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Mooney: Advice for startup founders

Guest post by Clayton Mooney.

As a founder, I’ve been guilty of taking any and all advice. That’s because many of us have a hard time filtering the good advice from the bad advice.

Why is that?

Maybe it’s simply because we don’t know what we don’t know.

If on day one you meet with a marketing firm, they’ll tell you that you need to have a social media strategy right away.

The same goes for law firms with company docs, accounting firms with bookkeeping, or even professors who tell you that if you share your idea with anyone else, they’ll probably steal it. 

“Be careful whose advice you buy, but be patient with those who supply it Advice is a form of nostalgia”

I’m only 6 years into building technology companies, but here are a few pieces of advice I wish I would have heard and adopted on day one.

1.) Have one metric to start with, that you can continually improve upon 

If you’re just starting out, maybe it’s the # of customer discovery interviews you’ve completed. If your assumptions from those interviews are starting to prove you right, and you’re now about to build your MVP (minimal viable product), your next metric can be # of days until MVP launched. If you’ve launched and you’ve circled back with those interviewees to get your product into their hands, your metric can become # of users. PS try to make those users pay, or charge for your prototypes. 

If that metric reaches # of revenue, or paid users, or units sold, congrats! Now figure out how to improve that metric by spending as much time as you possibly can, with your customers. 

At a recent demo day, when I’d hear a mention of metrics, they were more focused on # of newsletter subscribers, # of Facebook likes, and # of team members.

Don’t become trapped by a metric that doesn’t matter at this stage of your journey.

2.) How you form a company depends on what you want to accomplish with that company

When KinoSol was an idea and we were pitching at competitions, there was no entity. When we won a competition in Minnesota, it came with free legal services in setting up the entity. The founders agreed that we wanted people before profits. Minnesota recognizes Specific Benefit Corporations, so we became KinoSol SBC (a little different from companies who receive B Corp certification). To date, there have been no major hiccups, especially because we never planned to raise outside capital. The company’s taxes are almost identical to a c corp, and the cap table is 100% founders. 

Nebullam is a different story. We started as an Iowa LLC and went with a local attorney who has helped with many business formations. Our first mistakes were not clarifying that we were planning to raise venture capital, and how we wanted employees to have equity, and how we’d want to sell the company in the future. If you’re going to raise capital for your company, there’s a good chance professional investors will want to invest in a Delaware corp. If you’re raising capital from various locations and firms, you should find an attorney who has experience working with companies who are raising venture capital from various locations and firms. If you’re going after any state funding (i.e. POCR, Demonstration Fund), and you’re currently an LLC, but you expect to convert to a corporation in the future, understand tax trigger events. That realization was quite a hiccup for us.  

Figure out what type of company you want to have and reach out to someone who has been there and done that. Ask for an intro to their attorney. 

3.) Filters

If your mailman is offering fundraising advice, things may not line up. If someone who sold their company 20 years ago is offering fundraising advice, things may still not line up. 

When helping local accelerators, sometimes the best response to a question that we can give as a mentor is, “I don’t know.”

Begin questions with, “do you have experience in/with __________?”

Metric. What you want to accomplish with your company. Filter. 

Previous coverage

Mooney: Maybe there’s a better option for Iowa than a scout program? -Aug. 24, 2020

Clayton Mooney hits the ground running. And never stops. -March 21, 2017

Clayton Mooney is the co-founder of the Ames-based companies Kinosol and Nebullam and is a familiar face in the Iowa startup ecosystem.

Mooney: Advice for startup founders | 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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