Raising Money as a Student with Blake Faulkner

An interview with Blake Faulkner regarding his experience raising money from Dorm Room Fund, Rough Draft Ventures, and others as a student.
February 24, 2024
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Background

Blake Faulkner is the Co-Founder & CEO of Crewmate, which provides white-label embeddable communities for brands. Blake raised money as a student from pitch competitions, government grants, and venture capital funds. I talked with Blake about what fundraising tactics worked for him, the common fundraising pitfalls student founders encounter, and what he learned about raising money from different student venture funds.

Highlights

It’s important to note that Blake’s personal experience fundraising for his startup may not apply to student founders under different circumstances. If you’re a student considering raising money, I recommend visiting YC startup school, a free resource from Y Combinator, to learn the basics.

  • Blake used local pitch competitions and grants to build credibility and momentum before pitching student funds.

  • The value of student funds like Dorm Room Fund or Rough Draft Ventures is the potential access to the professional VCs on the team and the LPs. The value of local campus student funds is the longer-term relationships with the University and alums.

  • If you are a student at a school that receives relatively little venture allocation, you may need to make more progress on your startup before seeing demand from investors.

  • There are many common pitfalls when it comes to raising money. Student founders should educate themselves on who is investing in your ecosystem and their track record, process, and investment terms. You may need to look outside your local ecosystem to find founder-friendly investors.

Interview Transcription

Edited lightly for clarity.

Kieran: Thanks, Blake, for joining me today. To kick us off, do you want to introduce yourself?

Blake: Thanks for having me. I’m Blake Faulkner. I’m the CEO and Co-Founder of Crewmate. We build white-labeled embeddable communities for brands. I’m a recent graduate from Miami University in Ohio. So, I just moved from Cincinnati to San Francisco. I raised some money while in school to move out here and build a tech company. Now I’m working full-time on it.

Kieran: Awesome overview. I brought you on today to talk about your experience raising money as a student founder. I thought we could start by giving the audience more context. How much money have you raised? Who was it from? When did you raise that money?

Blake: I raised the money through various means at the end of my 3rd year and my 4th year. So, my current company, Crewmate, is backed by student VC firms Dorm Room Fund and Rough Draft Ventures. Rough Draft Ventures is a subsidiary of General Catalyst. We’re also funded by Soma Capital and Stonks. These different investments are tied to being a student or other connections I made through the organizations I’m a part of, such as Sigma Squared and Gen Z VCs. These organizations helped me get intros or referrals, and I did some wacky stuff like adding everyone at a firm on LinkedIn – it actually worked. We raised a little over $200,000 in college, which enabled me to graduate, then work on a startup full time and move out to San Francisco with my co-founder.

Kieran: What did you raise on? Was this on SAFEs?

Blake: All on SAFEs. What’s great is that some of the investments were through competitions, and we also got some grants. I won competitions at my school, which every student founder can do. Many schools have these pitch competitions that you can either submit yourself to or take a class for and win like $5,000 - $10,000. I did that when I was in college, and I also did a local government organization that allocated some capital to small businesses and fit that category. 

Kieran: Can you talk about the sequence in which you raised money?

Blake: So, with the grants, I won pitch competitions at my University, and then investors in the local ecosystem took notice. Sometimes, there is local media coverage when you win. For Cincinnati, there was Cincy Inno. They would cover whenever we won competitions or did the local accelerator at our school. That local coverage produced the local grants that we received. The competitions are pretty straightforward at school. You can excel if you’re serious about your business since you often compete against students who have just entered for a grade or class credit. Once we had some local success, we realized we could take this and go a little farther out of our small ecosystem in Cincinnati and move on to large competitions. We won the Midwest regional of the global student entrepreneurs awards, $1,000, and a flight to compete in Chicago for the national competition. There, we met someone backed by Dorm Room Fund (DRF) and thought that student VC firms were really cool. I ended up adding everyone on LinkedIn with no note attached. Tony from DRF reached out, and DRF was our first major check into the company. For Rough Draft Ventures (RDV), that was a pitch competition. We got the check from DRF and saw that RDV had this pitch competition in the Spring. We won the New York sector for a $25,000 investment at whatever terms we wanted. This was in the 2021 and 2022 days when a lot of funding was available at whatever terms you wanted to set for yourself because investors were desperate to get into the hotter deals. Then, we got into Soma Fellows. We had a bunch of referrals. That program was $100,000 uncapped, which is excellent for young founders because we didn’t have to worry about setting the valuation. The program mentored us on how to start a brand, fundraise, and then worry about setting the terms later. Stonks is also one of our investors, now called Sandhill Markets. They used to be a Demo Day platform, but now they are a secondary platform that sells shares in emerging companies. I think this is a display of where the markets moved -- from everything being hot and having a demo day platform to now selling secondaries in companies. I was at Draper University last Summer in San Mateo. I was lucky to get in and have wanted to attend ever since I watched a video when I was 13. We got to pitch and live in Silicon Valley while I was in college. So, I came out to Draper University, learned a ton of entrepreneurship, and met a ton of VCs and people in the ecosystem. We won their internal Demo Day, beat out roughly 60 companies from 24 countries, and pitched on Stonks. We had a two-minute pitch on Stonks that totaled $600,000 in perspective investment interest. Stonks then directly invested in us. That’s the breakdown of our four investors: Stonks, Soma Capital, DRF, and RDV.

Kieran: A fascinating insight is how you used the pitch competitions and grants early on to build credibility and momentum to snowball into raising money from student VCs, Soma Capital, and Stonks.

Kieran: What are the differences between pitching your company at local competitions and for grants versus pitching to student VCs? How is that process different?

Blake: It depends on the student VC you’re pitching. When I was in college, my team thought it would be a fantastic idea to do an entire venture round exclusively with student VCs across 10-20 different universities. That ended up being hard to do. We only closed funds from the top two student VCs, DRF and RDV. (Both have professional investors attached to them) and they allocate relatively large check sizes. DRF is $40,000+ and RDV is $100,000 - $150,000. Those funds are not for a specific University. They are collections of top university students who actually get to invest in companies and get mentored on how to be VCs. You’re coming in to be a student founder, and these folks are learning to be VCs. So, it’s a really interesting dynamic. However, there are a ton of student VCs that are just specific to one University. They may only be able to invest in the alums of that particular University. I was in a VC firm for four years called RedHawk Ventures at Miami University. That’s how many student VCs are, but DRF and RDV are outliers in that they are more focused on returns (and can invest in any student). I think DRF has invested in a few companies that are worth over a billion dollars. So, the student VC model works well if you put it in the context of professional students who want to be professional VCs and student founders who want to produce real ventures that scale. There are a lot of student venture programs that are like classes that a student will take, and during that class, they will allocate maybe a thousand bucks or one single $10,000 check to a company. So, if you’re a student founder, make sure you know what VC you’re going in front of. If it’s a student VC, ensure you understand their investment thesis before committing to putting together a deck or meeting with their team. Also, understand that when you’re working with student funds, sometimes they may not be interested in giving you a check – sometimes they may effectively take your time to use your need for funding as an educational opportunity for students. There is nothing bad on that from their end, but you, as a founder, it’s not the thing you should be prioritizing. Outside of fundraising, there are quality ways to engage with student VCs. We’re about to kick off a project with UCLA Ventures for go-to-market. UCLA Ventures is helping us tap into the founders and business leaders who might be able to use our product. I’m not a UCLA alum, so they are helping me access the UCLA network. With the grants, that’s a completely different process. I knew some people who were student founders at other universities across the US who had massive success with grants. I knew people who raised $700,000 through grants while in college. Many of those folks were doing more hardware, construction, and qualifying for the larger government or institutional grants. If you’re building B2B software, getting a grant will be more difficult. We were lucky there was a local organization, Main Street Ventures, that wanted to find a way to allocate money to student startups. They ran a pitch competition, Launch at Cincy, that I won when I was there. It was a cool program. They essentially allowed us to have the entire Summer paid to live and work in Cincinnati. At the end of the program, we got $10,000 to continue the business and scale it up. All of it was non-dilutive and from Main Street Ventures, which I think gets most of its money from local government distribution.

Kieran: How did you prepare to fundraise? What resources did you use? Did you have a mentor who helped guide you through that process, and how did you pick that person?

Blake: I think failure is the best teacher. We were working on a game developer marketplace at the time. When I started pitching VC funds, we had my background as a game developer and the metaverse tailwinds behind us, which was great. We pitched funds that we were definitely not ready to pitch. We were pitching to student VCs but also partner committees at big funds. I bombed those meetings when I was in college. I’d walk into the meeting and try to get an uncapped investment from those funds, and it was a mess. So, I learned how to value my company. It’s an important thing. What should you be asking for? How will the investor look at the raise you’re bringing them? If you want to raise only $100,000, you will probably get deferred to some other program if you try to connect with an investor whose normal check size is $500,000 - $2 million. Understanding what league you want to play in is super important, and finding a mentor that fits within is important. For us, pitching DRF was super easy since they had one check size at one specific valuation. That’s great if you’re a student founder because you don’t have to worry about negotiating a valuation or the check size. For us, it was $40,000 at X valuation, and that’s the deal they would give everyone. That was super helpful for us as the first check because we just had to focus on pitching our idea and our traction at the time. Some companies get investments from student VCs without a lot of traction. They just come in with an idea and go to a good school. I feel like we had to work a little harder because we weren’t coming from a target school that gets a lot of venture allocation. We had to craft a really crafted pitch and we refined the materials and pitch deck through those local competitions and conversations with grant organizations ahead of pitching the larger student VC funds, even pitching different tiers of student VC funds. Do your local campus pitch competition. If you win that, get feedback, then talk to local grant organizations. There are startup grant organizations in most major cities. Shoot them an email, ask them about their programs, and get feedback. Pitch the local student VC fund specifically for your college and campus and maybe only for your alums. Pitch your professors to get feedback. Share your ideas with classrooms full of ideas if you have a professor who will allow you to speak in front of the class. All of those are great ways to get feedback before you go to market and try to raise money from a DRF or RDV. They’re a little more serious since their LPs are all well-established angel investors or VC funds and the people you want to access over time.

Kieran: How much does going to a target university play into raising money?

Blake: I met a lot of students who go to target schools. They are going to Stanford and Berkeley. There’s an established alum and angel network. That’s something my school didn’t have. I also got lucky that I didn’t fall into the traps that many students building companies with a little bit of traction fall into. Many student founders will severely dilute themselves because an angel at their school invests $100,000 for 20% of the company. I met several founders who this happened to because there isn’t a lot of education available to them, especially if you are at a non-target school. Being from one of those schools that don’t have that education infrastructure, you immediately have to sidestep different pitfalls because if your startup gets in the local news, then some angel investor who’s an attorney or an accountant or something will reach out and want to invest. You have to ensure they understand what they are getting into and that they didn’t watch Shark Tank twice and want to invest in your business. Students don’t realize they’re completely removing the company from the ability to raise venture funding in the future because they just sold 30% of the company to some random guy who will probably not be very engaged. When I say non-target, it’s from the perspective of venture allocation. Many VC funds will run student programs for founders at specific Universities. Pear Ventures runs Pear Dorm and Pear Garage, explicitly targeting students from four schools. So, if you don’t go to these four schools, you will have to figure out how to make it work. You have to work harder on your PR and ensure you’re competing nationally by targeting pitch competitions with a larger presence from folks who work at VC funds and at programs at your school that give you exposure to VC. Don’t sell your company to a random alumni for a small amount of money. I probably saw that 100 times while I was in college. On the mentorship side, if you can find an alum or someone in your network who has raised some money and has a tech company, they could be a good resource for you. But, I’d also be cautious because they will advise on their exact circumstances, which may not always be relevant to you as a student. Suppose you’re talking to some entrepreneur who built a big microwave company, which is actually an example that I ran into. In that case, that person who created a big microwave company in the 80s probably doesn’t have the most know-how on fundraising in 2023. They probably won’t understand the current fundraising agreements. So, if you go to them for help on understanding a SAFE or when talking about valuations, you also run into that problem. Also, local angel networks for different cities will differ in quality, which I ran into as a student founder. The angel network from where I’m from versus Silicon Valley will have very different approaches to how they educate their ecosystem. If you’re a student founder, work to find a way to get to NY or SF so you can be in a place where you educate yourself, see what top-of-market terms are for startups, see what accelerators exist, and don’t get overly absorbed and dependent on your local ecosystem. 9/10 times, that will be a very biased ecosystem for you. I recommend getting a mentor 1-2 years ahead of you, not 30 years.

Kieran: What tactics worked for you when fundraising as a student? You’ve mentioned the LinkedIn thing with DRF, and pitch competitions and grants snowballing to student-led VC firms.

Blake: I did not believe that adding 50 people at DRF on LinkedIn with no note attached would lead to someone reaching out and ultimately an investment. That may work for the average student. But, I also think that worked because I was very tactical about our PR. When I added everyone at DRF, I had everything about what I was doing on my profile. Some student founders are very reserved and hesitant to publicly discuss what they are building—some want to be in stealth mode. I don’t think that’s very helpful. When you’re a student, you need as much help as people are willing to offer you. Not telling the world what you’re working on is a really good way not to get any help from anybody. Also, to not get any recognition for accomplishments that you produce or cool things you’re doing. I think the DRF thing worked because I had the audacity to add 50 people on LinkedIn and was public about what I was doing. So, when Tony saw my LinkedIn request, he looked at my entire account and saw I was doing several posts on game development and the company I was working on then. I think that moved me from “Hey, this is a random person adding me on LinkedIn to this person who should be in our pipeline and doing something interesting.” So, I think it was a combination of both; the audacity to reach out to people and being public about what I was working on allowed them to take the next step. For the pitch competitions, I knew about them because I spent an unhealthy amount of time online following VC funds and different entrepreneurs who would repost content about these competitions, so I was always in the know. So, tapping into that more extensive network makes you aware of what competitions are going on and who is winning what. If someone in your network who is a student founder wins a competition and you see their post on LinkedIn, don’t take that as someone just bragging. Take that as, there’s a new competition I know about and can prepare for next year. So start understanding which competitions exist in the ecosystem and which you can take advantage of.

Kieran: What was the perceived value add of student VC funds, and how have they helped you?

Blake: Student VC firms differ in quality, like I mentioned. The DRF and RDV are serious VC funds. RDV is General Catalyst’s student VC fund, and DRF used to be First Round Capital’s student arm. Now, they are an independent fund. The value of a DRF or RDV is that real VCs are involved as mentors or LPs in the fund. Since RDV’s LP is General Catalyst, I now have access to folks at General Catalyst that I may not have otherwise had as a student founder. DRF has 100s of LPs, including every major Pre-Seed and Seed fund and angels like Marc Andreessen and others. You now have a way to meet those people or get an intro. That’s the value – the connections are insane. They also run education programs. RDV ran RDV University, which allowed student founders to stay in New York for a summer to work on their business. So once you’re in their portfolio, you get access to all these different educational resources that aren’t available to the typical student founder. So, that’s super relevant to the top 1% of student VC firms. There are also a lot of student VCs that are campus-specific. The benefits from those will be different. DRF and RDV invest with the expectation that you scale the company and take on more funding – their terms will align with the Silicon Valley terms given to startups. Some student VCs are campus-specific. You’re going to have many students who are investors who probably don’t understand anything about venture. So, that’s going to be something you’ll have to navigate as a student founder. While DRF is $40,000 for 1%, the local student fund may try to convince you to take $10,000 for 10% of your company. A different dynamic exists, and there are more pitfalls to be aware of. The true benefit of local student funds is that you’ll have a longer-term relationship with your University and alums. It offers a little credibility and makes it easier to sell into or get connections to the network of alums.

Kieran: What’s the most important takeaway for student founders getting ready to raise themselves?

Blake: Educate yourself. Don’t think that you’re just going to be able to walk into a VC fund and raise a ton of money. Educate yourself on what pitch competitions exist, what VC funds invest exclusively in students, and understand what terms are market and not market. I highly recommend YC startup school to learn about building a company, launching a product, and building something customers want. On the VC end, if your school offers a VCIC program, do that. It’s the national venture investment competition for competing and learning about venture capital. You have the opportunity to role-play as a VC for a semester. You work with real entrepreneurs and try to invest fake money into their companies. It’s a great experience. I was lucky that my school had one of those programs. I think roughly 50-60 schools have it. I learned a ton of venture and terms by doing that program. It made me a better founder when I went to raise money because I understood what was market and didn’t fall into the pitfalls that student founders fall into. Educate yourself on what pitch competitions exist, what VCs are investing in students, and what your larger ecosystem is doing to support small businesses and up-and-coming startups.

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