Indie.vc Q3 Update

We just wrapped up our 3rd Indie.vc quartlerly retreat in Los Angeles last week so I’m thinking now is as good a time as any for a quick update.

Of the 8 participating companies all of them are still alive. 4 of them have double their revenue or, in a few cases, significantly more than doubled revenue, since we kicked off the program 9 months ago. 

A few of them are solidly in the black. A few are within striking distance. And a few are still struggling to find product market fit. When we were asked early one how we would measure whether we were on to something our answer was getting half of the companies to market salary profitable. We’re not there yet, but can see a path to it.

We’ve provided follow on capital to one of the profitable companies, Fohr Card, to accelerate a few of their hires and anticipate doing the same for others who don’t need, but could benefit from, some additional funding. 

Most of the teams grew headcount over the last 9 months. And most have moved into their own dedicated offices.

One element of the experiment has been that companies bloom where they’re planted which means we’ve only been in the same room together 3 times. Even tho we do bi-weekly group calls it felt like the teams started to gel in a different way this time. The retreats tend to be fairly tightly structured for two days. Half of each day is dedicated to getting updates on from teams on highs and lows they’ve experienced and revenue reporting for the prior quarter. The remaining time is a combination of office hours with local practitioners and talks from bootstrapped or relevant founders. The first night we have dinner as just our little group, the second is with local founders and people of interest, the last night is an activity (hello Disneyland!).

We have one more retreat planned with our first cohort of companies. Some of the founders would like the retreats to continue. I think I would too. It feels like we’re starting to get somewhere together.

We have closed a signifcant portion of our new fund which will allow us to continue to iterate on the Indie.vc experiment. I plan to write some release notes prior to rolling out v. 2. No date is set but if you’re intrigued, or want to be involved, get in touch.

Prior to our retreat, I attended the VC/LP day of the Upfront Summit. It was a great event, well executed and packed with some of the brightest minds from both sides of the VC business. Given the audience, it was a day filled with panels and speakers entirely focused on the business of raising and deploying money. There was clearly a change in the air as markets cool and fundraising is no longer the durable business model it once was. But even as talk turned to unit economics and solid underlying business fundamentals, the end goal in most of these conversations still pointed to a funding event that would bring in more dollars at ever higher valuation. Fundable milestones still won the day.

At our retreat, there weren’t any discussions about fundraising. Throughout our weekend we didn’t have any sessions on honing the perfect VC pitch or how to raise in a difficult market. Instead, we shared stories of success and struggles as the participating companies focus their attention and resources on growing revenue and attracting/serving customers. The end goal being to build a durable and impactful business that controls its own destiny, not to simply attract the next round of investment. Or, as my partner Tim says:

You should regard money as fuel for what you really want to do, not as a goal in and of itself. Money is like gas in the car — you need to pay attention or you’ll end up on the side of the road — but a well-lived life is not a tour of gas stations!

My takeaway from our retreat, and from the Indie.vc experiment thus far, is that building a business is really really hard. Our Indie.vc companies face the same challenges and opportunities that our VC funded companies do. It does not feel like they are disadvantaged in building their businesses because they’re not jumping on the traditional VC funding path.

With today’s headlines coming from the startup press, maybe, just maybe, a journey funded by the renewable resource of customer revenue may become even more attractive than riding upon the backs of fantastically funded VC unicorns.