Funding seminar: Why Impellent Ventures backed Kickfurther

Buffalo Inno aims to connect an increasingly vibrant startup economy to a variety of new actors – from rising young professionals based here to expats to outside investors.

With that in mind, we are launching a series of columns penned by outside contributors, with each columnist-in-residence getting a half-year to tell their story, muse about doing business and to impart the lessons they are learning in real-time.

The first of those columnists is David Brown, managing partner of Impellent Ventures, a Rochester-based venture capital firm with a growing portfolio of startups in Buffalo. Read his first column here.

The average venture capital-startup partnership lasts roughly seven years, equivalent to the length of the average American marriage.  Considering the duration of this tenure, we take all potential investment commitments very seriously. Unlike a bad employee where you can separate quickly, unwinding an investment or a founding team is incredibly difficult. 

All this to say, not all investment decisions are made the first time we meet a company. In fact, sometimes our founder dating can last months or even the better part of a year before we pull the trigger. This is not because we are looking to send founders through umpteenth hurdles to get cash… on the contrary we believe that most investment capital in WNY moves too slowly and is subject to too much diligence. Instead, it is because as we get to know a startup, it often takes time to find out if a founding team can do what they say they can.

This was the case with Kickfurther and Sean De Clercq.  We were originally introduced to Kickfurther through a 43North startup fair in the fall of 2019 but didn’t invest until May 2020.  The initial take was that they had a creative model and were showing strong early traction. However, we didn’t hear from their team for a bit as they focused in on product development, and it wasn’t until Patrick O’Connor of 3AM Innovations reconnected us in early 2020 that we really dove into the potential.

That said, when we finally did reconnect with Sean, the relationship got serious quickly.  To understand why, it’s important to note that we are incredibly founder centric. We fundamentally believe that every business is wrong and that companies only ultimately succeed because good founders realize (a) they are building a business in service of their customer and can identify the assumptions/ proof points they need to solve their customers’ biggest needs, and (b) they can build a truly world-class team around themselves on this mission. When we finally sat down with Sean, it was clear that he had addressed these two points in droves.

On being customer centric, Sean was rabid. He knew the pain point he was trying to resolve because his family business and his own reselling business were hitting choke points because of the cost of capital. Sean proved early that not only did he know what his customer was going through, but he wasn’t letting his own bias limit ways of resolving that issue. Sean is number driven and both his modeling and customer tests showed us that he was willing to try many small experiments in parallel so he could ultimately figure out what would scale the quickest.  He lets the numbers help guide solutions. In fact, one of the core secrets of Kickfurther is that they have developed a proprietary way to assess customer risk that better allows them to value and fund their clients than any other firm … measurement and a deep understanding of the customer issue set is core to this ability.

On team, Sean knows how to attract great people. Even when the team was young, he had unbelievable mentors. Folks like John Donovan, a co-founder of Lending Club, hitched their hats to Sean as board members early, while expressing strong desire during our diligence discussions to get more deeply involved. On top of that, world-class investors like Bill Tai and Tim Draper had bought in early and were continually willing to continue their support of Sean as he figured out the market and strategy, even when it was tough. However, even more important than these folks, it was clear that Sean was building a culture that employees wanted to be part of. Whether in Boulder, where Kickfurther started, or here in WNY, we found that their employees had longer tenures than the average in startups with a high brand loyalty. Team mattered and was supported throughout the ranks. This cultural vision and execution continues to be one of Kickfurther’s most captivating features and is why they can attract world class talent today as they expand. Their new CTO Scott McKay and new investor/ board member Tom Golisano (both world-class), agreed to be part of this journey partially because of the mission of the company, but largely because of this sense of culture and vision Sean is cultivating.

Lastly, we invested in Kickfurther because they had built a model to scale. Before our round, Kickfurther had a habit of taking $1-2M rounds with 12-month runways. This was enough opportunity to prove incremental growth but not enough for the team to really hunker down and focus on growth. As we looked at their numbers, it was clear that they had proven the basis of solid product-market fit: good customer acquisition cost to life time value ratios (CAC-LTV), good marketing channel costing analysis, quick sale through of new offerings, solid customer support systems established, and more. Therefore, when Impellent became convinced there was something unique here, we immediately started discussing with Sean the potential to go bigger and to bring in additional capital to augment the round. To really become a market leader Kickfurther had to strengthen their technology for scale and to double down on spend in core acquisition channels, both of which required more fuel for the fire. We provided handfuls of introductions to our top investment partners around the country, which ultimately culminated with our good friends at GrandOaks, the investment arm for Tom Golisano’s family office, coming in big and providing the Kickfurther team with more cash to go primetime.

Ultimately, Kickfurther’s success will be the result of the team’s hard work and endless tinkering, the culture they’ve developed, and a laser focus on solving a real customer problem. We’re excited to pair up with Sean and his team to accelerate their growth and are looking forward to the long partnership ahead. They built the foundation and now have the funding they need to take it to the next level.

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