Episode Summary

In this episode of "Venture Declassified," hosts Mike Kelly and Jacob Spock, along with special guest Nick Wangler, co-founer and COO of Orthodontic Details, delve into the intricate dynamics of venture capital and startup fundraising. The episode offers invaluable advice for founders navigating the challenging VC landscape, focusing on practical strategies to enhance their pitch and financial planning.

Key Topics

• Challenges founders face with discounted estimates
• Various financial reports: pro forma vs. financial forecast.
• Importance of accurate pipeline coverage and cost management.
• Red flags in founder behavior: overpromising and underperformance.
• Discussion on personalized vs. generic fundraising advice.
• Balance between terms, market opportunity, and founder qualities.
• Constructive criticism and the safe exploration of ideas.

Guest Bio

Nick Wangler is the co-founder and COO of Details, a company that simplifies orthodontic supply management by streamlining purchasing processes for practices. With prior experience as the Director of Special Projects at ID8 Innovation and Partner/Director of Marketing Services at DeveloperTown, Nick brings a wealth of expertise in operational efficiency and marketing strategy. He holds a degree from Olivet Nazarene University and is passionate about improving orthodontic practice workflows to enhance patient care.

LinkedIn | Website - Orthodontic Details

Hosts

Mike Kelly | LinkedIn | Start Something Ventures

Ben Pidgeon | LinkedIn | VisionTech

Jacob Schpok | LinkedIn | Elevate Ventures

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.

In this thought-provoking episode of "Venture Declassified," hosts Mike Kelly and Jacob Schpok, alongside guest Ben Pidgeon, delve into the complexities of investment decision-making in the venture capital world. This episode shines a light on the critical factors that influence whether to continue funding a company or finally "wave the white flag.

The discussion starts with the importance of not relying solely on pipeline slides, which Mike Kelly criticizes as potentially fictional. He emphasizes past performance as a key indicator of future success and stresses the need for recent achievements rather than mere future promises.

Ben Pidgeon brings up the founder education dilemma, highlighting the point at which early-stage investors must decide if continued investment in educating the founder is worthwhile. Real-life examples are shared, such as a company keeping the same big clients on their pipeline slide for a year, which Kelly uses to illustrate how tangible progress can outweigh stagnant predictions.

Jacob Schpok and the team then navigate the nuances of bridge round considerations, underlining the necessity for strategic decision-making to ensure companies have enough runway to pivot effectively rather than just cover immediate expenses. They also touch on the operational pressures and challenges that come with urgent cash flow issues, advocating for clear communication and negotiation to resolve these matters.

The conversation further explores the importance of understanding a startup’s burn rate and founders' commitment, signaling their belief in their venture by adjusting salaries when necessary. They also dive into the contrasting perspectives of funds versus angel investors, the limitations of the VC model, and the significance of maintaining pro-rata shares to avoid dilution.

With practical insights, real-world scenarios, and expert opinions, this episode provides invaluable guidance for investors and founders alike on navigating the turbulent waters of venture capital. Tune in to gain a deeper understanding of the investment landscape and the crucial decisions that can make or break a startup.

Key Topics

• Pipeline Skepticism: Emphasis on past performance as an indicator of future success
• Investment Decision Framework: Evaluation based on recent achievements and learning
• Bridge Round Considerations
• Burn Rate and Founders’ Commitment
• Profitable vs Break-even Companies: Assessment of stagnant investments and a discussion on investing in break-even companies
• Importance of Maintaining Pro Rata Shares
• Liquidation Preferences
• Founder Education Dilemma

Connect

Mike Kelly
LinkedIn - Website - Developer Town

Ben Pidgeon
LinkedIn - VisionTech

Jacob Schpok
LinkedIn - Elevate Ventures

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.

In this special episode of "Venture Declassified," recorded live at the Rally Innovation Conference, hosts Mike Kelly, Ben Pidgeon, and Jacob Spock engage with a series of live pitches and conversations with entrepreneurs and founders. They unpack the complex dynamics of the fundraising landscape for startups, exploring how the backgrounds of entrepreneurs—whether they are repeat founders or first-timers—significantly influence their approach and success in securing investments.

Mike and Ben discuss their roles as sherpas for first-time founders, guiding them through the serpentine process of fundraising. Repeat founders, having been through the process before, often present with confidence and humility. Mike shares his heuristics for pitch evaluations, emphasizing the importance of trusted personal introductions and subject matter expertise.

The episode begins with Rockland Page, CFO of ROCKaBLOCK AR, who offers a candid glimpse into their "executives in residence" program and aggressive recruitment strategies.

Next, Jim Bartek, CEO and Business Architect of Growth Heroes, shares insights on the transformative power of digital transformation for SaaS companies and the importance of strong elevator pitches to attract both talent and investment.

Emily Edwards, founder and CEO of Paradise Spreads, then pitches her innovative plant-based spread, highlighting her company's growth as it enters grocery stores and negotiates with major players like Whole Foods.

Tony Petrucciani, CFO of Boomerang Ventures, discusses his journey, focusing on building relationships and gaining traction in the market.

The episode wraps up with AJ Richichi, founder and CEO of Sprockets, who provides insights into the importance of clear direction and modest valuation expectations for startups.

Catch this episode for a blend of practical advice, real-world pitches, and strategic insights that can help guide both founders and investors toward more fruitful engagements in the startup ecosystem.

Guest Bios

Rockland Page found success in the corporate world as a graphic designer but he always wanted something he could call his own. In 2017 he launched ROCKaBLOCK, a boutique apparel shop. Built upon Rockland’s talent for original artwork and design, his work focuses on the richness and depth of Black culture.

Website

Instagram

Jim Bartek is an experienced business consultant who works with executives at growth companies to increase profits and streamline operations through automation and process improvement. As a Salesforce.com Consulting and ISV Partner, Jim and his team specialize in redefining business processes and managing the implementation of CRM, ERP, and online accounting systems. They also developed Sales2Cash, an application that automates SaaS contracts, revenue operations, and invoicing within Salesforce. With a background in advising tech startups and co-founding a consulting company, Jim is actively involved in the entrepreneurial ecosystem, serving as an organizer for major events such as The Innovation Showcase and Indy Startup Weekend. He is also cer

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.