It’s that time of year when many of us take stock in our lives, what we have accomplished, and the people who are a part of it. I feel fortunate that I got to spend Thanksgiving with my quirky and loving family. They might not look perfect, but they love perfect, which is how I prefer it.
I’ve been thinking a lot about Tech Wildcatters, our vision, and how far we’ve come since setting out to raise the first fund in 2009. The startup trend (it’s kind of a big deal now, in case you hadn’t heard), the local technology community, and our portfolio have all grown in ways that I couldn’t predict.
This year our theme was all about getting down to business, about results-oriented investing. We built a new system – the Gauntlet protocol - around how we invest and how we operate. Boy does it show in the progress of the companies we are funding and the ease with which we manage things day to day. The Gauntlet is proving to be a big part of the answer to deploying funds in early stage companies. We couldn’t have done this without a stellar team building the processes and system around the program.
Exits remain one of the challenges in our community, and many other startup areas in the world. We believe that it is a bit of a chicken and egg problem. There is a general lack of education and advisory services for early stage exits locally. We will be working in 2017 to educate all of our portfolio companies about how to prepare for the times when they are approached about acquisition. We will also connect them to resources to help them with their decisions and plans.
We intend to focus heavily on portfolio companies, and deploying the rest of the latest fund, in Q1. Under our old model, we would start raising a new fund in January. That model doesn’t work with our new program, so we will raise when the time is right, and a larger percentage of the current fund is deployed. This means that we will not start a new cohort in February, though we may bring in a few new very select companies.
Finally, we are aligning our programming to the year round needs of our mentors and founders. Rather than sprinkle events throughout the week, all education and connections events will take place on Wednesdays. We are also taking the fractional approach to some of the job roles in the organization, and creating a leaner, more flexible team that reflects our focus on portfolio management.
For those of you who would like to understand more about our “why”, allow me to tell you a story…
My vision with the Gauntlet extends well beyond the angel and venture investment world. To understand, let me take you back to our original vision for Tech Wildcatters. It wasn’t to build the best accelerator in the south, or even globally. It wasn’t solely to return tons of cash to investors (though as one of its largest investors, it is certainly a top goal). Originally it was to see north Texas be considered a top 3 region of innovation by 2025. A lofty statement indeed, which would mean that whatever we started had to be iconic, and had to return a ton of value. Clearly we have a few years to go in the ultimate vision, but I feel like it’s time to confess something.
I don’t believe in that vision anymore.
I came up with that vision because I was pissed. Which by the way, welcome to the reason behind many entrepreneurs’ success. I was pissed because I wanted to build something, a product and company, and I was told by EVERYONE that I couldn’t do it in Dallas. I would have to move to Silicon Valley in order to do it.
So I embarked on a mission to prove them wrong. Do I believe that I could start that same idea and company now in Dallas? Yes, I absolutely do, and that’s something we’re really proud to have played a part in changing.
Unfortunately, a vision that encouraged a competitive landscape, which anything with ‘top 3’ in the statement is – was shortsighted. We could have embarked on an even greater mission, but it turns out that other people have, and that vision is already being built! If I could rewrite our vision statement, which I am now, it is that any entrepreneur, anywhere should have access to the education and resources to start a business. The awesome part is that so many companies are already making this vision a reality!
Many entrepreneurs have built amazing platforms that enable people anywhere to start any kind of business. They are disintermediating governments and corporations. They are empowering the individual to be self-sufficient. In short, we live in a completely different world than we did 10 years ago, and people are starting to realize it.
Allow me to Gabsplain a bit more…
This Thanksgiving I got a question that I hear a lot. My stepfather asked if I knew any investors that would fund his invention. I love people who create things from their own brain, so rather than tell him the truth about his chances of raising capital, instead I told him about a few platforms he could use, in a just in time model, to manufacture and sell his item. We recently funded SD3D, a company that does small scale manufacturing using 3D printers. The founders saw how inefficient printers were when working for a manufacturing company, and decided to build automation tech that would intervene and fix the biggest issues before they required downtime or messed up the print. The technology itself is revolutionary. But what it does for people like my stepfather is the real game changer. Rather than going to China to have 50,000 units of his product made and shipped, with all the ensuing risk of knock-offs, molding, shipping, lead times, inventory, etc, he can just scan one of his prototypes, and print as many copies as he can sell.
He also mentioned that the item was too long for regular shipping, so he wanted to build a model that folds. In comes a company we funded called Selery that can take his items straight from SD3D and ship them anywhere in the world, without him ever touching a thing. And with the proper size packaging at the best rate.
Don’t have a website to sell from? Strikingly now has a simple store that competes with the simple and effective Shopify. Post some Facebook ads and the orders start rolling in. Not a designer? Imagine my luck to share a house in Australia for a week with the founders of Canva, before they launched their design platform that makes anyone look like a pro. Is the CEO displacing talented designers with this? Think again. She happens to be a talented designer herself and wants everyone to be able to understand and afford beautiful designs.
Sales and marketing automation? I posted this through Hubspot, which is where we manage all of our contacts, pipelines and communications. It’s a game changer for a small company. As are HR platforms like Zenefits and accounting systems like Quickbooks online.
Oh, and distribution? Amazon, that lovable giant, has a program that will pre purchase 5,000 units of your nifty new product, especially if you go out and crowdfund it to build your first run.
Some of you are reading this thinking that your idea requires far more investment in product development or sales than simple platforms can provide. Many of you are correct, and we will continue to connect founders at the right time. Though even you can benefit from distributed, just in time platforms. Want to do big data analysis and need supercomputers and programmers to run the accelerated apps? Think again. TW alum Nimbix puts the power in the hands of the researchers with their Jarvice platform. It’s like having your own personal supercomputer – no coding required.
We’re excited to start our first intensive one-week Gauntlet Bootcamp in January. Anyone who wants to play the entrepreneur game can come learn best practices and plug into the best platforms with a group of others learning to do the same. It won’t be easy, but it will be worth it. It’s our first zero equity offering, and represents the shift we see in the marketplace. They’ll get to pitch to investors the final night, and will be prepared to launch and scale in the leanest manner possible. They will save thousands of dollars and hundreds of hours learning what to do and what to avoid.
As for our growing portfolios, I look forward to investing in more platform companies, and in those companies that used platforms to get started efficiently, and are now scaling.
There are still so many pieces missing. Maybe some of you reading this are filling in with new solutions. We want to hear about them! One of the biggest pieces missing in our community is connecting companies we have invested in to their next big step, be it private equity, strategic acquisition, or IPO. It’s another one of those things that I’m starting to see some platform companies built around, and we will be exploring in 2017.
Now that you know our New Year’s resolution, what is yours? How can we help?