Dr. Scott Shane is an atypical early-stage investor.
His path into venture capital came after years of academic research in the field of entrepreneurship. In the late 1990s, Scott was teaching as an assistant professor at MIT at the Sloan School. During this time, he was looking for a way to make a more meaningful connection with students in his field of study.
“I thought to myself, I should invest in a startup, right? Then I would have more credibility with the students. So I did that. And, I even got lucky at first,” says Scott.
Now several decades later, Scott is a Professor of Entrepreneurial Studies at Case Western Reserve University and Managing Director of Comeback Capital, a pre-seed stage venture capital fund investing in startups across the Midwest.
On May 24, Scott will host pitch practice and office hours events for Founders Network members to advise pre-seed founders on keys for startup growth success. Here’s a sneak peek at his insights.
To learn more about startup growth, see if you qualify for membership to join Founders Network.
A Focus On Pre-Seed Funding
Scott is an accomplished academic and investor with a keen eye for identifying promising startups. As an academic, he is the author of 95 scholarly articles and 15 books. As an investor, Scott is an active angel and limited partner at the Iconyc, Acceleprise, and gener8tor accelerator funds. While his accomplishments are impressive, Scott points out that his unique experience helps him land an extra edge when it comes to investing.
“The lens that makes me a little different than other people is that I’ve done research on entrepreneurship. I’m teaching on the topic, and I am also investing practically at the same time,” shares Scott.
Scott brings this unique approach to Comeback Capital where he focuses on pre-seed investments in cities where venture capital is harder to come across.
“We invest exclusively in companies that are not in Silicon Valley, San Francisco, New York City, or Boston where 75% of the venture capital is,” says Scott.
In addition to the firm’s geographic focus, the company stays curious to test and support founders who are innovating in different ways from other startups.
“Everybody’s looking for somebody who’s grown 5x year-over-year with a complete team of people with all these really good credentials. We’re looking at something different. Everybody is going to be missing something. And from my perspective, I think, ‘Are you missing something I could fix?’,” says Scott.
Comeback Capital is focused on finding founders for whom the answer is ‘yes’.
The Secret To Success
Scott has built a strong reputation as a seasoned investor in the tech industry. His deep understanding of market trends and strategic insights have enabled him to guide numerous early-stage companies to success.
As part of this experience investing in startups, Scott has gained keen i His first tip for early-stage entrepreneurs is to make sure they know their ultimate goal.
“If a founder’s goal is to build a successful company, and make the most money that they can off of that effort, often they get off track. What founders do frequently is make the mistake of raising the wrong money and doing it in the least efficient way,” he says.
Scott often sees founders chase funding from firms to gain the status of the association. This association may take founders off course from their goal of building and growing a successful company.
His second tip is to raise money slowly and sustainably.
“People often equate valuation with a statement of how successful their business is. That’s a mistake. What they should be doing is raising little bits of money really quickly rather than large amounts of money at high valuations,” says Scott. “And I’ve been doing this long enough to know just because something went to 20x doesn’t mean it’s not going to be zero in the end.”
Scott believes that defining an entrepreneur’s ultimate goal is the first step. From there, it’s essential to build and follow a pathway that will lead founders to achieve their dreams.
To learn more about how to startup growth, see if you qualify for membership to join Founders Network.