Today we announced $8M in new funding and a startup studio innovation -- our investors as co-founders of our spinout companies. Our investors include some of the most experienced and successful operators, including Spencer Rascoff, former Zillow CEO; Elena Donio, former Axiom CEO; Elie Seidman, former Tinder CEO; Julie Larson-Green, former Qualtrics CXO; Court Lorenzini, co-founder DocuSign; Elissa Fink, former Tableau CMO; Erik Blachford, former Expedia CEO; Mike McSherry, Xealth CEO; Jon Gelsey, former Auth0 CEO; Chad Cohen, Adaptive Biotech CFO; and Ralph Pascualy, former Swedish Medical Group CEO.
We will continue our close partnership with the investment team at Madrona, including operators Hope Cochran, former King Digital CFO, who partnered to co-build Strike Graph and Steve Singh, former Concur CEO, who is the co-founder and executive chairman of Stratify, a case study for this innovative new model.
This group of experienced operators and investors will be co-founding board members and advisors, partnering with founders to provide unique advantages in recruiting the team, closing initial customers, and raising capital. This is all part of our ongoing commitment, and obsessive focus, on building founder value and to make starting the day one journey with MVL the obvious choice for the most talented and ambitious founders.
Our journey of “building founder value” is similar to what a startup goes through to find product-market fit. For a startup studio, founders are the market and the value exchange is the product. This can be boiled down simply to what is the cost (equity) vs. what are the benefits (ideas, talent, experience, network, and capital). As founders ourselves, we often ask ourselves the question, would this equity to value tradeoff work for us, and if the answer is no, we keep iterating and improving it. The following represents key improvements to our founder value proposition over the past five years:
Validation Process. Our 100% operator-led team and former founders are not advisors, we are doers. We developed a repeatable, systematic process for vetting ideas and when we build conviction that an idea should become a company, we recruit a CEO with domain experience or “founder/idea fit”. We don’t build companies without founders. Together, we complete the validation process and co-author the investment memo -- driving alignment between us and our future investors -- before writing a line of code / building the product and serving customers.
Founder Ownership. We fundamentally believe founders should own the lion's share of the company at formation. There are several reasons why. For starters, they deserve it -- if the company achieves extraordinary success over the long-term, it will be due to their strong judgement, leadership, and resilience. In addition, higher founder equity attracts great founders and investors, who require they are incentivized for the long haul. We have been advocates for higher founder equity and increased it significantly over time.
Funding Access. For founders, having Madrona investors in your corner early in the process and access to their company and talent networks presents a competitive advantage. From the initial company formation, in our model founders raise seed funding within a few months vs. the average (non-studio built) startup takes 36 months to seed. We have honed our model to be efficient in “time to seed” to help founders reclaim years of their life back, reduce opportunity cost, and derisk making the leap to start a company.
When it comes to building founder value, we are just getting started, and we are proud of the journey thus far and believe there is no better place to start a company. Our next group of founders will benefit from: a 100% operator-led team with a proven company building process; successful operators as co-founders and partners; and funding and support from Madrona, the leading VC in the PNW.
If you are interested in learning more about MVL read our manifesto, because it really matters who you build your company with. Let’s begin the startup journey together!
We are with our founders from day one, for the long run.