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Clayton Mooney’s 2019 Forecast

For me, 2018 has been a year of realizing more efficient ways to build a technology startup. But those realizations only started to occur when I thought critically about startup ecosystems playing not only to their strengths, but also being transparent about their weaknesses.

Below is a set of recaps, lessons learned, and resources which have helped guide me through being an Ames startup founder who is both proud and critical of their growing startup ecosystem.

2. Initiatives in 2018 (strength)

With President Wintersteen’s campus-wide support for entrepreneurship, you now have more Iowa State University students and faculty talking about problem solving and beginning to start businesses, as well as finding work opportunities with local startups.

From the Agricultural Entrepreneurship Initiative’s (AgEI) new program, Changemaker Academy, to the Pappajohn Center for Entrepreneurship expanding its team to include Tom Swartwood, more individuals are helping to encourage entrepreneurial activity in Ames.

Startup Ames provided ample amounts of meetup opportunities throughout the year, as well as new insight and collaborations within the arts community. The organizers have the right idea for this integral component of a startup ecosystem. If we are to recruit new team members for our startups, and expect them to move to Ames, we need to offer a vibrant arts scene, capable of celebrating all variations of artists.

Startup Factory welcomed Cohort IV and V to its 52-week program, and Cohort VI will kick off in January. The technologies coming into Startup Factory continue to inspire me. It’s exciting to see many academics and scientists begin to shape their applications into products and services, and to go in search of business model help.

Let’s continue to bring in new faces and new events.

2. Technology Startup Investment (weakness)

There are a handful of technology startup angel investors who plug into the initiatives listed above. Ag Startup Engine has been a leading supporter in early stage ag and food technology startups. But that’s essentially it for funding opportunities for technology startups, pre-series A, in Ames.

With so many initiatives helping individuals to launch startups from Ames, there is a major lack of funding for these startups.

Earlier this year, we set out to raise our 2nd round of investment for Nebullam. The first mistake I made was not solely focusing on fundraising. The second mistake I made was meeting with more traditional investors (real estate instead of technology startups). There were many other mistakes made during our fundraising process (which only just successfully closed on October 31). Some of them are mentioned briefly below:

  • Fundraising cannot be a metric. If it’s a necessity for your company to raise capital, the CEO needs to execute, and then get back to work on what matters—likely team building and customers
  • Knowing how local investors invest. We originally set out to raise capital via Simple Agreement for Future Equity (SAFE), to which few investors in the region were familiar with or accustomed to. We then moved onto Convertible Notes, to which some investors in the region were familiar with or accustomed to. These experiences led me to realize founders and investors need to help educate each other on new investment frameworks and expectations
  • Only meeting with professional technology startup investors. This was a tough pill to swallow, as my pride for wanting to raise our investment round locally, drastically slowed our process. This realization forced me to make 3 trips to Silicon Valley throughout 2018 for us to close our round
  • Understanding Expected Value (EV) of state and federal funding opportunities. While I’ve historically been supportive of startups pursuing state and federal funding, I believe the EV from going after state and federal funding may become too low for the average Ames-based startup to pursue. Going elsewhere (elsewhere likely being to the coast and VCs) may allow for more efficient timelines and processes for fundraising
  • Timelines. We made the mistake of sharing our timelines for the investment round, instead of asking the investors for their timelines in making a yes or no decision. It took us being in due diligence for months with certain investors, before we finally realized we were being milked for every piece of information
  • It only takes 1. I’m happy to share that contact was made with 327 investors before we were able to close this round of investment. Our 3rd and final investor in this round was #320. Sometimes the sample size and timeline required are longer than expected. Keep building

To improve Ames’ chances at strengthening early stage startup investment, there needs to be at least 1-2 more successful startup company exits in the coming 18-24 months. The best-case scenario would be for a local startup to be acquired, and its founding team to turn into local angel investors.

Another option would be for a micro fund to be established, with set terms and investment targets ranging from friends and family rounds, to pre-seed/angel rounds, for technology startups which go through CYstarters or Startup Factory.

A last suggestion would be to establish a Scout Program, like Spearhead ( Founders backing founders. A VC helps create a fund, which then equips founders with full check writing authority, to go and invest in their most promising peers’ startups. Founders benefit from the mentoring of the VC firm, as well as having skin in the game on the fund’s portfolio. VCs benefit from founders finding the earliest possible deal flow, in new locations.

I have a feeling 1 of these options will come to fruition in 2019, in Ames.

3. Resources (you decide on their value)

I believe any full-time founder should be a community builder. One of the easiest ways for me to give back is to share podcasts and blogs I enjoy and gain value from, and to gift books.

Podcasts which can help founders at an early stage include How I Built This and Masters of Scale.

Podcasts which can help founders while they’re raising their first round of investment and team building include The Twenty Minute VC, Angel (Jason Calacanis), and Acquired (especially the LP Bonus Show).

The books I’ve gifted most this year are:

  • Not Fade Away: A Short Life Well Lived (Barton)
  • The Obstacle is the Way (Holiday)
  • The Messy Middle (Belsky)
  • The Hard Thing About Hard Things (Horowitz)

The one blog I’ve shared most this year is from Paul Graham, 2009: Maker’s Schedule, Manager’s Schedule ( I wish I would have read it and understood it 4 years ago, when my startup journey began.

Closing Hope for Ames in 2019

Don’t play startup,
Just do.
Launch your ugly prototype
It’ll get you through,
To who matters most;
Your customers,
Your users,
Maybe investors on the coast.

Don’t celebrate fundraising,
More than sales.
Otherwise you’ll end up with
One too many fails.

Build and build,
Grind it out.
Now go where is best for your company,
You’ll figure it out.

Clayton Mooney's 2019 Forecast | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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