to leverage those partners’ customer bases.

We caught up with Kent to see how things were going and to ask him to share his insights on a few topics.

1. If you could teleport back to when Victor and you started Quantum Qool, what advice would you give yourself?
It's always going to take longer than you originally thought, but you can also do way more than you originally imagined. Put your head down and do the work, but also stay open-minded on how you can reach the outcome you desire.

2. What has been the toughest decision you have had to make?
I don't know if there has been one really tough decision, but a series of smaller ones - when to raise capital, who to hire/fire, biz strategy, etc. - that you eventually have to stop debating and just make a decision and live with the consequences. Indecision is what kills you more than anything and can be paralyzing. Just have to decide and move forward.

3. Who do you lean on to help refuel and recharge your mind/body/spirit?
I lean on a number of people and honestly should do it even more: my family, my friends, and my fellow founders. You need to get different perspectives on situations and life in general, otherwise you get tunnel vision and can really get off track mentally and emotionally.

4. What hacks and tricks have you developed to connect with customers?
The biggest hack is to be politely persistent. Everyone is busy, everyone has a lot on their plate and is running 100mph. They're going to dismiss your email, your call, your message and if you give up on the first or even second try, you won't break through. Be polite, be personal and know what they actually do. The ones that matter will eventually give you a response you can work with.

Learn more about Quantum Qool here.

Ramsey Shaffer, Uptrends.ai

Ramsey Shaffer (pictured on right) and Sam Cartford (left) are the co-founders of Uptrends.ai and alumni from the NMotion 2023 Accelerator cohort. Uptrends offers an AI-powered stock sentiment dashboard and smart alerts to help you keep tabs on trending stocks and major events, before the crowd.

In the two years since joining NMotion, Uptrends has shifted from B2C to a B2B product. They have compiled an impressive library of YouTube content sentiment analysis to help professional fund managers find shifting trends faster. 

Ramsey has also taken a strong swing at content creation to help drive awareness of the company, accelerate his learning curve, and hone his writing skills. If you haven’t already seen his series about Slawnearme.com, a cole slaw rating tool he built using only AI, here’s your chance to learn all about Ramsey’s passion for cole slaw - a surprisingly polarizing food item. 

We caught up with Ramsey to see how things were going and to ask him to share his insights on a few topics. Enjoy!

If you could teleport back to when you started Uptrends, what advice would you give yourself?

Never stop putting yourself out there, trust your gut, ask as many questions as you can. Fail until you succeed, don't let pride get in your  way. Above all, learn the right balance between opportunistically listening to the market and being laser focused on execution.

What has been the toughest decision you have had to make?

Pivoting and shutting down our first product. We launched Uptrends originally as a consumer-facing stock market news alerts platform. We quickly got to 25,000 users but struggled to monetize. We tried everything. After a while, we had to acknowledge it wasn't working. So we explored about a dozen other options, and ended up finding good early traction licensing long-form video market intelligence data to large institutional investors. We went all in on that new value prop, and ended up shutting down the original consumer app. That was a tough, bittersweet moment — on the one hand we'd reinvented our business and I'm very proud of that, but it's also never easy to kill your daisies and turn away those early customers.

Who do you lean on to help refuel and recharge your mind/body/spirit?

I'm grateful to have surrounded myself with good mentors and friends who can support, guide, and empathize. There's no such thing as a self-made man. Honestly I get a lot of energy and inspiration by talking with other founders in similar spots. Also my wife, she is awesome. Remember to call your grandma and your mom more often.

What hacks and tricks have you developed to connect with customers?  

Distribution > Product. I think the most impactful things have been simply building in public, making content, trying to cultivate community.  Growing organic distribution through content and authenticity is the biggest hack of all, especially in a world where AI makes it increasingly easy to build anything you want.  Spend less time "selling" and more time building relationships and connecting vulnerably, that's the best investment you can make. 

Learn more about Uptrends.ai here.

Carina Glover, HerHeadquarters

In 2017, Carina Glover sketched out an idea for what would launch as HerHeadquarters in 2019. Every step of the way, Carina has made the most of the opportunities she’s created through her tenacity and resilience to achieve a vision central to her life. 

As the company website states:

We're here to give women-owned businesses more, without the fight.

Behind every opportunity a woman-owned business receives, there's a woman who had to fight for it. Without the constant obstacles, gatekeeping, and lack of opportunities, they'd have higher revenue, faster growth, and greater impact. HerHeadquarters gets in the ring and exists to be their ally.

Our platform, corporate services, and certification all have one common goal: to give women-owned businesses access to the money & opportunities they deserve, without the barriers.

Along the way, the United States Congress, Forbes, American Express, Beyonce's BeyGood, and more have recognized Carina and her team for their work. 

Coming back from maternity leave after the birth of her second child this past month, we asked Carina to share what lessons she’s learned from her journey.

If you could teleport back to when you started HerHeadquarters, what advice would you give yourself?

There are two pieces of advice that I really needed to hear coming into this founder territory: 

• Give yourself grace during the tough times, expect them to come, but know that they will pass. Even when it doesn't look like it, remember that being disciplined about doing the work well and consistently will always reap a reward. Some rewards just take longer to produce. 

• Focus more on making money and less on the product & branding. Give something x amount of time to work and produce revenue/engagement and if it doesn't work, move to the next thing. Pivot faster, it means you're learning and adapting to what your audience needs. 

What has been the toughest decision you have had to make?

Any decision that would impact the livelihood of my team and their household has always been hard. That never gets easier. 

Who do you lean on to help refuel and recharge your mind/body/spirit?

I have a great village, sometimes my children and my husband refuel me, but on other days it might be a call with my advisor that makes me feel like I can get back in the ring or a conversation with one of my close friends who pour into me without even knowing I'm going through a hard time. Oftentimes, it's just the energy and aura of the right people that can recharge me. 

Thank you Carina for sharing your story and insights. You can continue to inspire us!

Learn more about HerHeadquarters and share what they are doing with the companies and organizations who can help support women-owned businesses.

How to Make Your Startup Standout

We created this post to help applicants understand how we selected the NMotion Accelerator 2023cohort. What's even more exciting is that startup founders can use the same criteria to grow their companies with or without investors.

What you’ll learn in this post:

• Our selection process for NMotion Accelerator

• Some truths about venture capital 

• Ways to strengthen your business (and application)

• Action items you can take today to help you succeed

Bees make the honey, not the bee keepers

As a startup founder, you have a lot in common with bees. Those of us investors and accelerators are more like bee keepers. While we can help create better bee habitats, the bees are the ones who search for nectar and make the honey.

Never forget that you are the one who makes things happen, not the bee keepers. That’s why we are offering up these insights and thoughts. We want to help you become better bees (aka startup founders) and grow your company.

No matter what happens, keep driving revenue and growing as a leader!

Our Selection Process

The gener8tor ethos is to leave no stone unturned when it comes to finding the best and brightest in the communities we serve. For the NMotion Accelerator 2023 Cohort, we identified 2,700 prospective companies in a six-state region and directly connected with 2,300 of them which resulted into 1:1 office hours with 271.

As the only early-stage industry agnostic startup accelerator actively operating in Nebraska, Iowa, Kansas, and Missouri, we attracted a large, high-quality applicant pool of startups mostly from the region. The 217 applications set a new record for NMotion (up from 179 in 2022) with twice as many in Nebraska alone as compared to last year.

Lesson: Don’t sleep on the gr8 Plains!

Working from gener8tor’s thesis of finding the best and brightest across race, place, and gender, NMotion is proud of these results:

• 71.75% Underrepresented Founders

• 30% Female Founders

• 67.75% from the Target Geography (NE, CO, KS, MO, IA, MN)

Equally important was the diversity of perspectives we leveraged to select from this pool. Anywhere from 3-7 different individuals on the NMotion/gener8tor team reviewed every application:

• 50% Female (11 out of the 22 reviewers)

• 31% POC (7 out of 22 reviewers)

Some Truths about Venture Capital

1. We have objective criteria and apply them subjectively

2. No one knows the future

3. We deal with possibilities and unknowns so all of our decisions are imperfect

4. For accelerators, we look for a mix of market opportunities to diversity the cohort

Keep these truths in mind the next time an investor or accelerator passes on you. While rejection still stings, don’t let it stop you. Prove them wrong!

Five Ways to strengthen your business (and application)

#1: You can’t spell traction without action

Are your customers taking an action that signals the market is interested in your solution and that you can execute on delivering that solution?

To create better traction, you can focus on:

• Ship, ship, ship: Focus on developing a minimum viable product (MVP) as quickly as possible, then iterating and improving based on user feedback. 

• Ring the cash register: Focus on obtaining one customer – whether it be a paying customer, a pilot project, or a letter of intent. Paying customers are a better indicator of market validation than a non-paying one, and non-paying customers are better than nothing.

#2: Do you have a lean, well-rounded team in place with the ability to go the distance?

Typically, the most successful, capital-efficient founding teams have a team that contains these three personas (often with folks having more than one): 

1. Dealmaker - customer growth/sales

2. Developer - product/tech development

3. Designer - customer experience

Assemble a skills grid of your founding team and recruiting to fill any gaps. You want a well-rounded team, not lopsided.

#3 Is there a path to $100M+ in annual revenue?

Venture investing about finding companies tackling large market opportunities and have demonstrated they can grow exponentially. That’s why we’re so focused on big ideas and teams who have big ambitions.

One of the tricks is to take a bottoms-up approach to show how large of a market opportunity you’re tackling. Starting from the ground and looking up helps you to discover paths to climbing that mountain.

The bottom-up formula is simple but isn’t always easy to solve.

X * Y = Z

X = # of customers

Y = Annual revenue per customer

Z - Total addressable market

If your market size is too small, you have two levers to increase it:

1. Increase the amount of revenue generated by each customer by changing your pricing

2. Increase the amount of potential customers by expanding into new markets or industries

#4: Are your resources and energy aligned with generating revenue?

Why does capital efficiency matter? It’s the north star metric for your upside as a founder and the catchall for troubleshooting. (READ: You’ll make more money when you exit)

You can create greater capital efficiency by avoiding four common faux-pas:

1. Building product for scale before obtaining your first customer

2. A founding team with lopsided skill sets

3. Optimizing for valuation instead of revenue

4. Not tracking revenue or customers as a KPI

#5: Will our investment of time, money, and network bring an outsized advantage to your company?

Again, I encourage you to remember that you are the bee. You are the one who is collecting the nectar and making the honey. You should always ask yourself if a potential investor will bring you outsized returns. If they won’t, why would you give us or them an equity stake?

How else can we be of help to you?

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