Anatomy of a VC Deal: How One Seattle Startup Raised $12.5 Million

By Michelle Goodman

Kristen Hamilton knew she needed to raise capital to get her Seattle-based startup off the ground. She and co-founder Josh Jarrett spent half of 2013 developing Koru, an immersive business program that gives recent college grads real-world job skills and positions them for rewarding entry-level work.

That fall, the pair enlisted a handful of Whitman College graduates to participate in a weeklong pilot program at REI’s corporate offices. The goal: develop a presentation for senior REI executives detailing how the retailer of outdoor gear and clothing could appeal to young consumers.

The week was a success. Besides nailing the presentation, the budding professionals gained tangible workplace experience and newfound confidence.

“The intention is to obliterate the statistic that 53 percent of college grads are underemployed or unemployed,” says Hamilton, Koru’s CEO. “We’re fixing a problem for employers, too, because it turns out that employers struggle to figure out who the right hires are when people don’t have a lot of experience.”

To develop Koru’s employer-embedded training programs, Hamilton and Jarrett closed $4.5 million in seed financing at the end of 2013, followed by an $8 million Series A round early this year. Hamilton was no stranger to fundraising, having co-founded online small-business retailer Onvia in 1997, where she raised more than $200 million in investment capital. Koru’s fundraising efforts were highly calculated, from timing and pitch strategy to investors courted and sums sought.

“Fundraising is really an art and a science,” Hamilton says. “You have to be thinking, How many rounds? How much runway do I want? What do I need to do to be able to prove the next milestone?”

Here’s how she and Jarrett secured $12.5 million for Koru in 18 months.

The hunt for seed funding

The founders approached a small set of prospective seed investors in September 2013, certain they had a winning idea in a multibillion-dollar market. But conviction gets you only so far. Without any business metrics or revenue under their belt, the pair had to make a convincing case.


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