Ask A Founder: Startup Lessons Learned from Work Truck Solutions Kathryn Schifferle
Posted by March 8th, 2016
Kathryn Schifferle, Founder and CEO of Work Truck Solutions, turned being a woman in work trucks into an oversubscribed $2.1 million round.
We sat down with Kathryn as she shared what her fundraising journey was like, the startup lessons she learned, and her advice to fellow founders, especially women. Here is what she had to say:
HK: Tell me a little about Work Truck Solutions. How did you come up with the idea?
KS: I was publishing a professional magazine in the work truck industry, when it became apparent that the industry had challenges, the greatest of which was the lack of final data on a finished truck. For background, a truck has two big parts – a front end and a back end – typically not manufactured by the same company. Once a truck was finished, no one was keeping track of what that vehicle had become, and so you couldn’t search and find a finished vehicle online. At first I couldn’t believe this was the case, but then I saw it was a big enough problem that a solution had to be provided.
What is your background? Have you ever started a company before?
I am a serial entrepreneur. I started six different companies before Work Truck Solutions, and had actually not planned on starting another. However this challenge was so big and complicated, and just so darn interesting, that I was pulled into it once again.
Did you do anything differently this time around, it being your seventh startup?
This was a different kind of startup for me. Rather than being passionate and compelled, I was slow and methodical. I had the mindset that if it’s meant to happen, it will, which made the entire startup experience incredibly unique. And fortunately, it worked amazingly well. In fact, internally we coined a trademarked phrase for when the right thing happens at the right time with the right people: truckma.
Silicon Alley Closes 2015 On Top In A Boom Year For Startups
Posted by February 22nd, 2016
For three out of four quarters in 2015, New York City’s tech ecosystem has led with more startup funding requests than any other region in the country, including California’s long reigning Silicon Valley. After a dip in Q3, New York rebounded in Q4 claiming nearly 20% of every funding application around the country. California ranked second with 17.8% of total applications, while Florida produced a healthy 13.3%. New to the top 10 states in Q4 are Georgia, which saw a 251% increase in applications over the previous quarter, and the nation’s capital region, with Virginia claiming 3.4% and Washington DC claiming 2.3%. Overall, 2015 closed out strong with a 21% jump in total funding applications over the previous quarter and a 61% increase compared to Q4 2014.
Over the last year Silicon Alley has had the benefit of Mayor Bill de Blasio’s Digital.NYC platform, a centralized online hub tying together the entirety of New York City’s tech ecosystem, providing visitors with the information and resources that can help turn ideas into businesses. The City’s digital ecosystem supports more than 300,000 tech jobs and an additional 250,000 supporting jobs. By the first year anniversary of the hub in October, more than 1 million visits had been tracked from more than 785,000 unique visitors. Digital.NYC was credited by Accenture as a key reason for ranking New York City as the world’s #1 innovation region. New York City’s hub has since served as a model for Boston with Starthub, and across the pond with Tech.London.startup funding
Despite a more than 20% growth in startup funding applications over the first quarter, on the international level the United States reported for the first time just slightly less than 50% of total global funding applications, down from 58.9% in Q3 and 62.5% in Q2 2015. The top players continue to grow at a rapid rate, with India’s startup growth jumping 70% for a global share of 11.6%, and France jumping 94% for a global share of 4.9%. The top 5 remained the same, with Canada and Brazil coming in fourth and fifth place with 4.4% and 3.8% respectively. However, new to the top 10 and a first appearance for 2015 was Russia, with 2% of total funding applications. Spain also returned to the top 10 since Q2, doubling its percentage to 2.4% compared to the beginning of the year. The UK at 3.5%, Ukraine at 3.5%, and Australia at 1.7%, rounded out the rest of the top 10 countries.
Applications from companies already generating revenue spiked this quarter with a 40% increase after a sharp decline in Q3. Additionally, for the first time this year, funding applications from startups that are Full Product Ready beat out those In Development to claim the top spot at 44.7%. Consumer Product & Services and Internet Web Services remained the two most active industries for startups across the globe. Business Products & Services, which was nowhere to be found among the top 10 in Q3, broke into the top 5 with 7.8% of total funding applications. Entertainment and Healthcare startups maintained a healthy presence in the top 5 with 9.9% and 8.2% respectively.
The growth in funding applications year over year points to a promising 2016 for the global early-stage ecosystem. As more startups and angel investors connect through an increasing number of funding and collaboration platforms, we can expect to see a continued increase in total funding applications.
Angel Investors Spotlight: An Inside Look at Hudson Valley Startup Funds Investment Process & Advice for Founders
Posted by February 8th, 2016
Hudson Valley Startup Fund brings together a network of the region’s successful business and community leaders to give back, supporting the launch of the next Hudson Valley visionaries. We sat down with fund managers Chad Gomes, Johnny LeHane and Paul Hakim as they shared insights into their investment process, what they look for in both group members and startups, and their advice to founders.
HK: Tell me a little about Hudson Valley Startup Fund.
HVSF: Hudson Valley Startup Fund is the first seed capital, member managed fund in the Hudson Valley. While we are based in Rhinebeck, we operate throughout the entire valley, and hold our monthly member meetings at Marist College, in Poughkeepsie. We started forming during the summer of 2015 and officially launched in October.
What is Hudson Valley Startup Fund’s investment philosophy? Why did you form this new type of group?
Before we formed Hudson Valley Startup Fund, we were the only region in New York State without an angel fund or member managed seed capital fund. It was a gap in what we, and others, saw as an important piece of creating a vibrant startup ecosystem in our region.
We created a group that is member managed so that everyone is involved in all decisions – whether it is screening, due diligence, investment, or pre/post-investment support. The three of us as fund managers fulfill the administrative and operational functions of the group, and so far, have seen this as a much better way to invest, especially regionally. We are able to bring so many more minds to the table, with so much experience and expertise, to really support companies to be successful.
As you continue to grow, what do you look for in new group members?
First and foremost is a passion for having a positive impact in the Hudson Valley, supporting founders that are launching fast growth businesses in the region. We want to continue to build upon our diverse group of angel investors with people who are interested in not only ROI but also taking an active role in helping companies be successful. We are also attracting angel investors who are interested in sidecar investments in the companies we fund.
How does your investment process work?
Right off the bat, we have some very basic criteria: 1.) The startup should be located in the Hudson Valley or have a direct impact on the Hudson Valley. 2.) The founders should have “skin in the game” in terms of personal investment of money and time. 3) Founders should be looking to scale – we are not interested in helping create lifestyle or passive income businesses. 4.) The company needs to either be early revenue or at least achieved proof of concept.
For companies that meet the basic criteria, we ask them to apply to us via Gust.com. Once an application is in, our screening committee, which currently consists of 8 members, reviews all applications. During screening, we focus mostly on their Executive Summaries and the Presentations on their Gust profiles. We have found Gust to be a really great system to streamline our process. We simply tell prospective entrepreneurs to put everything on Gust.
During screenings, we generally select two companies to come present to our members each month. Every member has equal say on who moves forward to due diligence.
Are there certain sectors or industries your group tends to invest more heavily in?
No, we purposely cast a very wide net. And we have, and continue to build, a membership that has experience in a variety of industries. In only a few months, we have seen soft tech, hard tech, construction, and food.
What are the main elements you look for when screening startups? Do you have any advice for founders on how to stand out?
We have two main recommendations for entrepreneurs. The first is around their presentation. It is important to recognize that the angel investors screening startups often don’t have time to read through each startup’s entire business plan. Instead, many screening committees focus on key pieces of information like the presentation, executive summary and team overview. Founders should keep in mind that their pitch deck on Gust doesn’t have their voice over, so all slides need to be informative and clear on their own. A good way to address this is to add a video pitch to their Gust profile so their presentation includes audio. They can also upload a version of the presentation under Documents that includes talking points, walking investors through the pitch deck in more detail. The important thing is getting all the content that would normally be part of a founder’s pitch in front of us.
Our second recommendation for entrepreneurs is that they clearly state how much they are asking for and how it is going to be used, in detail.
What characteristics do you look for in the founders you invest in? Is there anything that raises a red flag?
There are a few traits that stand out to us. First, we look for founders who have passion. We also prefer co-founders who have some experience, really want to build something, and are receptive to being helped. One of the greatest benefits we offer is our support and expertise, so we look for founders who are looking for thought partners.
Conversely, not being able to accept guidance makes us extremely cautious. Also, because most startups involve co-founders, we watch their interactions very closely. We want a dynamic that is able to survive tough times. So if they don’t seem like they work well together or have clearly-defined roles – or even more of a red flag – give us conflicting answers to our questions, that can kill a deal pretty quickly.
What are best practices for a good pitch?
First of all, entrepreneurs should state what they are looking for right up front. The screening committee will know, but the rest of the members want to know this before they get into the rest of the details. We want to hear “At this stage, we are looking for $X for the next Y months to get us through Z.” Then, founders should be concise and able to distinctly answer questions about the value proposition, goal, what they currently have, how much they are asking for, and what they will do with that investment. Founders should answer all questions directly even if that answer is “I don’t know.” They can then follow up with more color, but as a best practice, they should always be direct and straightforward.
Additionally, the best pitches are when the founders know not only how they are going to use the funds but where exactly the funds are going to get them. It shows us that the entrepreneur really understands how they need to use our investment to get them either to the next stage of funding or to profitability. And it is that level of critical thinking we like to see in our entrepreneurs.
A best practice we have seen work extremely well is when startups take the time to demonstrate their product during a pitch. Showing the demo helps investors get to that a-ha moment and gives us confidence a significant amount of work has already been done.
The final best practice is to find a way to ask the angel investors what they are bringing to the table beyond the monetary investment. Entrepreneurs that do it tactfully show that they are not just desperate for money but that they’re truly concerned with finding the right founder-investor fit. One way to approach it is to ask “What would it be like working with your group after you invest?”
Is there any question you repeatedly see founders unable to answer?
Where we really see people struggle during follow up questions is when we ask them where they need to be to get to the next round of funding or to get to profitability. People are able to say that they will last 6 months with this funding and get further, but then unable to answer what “further” means – showing that they really haven’t thought it through.