VC Minute
VC Minute
253. From Consulting To Startup, Painfully, feat. Sunny Han, Founder & CEO of Fulcrum
Text your thoughts directly to Rich.
Starting out as a consulting business was a great way to learn what customers wanted, but caused problems as the other founders didn't want to give up the consulting work.
About Fulcrum
Fulcrum applies modern technology to manufacturing processes, helping makers focus on their craft and grow their businesses. The innovation of American manufacturers is critical to a better world, and Fulcrum aims to revitalize the industry with automation software.
About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)
About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.
The history of the company is that me and my co founder, my original co founder, Trevor who was an employee at Google, a brilliant engineer, and my other founder, Sean who was a government contractor, also a brilliant engineer, the three of us started our company named Atlas as a consulting firm with the aim to build a product. So for us, we didn't want to raise a pre seed round and have folks try to help us figure out what product to build. We We didn't really want to pull the trigger on venture capital until we really knew that there was a need and an idea and some proof of concept. And so our idea was well, if we can get people to pay us to build something custom, it might not really be what a product is, but it'll teach us a lot. And that actually proved to be really valuable. It proved to be really damaging. We scaled up the consulting firm to be fairly large, and there was a lot of evidence that consulting firm itself could have been really profitable. There were many different industries we looked at. We looked at architecture and engineering. We looked at tourism. We looked at manufacturing. And at the end of the day, we had a difference of opinion. One of us, wanted to work in architecture and engineering. I thought the vision for manufacturing was a lot more compelling. And another one of us really just believed that building a really profitable consulting firm would be a really good use of our time. And so actually, before we even met springtime. I worked with another firm much earlier stage, we had very little product, just a core team and an idea for building manufacturing vertical SaaS product. And we had a much smaller round kind of fleshed out. We didn't talk to very many people. We talked to like maybe five or six VCs, and found one that really believed in what we're doing. But actually when they came to visit us in Minneapolis and they talked to us, they really found out very obviously that we were not aligned in what we were going to do with the company, and that was enough to blow the deal up. So I think that experience was really jarring for me in a lot of ways. It made me realize that I wasn't taking this seriously. Building a business serious enough? I know that sounds really strange, but the feeling I had was like being a child. Like I could sneak something by, or we'll make it work out. Or we just need the funding and everything else will take care of itself. But I think it was the right choice. I think that had that firm actually invested in us, it would have been a disaster for them and for us altogether. But actually that fleshed out some conversations. Like,"Hey man, if you're not on board with this, we need to get you on board, or we need to go our separate ways," and we ended up going our separate ways. Having that deal fall through actually was really valuable in clarifying the company. Now, a lot of pain and suffering came from that. Breaking up a friendship, and I haven't talked to one of those two guys for for five years now, there's a lot of pain and suffering that goes along with that. But it caused me to really increase my focus on what am I trying to do. I'm trying to take other people's dollars and create something useful. Neither of those things are casual. Both of those things require a lot of focus, a lot of attention, a lot of sacrifice. And it made me personally really decide, do I want to make the sacrifices and put in the effort to do this for real? The answer was yes. As alarming as it might sound to investors it took an event like that to really clarify things for me.
