Reflection after our first follow-on financing
Petnet (one of our early portfolio companies) just announced their next round of major financing. Some of our favorite investors participated and we’re thrilled for the first 10k units of the SmartFeeder to get into the hands of pet lovers around the world. Working with Carlos, Dustin, Chris and the rest of the Petnet team has been a great experience and a model for how collaboration with Bolt can have high-impact outcomes (see my other blog post on Petnet).
With this news, I find it helpful to reflect on what we’ve learned from our first 6 months and how we can better define Bolt. Here’s what we’ve learned:
Accelerator programs usually focus on early stage startups that have yet to raise any capital. Their programs are short (~3 months) and help you refine your pitch, find your product market fit, and raise your first round of capital. This model works well for software startups who can iterate quickly and cheaply.
But hardware is different. Hardware startups with $2M of funding often run into the same problems as hardware startups living off ramen and working out of Starbucks. Getting through your first production run and figuring out how to scale is still exceptionally difficult. These problems don’t end with a successful seed round; hardware takes significant development, planning, time and experience to get right.
We recognize this and that’s why Bolt has been attracting later-stage startups. Our first round included a company that had previously been through an accelerator and another that had already raised a seed round. We also recently made our 8th investment in Sage Devices (started by Mike Phillips who had previously sold SpeechWorks and Vlingo) after they were backed by two top-tier VCs. Even if you’ve already raised outside capital, Bolt is still likely to be a great fit.
I’m exceptionally appreciative of the extreme generosity of our angel investors and mentors. Their wisdom and dedication are directly responsible for the early success of our portfolio companies. I’m privileged to work with some of the best angel investors, many of whom are successful hardware entrepreneurs themselves.
But Bolt isn’t “mentor powered”. The vast majority of our value comes from our core team: experts in product design, engineering, venture capital, and manufacturing that are in our space full-time and are directly incentivized to see our companies build great products and successful businesses. While a good mentor may spend 2-3 hours per week with a company, our team spends every single day with startups iterating on design, helping interview early hires, setting them up for a strong financing and scaling their company to reach it’s potential. We have fantastic mentors too, but being in the trenches with our companies has proven to be the single most valuable thing for the founders thus far.
Our portfolio currently has: two companies that came to Bolt with significant revenue, one that’s still working on building an MVP, one that just signed a huge contract with their first customer, and a few that will raise significant seed/series A rounds in the next few months. Forcing this range of companies through a carefully planned curriculum would not be productive.
At Bolt there’s no standardized financing strategy, no formula for creating a killer slide deck, and no plug-and-chug operational plan. This drives a few features of how we work:
- Timing — We don’t work on a standard timeline. Companies can come at a few different times per year. We commit a minimum of 6 months of our full-time support/space, but it’s possible to stay longer if need be.
- Capital — Companies of varying stage/size need different amounts of capital. While we can’t lead multi-million dollar series A rounds, we’re happy to have a discussion about your specific capital needs.
- Equity — Like many investors, we have a target ownership that’s a non-trivial calculation based on size/stage/type/value/etc, but just as the capital is slightly variable, so is the equity.
- Demo Day — We don’t do one. A demo with an ask at the end is largely a distraction for most companies. When you’re ready to raise money, we’re here to help.
While this is more work for our staff and partners, it means companies of a wide range of stages and sizes can get support that’s genuinely useful. Before assuming you’re too far or not far enough to work with us, drop us a note.
New Pitch Process
So what is Bolt? Bolt is a hardware-focused venture capital fund that’s extremely hands-on. While we invest capital, the vast majority of our value comes from seasoned experts spending time with you day-to-day to build a professional-quality product and a business that’s set up for success.
Ben Einstein was one of the founders of Bolt. You can find him on LinkedIn.
Bolt invests at the intersection of the digital and physical world.