NMotion Venture Studio 2021 cohort
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LINCOLN, Nebraska — On a break from Stanford University, Bumper founder Luke Moberly is back in the Cornhusker State; meeting with investors, attending local startup events and buoyed by about 7,000 app users and a half-million dollars in funding.
Luke Moberly, founder and CEO of Bumper
His startup — an investing app for teens — is one of NMotion Venture Studio’s early proof points: the first company from one of the Lincoln-based program’s cohorts to earn significant investment after completion.
And for Bumper, it took only nine months from idea to funding.
“Most accelerators, you have to go in with a startup idea and they help accelerate you,” Moberly said, contrasting his experience with NMotion’s 2021 venture studio, which saw his plan for a horseback riding app evolve into the Bumper investment tool. “But what’s unique about NMotion is that it’s more of an incubator, I’d say, where you’re coming up with all these different ideas and they select founders.”
“I was eventually able to land on something that had potential and that I enjoyed working on,” he continued. “But had I gone in with my initial idea, which was an equestrian performance analysis tool for horseback riders, I don’t think it would have done very well. And so they really push you to test a bunch of different ideas. That process alone was worth its weight in gold.”
Click here to read more about Bumper’s origins, its $500,000 pre-seed round and what helped prompt the pivot to teen investments.
The concept behind NMotion Venture Studio dovetails with Moberly’s experience, said Scott Henderson, managing principal and studio lead for NMotion. It’s about building a startup from scratch.
“A problem you have [with a traditional accelerator] is that the founders have already kind of built their assumptions,” he explained. “They’ve baked the cake and they’ve committed to a market. They’ve got technology. There’s a lot of sunk costs into it, that then blinds them to see the real opportunities.”
Scott Henderson, NMotion
Instead, the venture studio — part of NMotion powered by gener8tor — starts by laying the groundwork for founders to explore entirely new concepts during the 16-week program.
“We’re based on this thesis of category creation, which means look in the world and see where there are problems that people have overlooked or haven’t assembled those problems into a clear, distinct, shared problem,” Henderson said. “And really define the problem (and) define who’s in that market. Then go build a company that will be the first one to solve it and be the best one that solves it, so that you can basically be the category monarch.”
Each founder in the NMotion Venture Studio receives $100,000 in investment capital, he said. Half of the funds are raised by investors and half is matched by a state evergreen fund called Invest Nebraska, he added, noting key funders include Invest Nebraska, Nebraska Angels, and Nelnet are the state’s three largest agnostic early-stage investors.
“It requires a lot more hands-on intensive work, and you’re betting on a person, not a company. So there’s a much higher risk to it,” Henderson said.
NMotion closed applications for its third venture studio cohort in September. The program will run Oct. 20 to Feb. 23 for six selected founders.
“The output of the NMotion Venture Studio isn’t a fully formed product,” Henderson said. “It’s not a fully formed market. It’s not a fully-formed company. It truly does look like just a cocktail napkin drawing of a concept.”
Startup pitch at a 2021 NMotion Venture Studio event
Founders selected for the NMotion Venture Studio cohort face a rigorous first four weeks of the 16-week program, said Henderson, noting one-on-one coaching sessions, group workshops, and a quality-control session, where they pitch their ideas to the gener8tor staff and stakeholders to get feedback.
“We’re really pressure testing it, pushing back on it, asking questions,” he said. “And then they do that four times in a row, and then we step back. They’re learning each time how to do it better. But it’s not the same idea differently. It’s a whole different market.”
Once they decide which idea to pursue, founders spend the next eight weeks building traction.
“We do a lot of technology experiments and customer experiments,” Henderson said. “We’re just testing stuff out to see if it would work. And then we put a narrative together and we put a pitch together and an executive summary together with them.”
The building phase is also all about networking, he noted, with one-on-one mentor swarms, speed mentoring sessions, roundtable discussions locally and nationally, and community events.
“They’re meeting a lot of people to really increase their surface area of luck,” Henderson said. “We never know who’s in that person’s Rolodex or what knowledge or experience they had in their career that will help be of help to you. We’re just trying to find that one thing that they have that will help you break through or make that incremental step forward.”
In the last four weeks of the venture studio, founders pitch their ideas to investors. The program works to challenge founder assumptions — as early as possible — to help them avoid wasting time and energy, Henderson said.
“We’re putting in as much upfront as possible to pressure test their assumptions, pressure test the market,” he continued. “So they at least know: Do others who are in this business think there’s actually a path to a path to success? There are a lot of other potholes, mind fields, booby traps, sideswipes, and crosstown buses that are going to come. But at least they’ll know early on (that) they haven’t gotten so enamored with their solution that they forgot to ask, ‘Is there a problem? And is there somebody who wants to pay for that solution? And is that the right solution?’”
NMotion in motion
NMotion began about nine years ago in Lincoln, Nebraska, led by Brian Ardinger, as a traditional 12-week program investment accelerator.
After six cohorts — and the launch of companies like QuantifiedAg that sold to Merck Animal Health Sciences, Liveby that sold for $15 million, Nobl Health, and RealmFive — NMotion decided to pivot from investment to programming.
About three years ago, Madison, Wisconsin-based gener8tor took over the day-to-day operations of NMotion. Ultimately, gener8tor moved back toward the equity investment and venture studio models after looking at its existing portfolio and identifying its companies’ needs.
“[gener8tor] said, ‘Well, what if we go farther upstream?’ said Henderson.
The first NMotion Venture Studio cohort debuted in December 2020.
Founders in the venture studio concept receive 80 percent common stock equity (60 percent founder stock vested over four years and 20 percent key employee option pool).
“What’s different about the model is that we actually create the Delaware C Corporations before we select the founders,” Henderson explained. “And once we select the founders, then they become co-founders in that and they earn 80 percent of the equity over a four-year period. Now they become the CEO and the primary active founder responsible for allocation of budget and investing.”
NMotion Venture Studio has, to date, launched 10 startups: three are women-led, three are Black-led, and two are Hispanic-led, according to Henderson.
Luke Moberly, Bumper
Six of those 10 have raised follow-on funding for a collective total of $1.8 million. Of those six, four — Bumper, Snappy Workflow, Ensemble, and For Sure Fit — have received an $89,000 prototype grant from the state.
“Right now, we’re focused on monetization,” Moberly said of Bumper’s top priority. “We’ve been able to grow — for the most part organically — pretty well. I think right now it’s like 25 to 30 percent month over month, almost all organically, so that’s been great. We’ve seen that teens and parents are really interested in this idea of teen investing.”
The startup is also working with a beta group for paid services, he said.
“What we’re focused on is implementing different subscription tiers to try to figure out business models,” Moberly added.
Even though he’s finished with the program now, he said, NMotion’s support has been ongoing.
“I can text Scott whenever and he’s available to hop on a 15 to 20 minute Zoom call,” Moberly said. “Especially in the Nebraska ecosystem, there’s just so much continuous support after you raise a round and after you go through the program. Whenever I have a large issue that we’re facing, there’s always someone I can talk to and riff on.”
Scott Henderson, NMotion
‘Great trees never grow alone’
Nebraska’s business community understands the importance of boosting entrepreneurs, said Henderson, noting that backing has been crucial for NMotion to succeed and continue support of startups like Bumper.
“Just like Kansas City, for the last 15 years, we’ve seen a lot more technology startup investments and we’re starting to see exits,” he said. “And those founders understand the best thing they can do with a good chunk of their money they got from their exit is to reinvest it in the next wave.”
Business and economic development leaders who support NMotion know the best hope for growing the economy is investing in their own people, Henderson continued.
“These leaders understand if they can help encourage high growth and aspirational transformative entrepreneurs and help them succeed, it’s just going to make their businesses stronger because they’re gonna get more customers and they’re gonna get better talent to hire eventually,” he said.
It boils down to the fact that great trees never grow alone, Henderson said.
“If you want more vibrant forests, here on the plains, you’ve got to make sure that the forest is taking care of itself and making sure that it’s not just a single tree, but the entire forest can grow,” he added.
This story is possible thanks to support from the Ewing Marion Kauffman Foundation, a private, nonpartisan foundation that works together with communities in education and entrepreneurship to create uncommon solutions and empower people to shape their futures and be successful.
For more information, visit www.kauffman.org and connect at www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn
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NMotion Venture Studio 2021 cohort