#10 May 2023: Fund II Closed

Your monthly filter for economic data & insights that matter.

A Note From the Scale Team

๐Ÿš€ Exciting news from Scale VC; we closed a $5M Fund II to support over 30 startups and build a few ourselves! [Share the love here] Over the past 22 months, we've had an insanely fun journey building Scale, full of learning and incredible experiences. The best part, though, has been the fantastic people we've met along the way. Despite the environment, we're doubling down on early-stage founders who thrive in downturns and build with first principles. In fact, we invested in six companies this quarter and kicked off our Spring 2023 batch on May 1st [stay tuned for the companies].

Scale VC invests monetary ($50k-$150k) and social capital in early-stage tech founders. Weโ€™re excited to bring you monthly updates about Scale, tech, and economics. - We've filtered thousands of sources, so you don't have to. Enjoy๐Ÿฅ‚

โ€œIn life, but especially when it comes to business, understand that the lows aren't typically as low as you think they areโ€”and the highs aren't as high either. It is important to stay steady and constant throughout it all, and it tends to work out for us that way.โ€

Lori Coulter, Co-Founder of Summersalt and Advisor at Scale VC
๐Ÿ‰ Meet the Scale Team and Mentors | ๐Ÿ† Scale Portfolio

๐Ÿฆธ๐Ÿฝ Become a Scale VC Mentor or Apply for an investment

๐Ÿ˜Ž Join our talent network for founding team opportunities

Back at it again with the failed banks. First Republic Bank is the second-largest bank to fail, bringing total failed bank AUM above $500B in 2023. ๐Ÿ”ฅ Hot take ๐Ÿ”ฅ First Republic Bank won't be the last failed bank headline we see this year. ๐Ÿ‘€

๐Ÿ“ˆ Macro Trend Report

๐Ÿ’ฐ Micro Economics

๐ŸŽ‰ A HUGE congratulations to our friends at EquipmentShare as they announced their $290M Series E funding and $750M bond offering, raising a total of $1.04B this month. Even more exciting is that they accomplished this by sticking to first principles and their founder-led scaling process.

  • The University of Missouri partners with Scale VC to start an on-campus accelerator supported by unicorn founders as well as leads an anchor investment in Scale VC's Fund II.

  • Is the St. Louis tech community back on the growth trend since it flat-lined from the pandemic? It sure seems like it after STL Tech Week, where over 5k founders and investors came together to support the community, including big names like the founder of Square and World Wide Technology [shoutout to Emily Hemingway for an excellent job]. They're also 16th in the country for talent migration and attracting companies like Scale.ai and other defense tech companies housed in the new Globe Building, which has the largest SCIF in the US.

  • This Houston company is building rocket engines, but they aren't for rockets; they're for passenger airplanes. Supersonic, commercial flight might be closer than we think, and we love to dream about how many people might come to the Midwest if they could get anywhere in an hour...

  • 2023 has been an excellent year for entering the broader public markets, as investors are seeing record returns on an annualized basis. That said, Missouri stocks have taken a hit this year but are bouncing back after a good month in April.

Tired of your calendar tools? Our friends built the Calendar.com Chrome extension that our team uses to schedule 100+ meetings a month ๐Ÿ’ช๐Ÿผ

๐Ÿ’ฐ Midwest Deals

  • Robotic sprinkler system Irrigreen announced a $15M seed raise for their Minnesota-based company to make watering your lawn more efficient and eco-friendly.

  • DeepHow, the Michigan-based AI company that turns technical know-how into smart, how-to training videos, has closed $14M in Series A funding

  • Chicago-based Bixby announced a $5.5M Series A raise to develop their credit and loan information platform

  • Another Chicago-based company raising $5.5M, Aqua, announced seed funding to bring their plant-based seafood products to market.

  • SentiAR, an augmented reality technology company bringing holographic 3D modeling of surgical procedures to physicians, based in St. Louis announced an $8.5M Series B.

  • Check out all 66 deals we tracked here for $825M total!

๐Ÿ„ Midwest vs. National Macro Trends

  • Unemployment in Missouri remains low at 2.5%, well below the national average of 3.5% and the Midwestern average of 3.5% โœ…

  • Thanks to decreasing gasoline prices, the Midwest Consumer Price Index dropped to 4.9% but neared the national rate of 5.0% for the first time in monthsโœ…

๐Ÿง  This Month's Recommendations

๐Ÿ“š What Weโ€™re Reading

๐ŸŽง What Weโ€™re Listening To

๐Ÿ“… What Weโ€™re Doing

  • Chicago Venture Summit is coming; and this year the theme is food. If you know food innovators or investors, they're the only ones who get to go. 5/3-4. 

  • Women's Entrepreneurship Week (WeWmke) is bringing female entrepreneurs in Milwaukee together to celebrate their contributions to the city. 5/8-12.

  • ScaleUp, 1871's signature event to help you learn to grow and lead a company in today's rapidly changing tech ecosystem, returns for a jam-packed day of programming. 5/10

  • Midcontinent Venture Summit hosted by our friends at Cortado Ventures, gathering of founders, innovators, investors, and business leaders across the region. 5/10

๐ŸŽฎ Midwest Tech of the Month

Everyone loves sushi, right? ๐Ÿฃ Aqua Cultured Foods, based in Chicago, has developed the first whole-muscle cut sushi-quality seafood alternatives created using microbial fermentation. Are cultured meats the future of culinary arts?

๐Ÿš€ Scale Portfolio Company Highlight of the Month

HoundDog is one of the fastest-growing Scale VC portfolio companies, serving over 500 businesses and thousands of contractors. They automate insurance verification and tracking for contractors' P&C insurance. This allows brokers to kick back and relax while they receive automated real-time client data and companies to lose the insurance tracking and verification spreadsheets.

๐Ÿ› ๏ธ Resources

  • A guide to understanding how Y-Combinator views business models ๐Ÿ“–

  • Map out your product economics to entire business valuation in one spreadsheet ๐Ÿงฎ

  • 25 investor directories that consolidate all the circulating investor directories, but if you don't like that one, here's another ๐Ÿ’ฐ

  • Check out newly launched Scale VC Mentor Network with 100+ mentors ๐Ÿฆธ๐Ÿฝ

  • Resource page for founders we made here ๐Ÿ“’

๐Ÿค Collaborate with funds & founders in our Flyover Tech community

Keep up with our Medium content here ๐Ÿ”–

 ๐Ÿ’ผ Scale job openings --> here